Competition (Finland): Finnish Competition Authority’s proposal to the Finnish Medicines Agency regarding parallel import drugs

The Finnish Competition Authority (“FCA”) has made a proposal to the Finnish Medicines Agency (“Fimea”) regarding parallel import drugs sold in Finnish pharmacies. The FCA has, based on a complaint submitted to it by parallel importers active in Finland, investigated why only modest amounts of parallel imported products are sold in Finnish pharmacies despite their prices being considerably lower than those drugs which are directly imported. The complainants alleged that the so-called substitution system laid down in the Medicines Act may not be functioning to its full potential.

The aim of the substitution system is to enable price competition between pharmaceutical companies and hence product savings to both consumers and society as a whole. The FCA found that, due to certain procedures applied by pharmacies in Finland, parallel imported drugs are not able to participate fully in the price competition within the meaning set out in the Medicines Act. The Medicine Act requires that pharmacies always offer to customers the option to switch to the least expensive interchangeable version of a particular drug. The FCA’s investigations showed, however, that pharmacies do not always do this.

Accordingly, the FCA has proposed that Fimea creates a system allowing it to monitor the ordering activity of pharmacies so as to enable it to supervise the pharmacies’ orders and deliveries. According to the FCA, the information required for such monitoring is easily obtainable and similar systems are already in use in other EU countries. Moreover, the FCA has proposed to Fimea that the inclusion of parallel imported drugs into the so-called reference price system applicable in Finland should also be reconsidered.

At the moment, parallel imported drugs are only included in the system if the reference price group already includes a so-called generic drug, i.e. a generic version of the original drug manufactured after the patent of the original has expired.

Altering this would mean that the original drug and the parallel imported alternative could form a pair, in which compensation would only be paid from the reference price of the medicinal preparation, and the price difference would be paid by the customer. This, according to the FCA, would act as a further incentive for the consumers to choose the cheapest interchangeable drug. Source: Finnish Competition Authority Press Release 10/04/2012

Roschier, Attorneys Ltd. - Finland