IHS Global Insight Perspective | |
Significance | Norwegian pharmacies recorded a 2.9% year-on-year (y/y) rise in pharmaceutical sales in 2008 to 17.1 billion Norwegian kroner (US$2.5 billion). By volume, the Norwegian ambulatory market grew 4.5% y/y to 2.6-billion defined daily doses. Prescription medicines hold an 88% share of the total ambulatory market. |
Implications | While sales were driven by antineoplastic and immunomodulating agents, the market was depressed by lower pharmaceutical prices, reimbursement delistings and expansion of the country's step-price system and preferred-product scheme. |
Outlook | For 2009, the Norwegian pharmaceutical market is still expected to grow at a lower rate than its Scandinavian counterparts. There is little doubt that the country will take steps to shift even more of the pharmaceutical cost burden onto patients while containing its reimbursement costs through price reviews, generic promotion, reimbursement delistings and expansion of the step-price and preferred-product schemes. |
The Norwegian pharmacy Association has published a detailed analysis of domestic primary care sales of medicines for 2008 while at the same time providing an update of the latest developments in the market, which will affect the year to come (for full report please click here, publication in Norwegian).
Snapshot of the 2008 Norwegian Ambulatory Market
In 2008, Norwegian pharmacies sold 17.1-billion Norwegian kroner (US$2.5-billion) worth of pharmaceuticals, of which 15.1 billion kroner were prescription drugs and 2 billion kroner were over-the-counter (OTC) medicines. By value, leading therapeutic classes were central nervous system (CNS) drugs, antineoplastics and immunosuppressant agents and cardiovascular treatments, which respectively generated turnover of 3.3, 2.9 and 2.1 billion kroner. Growth was driven by sales of antineoplastics and immunosuppressant agents whose sales expanded 11.1 % year-on-year (y/y). By volume, leading therapeutic classes were cardiovascular, CNS and respiratory treatments with 822, 369 and 283 million daily defined doses (DDD) sold respectively.
Norwegian Ambulatory Pharmaceutical Sales, Leading Therapeutic Categories | ||||
Therapeutic Groups (ATC Group) | Sales (mil. kroner) | % Change, Y/Y | Consumption (mil. Defined Daily Doses) | % Change, Y/Y |
Alimentary Tract and Metabolism (A) | 1,883 | 0.7 | 451 | 1.3 |
Blood and Blood-Forming Organs (B) | 895 | 9.5 | 220 | 5.2 |
Cardiovascular System (C) | 2,139 | -3.0 | 822 | 8.0 |
Dermatologicals (D) | 485 | 6.7 | 3 | 7.1 |
Genito-Urinary and Sex Hormones (G) | 915 | 1.9 | 164 | 2.7 |
Hormones excluding Sex Hormones and Insulin (H) | 422 | 6.8 | 73 | 5.0 |
General Anti-Infectives for Systemic Use (J) | 884 | 8.0 | 35 | 3.1 |
Antineoplastics and Immunosuppressant Drugs (L) | 2,864 | 11.1 | 24 | 8.6 |
Musculoskeletal System (M) | 575 | -2.2 | 96 | -0.8 |
Central Nervous System (N) | 3,323 | -1.2 | 369 | 4.6 |
Antiparasitic Agents (P) | 60 | -2.8 | 1 | -1.0 |
Respiratory System (R) | 1,732 | 0.7 | 283 | 1.3 |
Sensory Organs (S) | 407 | 6.8 | 28 | 10.7 |
Various (V) | 175 | 12.1 | 0.3 | 16.4 |
Source: Norwegian Pharmacy Association, 2009 | ||||
In 2008, disease-modifying antirheumatic drugs (DMARDs) featured high on the list of best-selling medicines by turnover with Enbrel (etanercept; Amgen, U.S.) and Remicade (infliximab; Schering-Plough, U.S.) leading the way with respective sales of 502 and 356 million kroner.
