After several mergers and takeovers, Finland has only one major domestic pharmaceutical company, Orion Ltd, with the main part of its 2018 market share (10%) covered by generic products. The second largest seller is Merck Sharp & Dohme, with a market share of 7%. Due to the existence few production facilities in Finland, the great majority of pharmaceuticals are imported. Because of this, pharmaceuticals companies, importers, health care units and THL are legally obliged to maintain relatively large crisis preparedness stocks (mandatory reserve supplies).
In Finland, mainly two wholesalers provide nearly all pharmaceuticals to the community and hospital pharmacies. The pharmaceutical manufacturer makes a sole-distribution contract with the wholesaler and the products are available only through that wholesaler (a so-called one-channel system). Certain products may be delivered through an alternative route directly from the manufacturer to hospital pharmacies, mainly for inpatient care. Fimea publishes information on specific medicine shortages.
Community pharmacies are privately owned by pharmacists. There were 616 privately owned pharmacies in Finland in 2017, and a further 196 subsidiary pharmacies run by pharmacists in addition to their main pharmacy (Association of Finnish Pharmacies, 2019). Fimea grants permissions to run subsidiary pharmacies in areas where it is not economically viable to run an independent pharmacy. In rural areas, where even a subsidiary pharmacy is not economically viable, Fimea can give permission to a pharmacist having a pharmacy in the same region to run a service point for OTC and pre-ordered prescription medicines.
In addition to this, the University of Helsinki and the University of Eastern Finland have their own outpatient pharmacies (18 in total). Hospitals and health centres also have their own pharmacies and medicine dispensaries, but they can dispense medicines only to their own wards and departments. On special occasions, a patient who is discharged may be issued medicines from the hospital to ensure the continuation of the medication.
Electronic prescription has been in use in Finland since 2013. In 2017, e-prescription became the only method of prescribing except in case of technical failure and emergency cases. Prescriptions are usually valid for two years except in cases when the physician has restricted it for shorter period.
In outpatient care, physicians do not have any financial incentives, such as holding a budget to assess costs, and Kela as a payer has limited options to directly influence physicians. However, in principle, according to the legislation, the physicians are obliged to take account of cost-efficiency in prescribing. Prescription patterns have also been somewhat regulated by limiting reimbursement for defined patient groups. In inpatient care, the physicians need to assess costs more closely as expenditure is included in the departmental budget in hospitals. Pharmaceutical expenses have been a target of state budget cuts for a long time. Several measures have been attempted, such as reimbursement rates, and introducing deductibles and different measures to increase price competition.
The most recent measures have come into effect in 2017. These include restricting the dispensing of expensive drugs for a period of up to one month at a time, issuing a new batch of regular medication only after the previous batch has almost been consumed, and lowering the reimbursement for type 2 diabetes medicines from 100% to 65%.
The total sales of pharmaceuticals was €3.1 billion in 2017, amounting to €558 per person. Outpatient prescription medicines accounted for 68% of this, OTC drugs for 11% and hospital sales for 20% (Fimea & Kela, 2018).
Box5.7 discusses the key issues with regard to waste in pharmaceutical spending.
Box5.7