Norwegian pharma industry calls for tendering and IRP reforms

The pharmaceutical sector in Norway has responded to recent criticism levelled at the industry by healthcare authorities related to increases in medicine shortages in the country. The industry's position has generally held that the small size of the pharmaceutical market, combined with the low drug prices that manufacturers can obtain, is chiefly responsible for recent spikes in shortages of certain medicines.

Norway operates a number of pricing and reimbursement (P&R) mechanisms to ensure that the country maintains low drug prices in relation to comparable Western European countries. This is having an increasing effect in terms of rendering Norway a less attractive market for suppliers. Norway's Pharmaceutical Industry Association LMI also warns that there is a risk that the country will be further de-prioritized in the event that supply shortages occur elsewhere in the European region.

The industry association called for changes to be made to tendering arrangements for "H-prescription" (outpatient prescriptions reimbursed by regional health authorities). At present, H-prescription tenders mean that only one supplier is selected for the duration of the tender period. This can mean that no alternative supplier is available in the event that delivery problems arise. To overcome this, the LMI proposes that two suppliers should be selected for tendering contracts. This would mean the lowest and second-lowest tendering offers will be selected to supply the market.

Also, the LMI proposes changes to how Norway uses international reference pricing (IRP). As such, the LMI suggests that Norway should no longer reference the lowest price in three of the nine reference countries in Europe that it uses. Rather, the LMI suggests that Norway should reference the average price in all nine IRP markets.

The proposals that have been brought forwards by the LMI would result in slightly higher prices in Norway, but this would be offset by increased security of supply. Policy-makers will consider the policy measures, although realistically, it is highly unlikely that the changes will be implemented in full or anything other than a long-term timescale.

Posted 05 October 2018 by Eoin Ryan, Senior Analyst