The Finnish Competition and Consumer Authority (FCCA) has listed reform proposals to improve the availability of medicines and reduce costs for consumers, in a study of the pharmacy market published on Wednesday.
Pharmacy regulations in Finland should be developed in a more consumer- and market-friendly direction, FCCA said its extensive report.
"It would be in the interest of taxpayers and people buying medicines that the system be more efficient," FCCA's head of research Tuulia Hakola-Uusitalo said**.**
Hakola-Uusitalo however emphasised that pharmacies in Finland perform well and should not be accused of contributing to the inefficiency of existing structures.
Lower drug prices through tax reforms
According to the study, there are many factors that have led to a need for reform.
Pharmacists’ revenues have repeatedly been found to be relatively high, which is reflected in the cost of medicines. The FCCA proposed that a simple way to address these large profits and lower pharmacies' margins would be to reduce the retail prices on medicines by changing the medical tariff or otherwise by applying pharmaceutical taxes to other products.
These changes could directly affect the profitability of pharmacy operations and subsequently, costs borne by consumers and the health insurance system.
"These are necessary reforms if medicines are to be sold at a lower price," Hakola-Uusitalo said.
Increase competitive pricing
Medicine costs could be reduced by encouraging competitive pricing, according to the FCCA.
This could be done by setting a price cap for over-the-counter (OTC) medicines instead of assigning a fixed price. Pharmacies could then compete with each other by lowering their own margins.
In addition, the Authority proposed the liberalisation of OTC medicine sales — that would involve allowing such products to be sold outside pharmacies.
"If our goal is to get medicines for people cheaper and more efficiently, then competitive pressure is necessary," Hakola-Uusitalo stated.
OTC drug sales have been liberalised outside pharmacies, for example in Sweden, where sales have shifted to e-commerce in particular. The prices of the products there are considerably lower in outlets outside pharmacies.
"It shows that competition between pharmacies is not enough to reduce the prices of OTC medicines. The competition must also come from sales outside pharmacies -- online sales and other sales outlets," Hakola-Uusitalo said.
However, in an interview with regional news group Uutissuomalainen in October, Minister of Social Affairs and Health Aino-Kaisa Pekonen (Left) stated that the sale of OTC drugs is not being liberalised.
The FCCA also suggested reforming the pharmacy licensing process and relaxing other strict regulations around ownership, location and volume to make opening of pharmacies easier and the market more efficient.