Skip to main content
Key Specialties
Cardiology Diabetology Endocrinology Gastroenterology Geriatrics and Gerontology Gynecology and Obstetrics Hematology Infectious Disease Internal Medicine Nephrology Neurology Oncology Pediatrics Respiratory Medicine Rheumatology Surgery
Congress Coverage
2024 ACC Congress 2023 ESMO Congress 2023 EASD Congress 2023 ERS Congress 2023 ESC Congress
Clinical Collections
Advances in Alzheimer’s

At a glance: The STEP trials

A round-up of the STEP phase 3 clinical trials evaluating semaglutide for weight loss in people with overweight or obesity.
ADVANCED SEARCH
Log in
Top
The European Journal of Health Economics
Published in: The European Journal of Health Economics 2/2008

01-05-2008 | Original paper

The impact of generic substitution on price competition in Finland

Author: Ville Aalto-Setälä

Published in: The European Journal of Health Economics | Issue 2/2008

Login to get access

Abstract

Generic substitution by pharmacists was introduced in April 2003 in Finnish pharmaceutical markets. This article examines the impact of generic substitution on price development. This study examined all of the 2,100 substitutable drugs in Finland. The impact of generic substitution on price competition was significant. The average price of substitutable drugs decreased by more than 10%. However, the price development was uneven; some prices increased whereas others decreased by more than 50%. The most important factors that influenced the price development were the number of competitors, whether the drug was originator or generic and the width of the price band.
Footnotes
1
Typically, substitutable drugs are sold only with prescription. However, it is possible to buy some drugs, for example, quite mild dosages of some active ingredients like ibuprofen and ranitidine, without prescription.
 
Literature
1.
Aronsson, T., Bergman, M.A., Rudholm, N.: The impact of generic drug competition on brand name market shares—evidence from micro data. Rev. Ind. Organ. 19(4), 425–435 (2001)CrossRef
2.
Berndt, E.R.: The U.S. pharmaceutical industry: why major growth in times of cost containment? Health Aff. 20(2), 100–114 (2001)CrossRef
3.
Boersma, C., Klok, R.M., Bos, J.M., Naunton, M., van den Berg, P.B., de Jong-van den Berg, L.T.W., Postma, M.J.: Drug costs developments after patent expiry of Enalapril, Fluoxetine and Ranitidine: a study conducted for the Netherlands. Appl. Health Econ. Health Policy 4(3), 191–196 (2005)CrossRef
4.
Congressional Budget Office. How increased competition from generic drugs has affected prices and returns in the pharmaceutical industry. US Government Printing Office, Washington (DC) (1998)
5.
Dalen, D.M., Strom, S., Haabeth, T.: Price regulation and generic competition in the pharmaceutical market. Eur. J. Health Econ. 7(3), 208–214 (2006)CrossRef
6.
de Joncheere, K., Rietveld, A.H., Huttin, C.: Experience with generics. Int. J. Risk Saf. Med. 15, 101–109 (2002)
7.
Ellison, S.F., Cockburn, I., Grilliches, Z., Hausman, J.: Characteristics of demand for pharmaceutical products: an examination of four cephalosporins. RAND J. Econ. 28(3), 426–446 (1997)CrossRef
8.
Ess, S.M., Schneeweiss, S., Szucs, T.D.: European healthcare policies for controlling drug expenditure. Pharmacoeconomics 21(2), 89–103 (2003)CrossRef
9.
Frank, R.G., Salkever, D.S.: Generic entry and the pricing of pharmaceuticals. J. Econ. Manage. Strategy 6(1), 75–90 (1997)CrossRef
10.
Garattini, L., Ghislandi, S.: Off-patent drugs in Italy. A short-sighted view?. Eur. J. Health Econ. 7(1), 79–83 (2006)CrossRef
11.
Lexchin, J.: The effect of generic competition on the price of brand-name drugs. Health Policy 68(1), 47–54 (2004)CrossRef
12.
Paldan, M., Martikainen, J.: Lääkevaihdon ensimmäinen vuosi tilastoina. In: Riitta, A., Jaana, M. (eds.) Lääkevaihdon ensimmäinen vuosi. Social Insurance Institution, Finland (2005)
13.
Poutiainen, T., Aalto-Setälä, V.: Demand for substitutable drugs. University of Helsinki, Mimeo (2006)
14.
Simoens, S., De Bruyn, K., Bogaert, M., Laekeman, G.: Pharmaceutical policy regarding generic drugs in Belgium. Pharmacoeconomics 23(8), 755–766 (2005)CrossRef
15.
Werkö, L.: The rapidly increasing cost of medicines threatens the core of healthcare. Scand. Cardiovasc. J. 38(3), 130–131 (2004)CrossRef
Metadata
Title
The impact of generic substitution on price competition in Finland
Author
Ville Aalto-Setälä
Publication date
01-05-2008
Publisher
Springer-Verlag
Published in
The European Journal of Health Economics / Issue 2/2008
Print ISSN: 1618-7598
Electronic ISSN: 1618-7601
DOI
https://doi.org/10.1007/s10198-007-0059-0

Other articles of this Issue 2/2008

The European Journal of Health Economics 2/2008 Go to the issue

Editorial

The CHESME Health Economic Evaluations Database (CHESME HEED) project

Original paper

Cost utility analysis of early adjuvant letrozole or anastrozole versus tamoxifen in postmenopausal women with early invasive breast cancer: the UK perspective

Erratum

Pharmacoeconomic evaluation of immunoglobulin treatment in patients with antibody deficiencies from the perspective of the German statutory health insurance

Original paper

Costing maternal health services in South Tanzania

Original paper

Economic evaluation of the treatment of type 2 diabetes with insulin glargine based on the LAPTOP trial

Original paper

Eligibility for free GP care, “need” and GP visiting in Ireland