Ten Top-Selling Drugs by Turnover, 2008 | |||
Brand (examples) | Active Ingredient | Sales in mil. kroner | % Change Year-on-Year |
Enbrel | etanercept | 502 | 12.2 |
Remicade | infliximab | 356 | 22.4 |
Seretide | salmeterol and fluticasone propionate | 325 | -0.1 |
Paracet, Panodil, Pinex | paracetamol | 249 | 3.1 |
Humira | adalimumab | 241 | 16.7 |
Lipitor | atorvastatin | 235 | -23.3 |
Symbicort | formoterol and budesonide | 223 | 9.2 |
Nexium | esomeprazole | 221 | -10.4 |
Zocor | simvastatin | 211 | 16.0 |
Cypralex | escitalopram | 176 | 7.1 |
Source: Norwegian Pharmacy Association, 2009 | |||
Price Erosion
In 2008, pharmaceutical prices of ambulatory medicines fell by an average of 1.6% when measured in kroner by daily defined doses. Prescription drugs with generic competition saw their price drop by a staggering 22.8% y/y, a tribute to the downward pressure put on prices of pharmaceuticals included in the country's step-price system (see Norway: 25 November 2008: Norwegian Pharmacy Association Provides Price-Erosion Snapshot on Best-Selling Medicines).
Pharmaceutical Price Evolution in Norwegian Primary Care Market, 2008 | |
Price Evolution Measured as Percent of kroner/DDD | |
All Ambulatory Pharmaceuticals | -1.6 |
Prescription Drugs | -3.1 |
Prescription Drugs without Generic Competition (10 best selling) | +2.0 |
Prescription Drugs with Generic Competition (10 best selling) | -22.8 |
OTC | 8.1 |
Source: Norwegian Pharmacy Association, 2009 | |
Further Cost-Containment Measures
Cost-containment remains high on the political agenda as Norway has implemented the following measures:
- Expansion of the step-price system from 45 to 47 generic active ingredients. Newly added drugs are cholesterol-lowering drug Lipitor (atorvastatin; Pfizer, U.S.) and anti-psychotic Zyprexa (olanzapine; Elli Lilly, U.S.);
- Sumatriptan designated as the preferred medicine in the treatment of migraine, effective from 1 September 2008. Under this system sumatriptan becomes the first-choice for reimbursement unless there are medical grounds to prescribe a different medicine;
- Reimbursement delisting for antihistaminic drugs Ebastel (ebastine) and Clarinex (desloratadine) effective from 1 December 2008;
- Reduction in pharmacy margins from 8 to 7% for medicines costing less than 200 kroner and from 5 to 4% for medicines priced over the 200 kroner threshold. In the meantime pharmacist remuneration was increased from 21.5 to 22 kroner per dispensed pack of medicine.
Outlook and Implications
For 2009, the growth rate of the Norwegian pharmaceutical market is expected to remain contained as Norway has implemented a fresh raft of measures to curb expenditure. Notable trends in the market are the use of newer and more expensive medicines in the hospital sector as opposed to the use of cheaper generic medicines in the primary care sector, as illustrated by an ambulatory market that grows faster by volume than by value. Furthermore, Norway is shifting more of the pharmaceutical cost burden onto patients. Indeed, in 2008, per capita spend grew by 2% y/y to 3,613 kroner, while the associated public share dropped by 2% y/y to 1,630 kroner.
The growth rate of the Norwegian pharmaceutical market is low by Scandinavian standards, reflecting stringent cost-containment measures. Prices of prescription medicines, whether patented or generic, are likely to keep falling on the back of the country's pricing reviews. Indeed, for prescription medicines, the Norwegian Medicines Agency sets a maximum pharmacy purchasing price calculated as the average of the three lowest prices in reference countries, ensuring that Norwegian pharmaceutical prices always are amongst the cheapest in Europe (see Norway: 11 June 2008: Norwegians Enjoy Cheapest Medicine Prices in Western Europe). Annual price reviews of the 300 most-prescribed medicines are carried out to ensure that the country's maximum pharmacy purchasing price reflects any price change in the reference countries. With regard to generic medicines, Norway implements a stepped-price system under which the price of a pharmaceutical is reduced step by step by preset rates once it has lost patent protection and is subjected to generic competition.
For the year to come, Norway can be expected to further expand its step-price system. With a number of blockbusters due to lose patent protection in the near future, the scheme will swell as soon as stable generic competition is introduced to the market. In the short-term, the market will be depressed by a fresh round of price cuts on atorvastatin due to happen on 15 May 2009 when the reimbursement price of the active ingredient will be set at 25% of the originator drug maximum price at the time of generic entry. Furthermore, the country is likely to experience further reimbursement delistings and expansion of the preferred-product scheme.