Suppliers of Parallel Imported Medicines in Finland

In parallel import, original pharmaceutical products are purchased from an EU/EEA country with lower prices, repackaged with information in Finnish and Swedish and imported to Finland. Parallel imported product has the same trade name and manufacturer as the directly imported product. Only the importer, package and price for the patient are different.

What is parallel import of medicinal products?

Parallel import of medicinal products is based on differential pricing within the EEA. In the EU, the principle of free movement of goods allows for parallel import of medicines. Parallel import is regulated in the same manner as all pharmaceutical sales. The developer of the pharmaceutical product, i.e. the original manufacturer, always receives compensation from pharmaceuticals sold to parallel importers.

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The parallel importer must apply for a marketing authorization for parallel import from the Finnish Medicines Agency (Fimea). When processing the marketing authorization application, Fimea ensures that the parallel imported product and the directly imported product are sufficiently similar so that they may be regarded as the same medicinal product and do not have any difference in the therapeutic effect.

To the customer, the only differences between the directly imported and parallel imported product are the price and the package of the product. The re-packager and the parallel importer must be clearly mentioned on the outer packaging of the parallel imported product.

The package and patient information leaflet of parallel imported medicines are approved by relevant authorities.

In Finland, parallel importers utilize the same distribution channels as the direct importers, i.e. the two largest pharmaceutical wholesalers of Finland. Parallel importers have the same responsibility to maintain mandatory reserve supplies as other operators in the pharmaceutical industry.

Healthy competition creates savings

Parallel imported medicines enable the use of original pharmaceuticals with lower prices. Parallel importers bring competition to the pharmaceutical industry and are the only competitive option available while the patent of the original product is valid. With reductions in pharmaceutical prices driven by parallel import and increased competition, more public resources will be available for health care and preventive care.

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Parallel import increases freedom of choice.  It also provides pharmacies, wholesalers and especially patients with the possibility to select the products with lowest price on the market. Without parallel import, taxpayers would be burdened with a larger share of the national healthcare scheme. Also, in many cases patients would be paying considerably more for their prescription medicines.

How much can be saved?

According to the estimates of the Finnish Association of Parallel Importers, parallel imported medicines can save millions each year. Direct savings come from price differences, when pharmacies provide a cheaper product, and indirect savings come from price competition brought about by parallel imports, as the prices of competing products decrease. This price competition brings about the biggest savings to the society and patients. Parallel imported medicines were included in the medicine substitution system on the 1st of April 2017, and after that the number of parallel imported products has increased significantly and price competition escalated. However, price competition does not yet work as efficiently as possible, and the market share of parallel imports has not grown meaningfully in Finland.

Finnish hospitals have been active for years in utilizing savings brought about by parallel imported medicines. Parallel imported medicines also have a more extensive effect on pharmaceutical expenses in hospitals. Including parallel importers in public tendering of the hospital districts lowers prices of the pharmaceuticals due to price competition.

In 2017, the share of parallel imported products of total pharmaceutical costs in hospitals was 5.7%. In pharmacies, the share of parallel imported products was only 1.5%. In pharmacies, this share has grown from 2014 by only one percentage point, whereas in hospitals, the share has grown steadily during the same period.

In Finland, the share of parallel imported products of all pharmaceutical sales is considerably smaller than in many other European countries: in Finland, this share was only 2.5% in 2017. In Denmark, for example, the share of parallel importers in pharmacies is 26% and in hospitals 8%. In Sweden, the corresponding figures are 14% and 5%. In Germany, the share of parallel importers of the whole pharmaceuticals market is about 8.5%.

National health insurance systems save hundreds of millions of euros every year in countries where parallel import works and price competition is possible. In these countries, parallel import has been permitted by various rules and regulations set by relevant national authorities. In Denmark, with a population of comparable size to Finland, parallel import generated savings of €53 million in 2011. In Germany, the direct savings generated by parallel import are estimated at € 300 million each year*.

Market shares: Reveal, Pharmarket, DLI-MI and Market Research Insight Health.

*Source: VAD (Verband der Arzneimittel-Importeure Deutschlands eV)

Q&A

What is an original pharmaceutical product?

A pharmaceutical product first brought to the market by the developer of the active pharmaceutical ingredient or by a party it has granted manufacturing rights.

What are generic pharmaceutical products?

A generic product can be brought to the market once the exclusive intellectual property rights of the original pharmaceutical product expire. Generic product has the same active pharmaceutical ingredient, dosage form, strength, quality and performance characteristics as the original pharmaceutical product. The quality, safety and effectiveness have been proven in clinical trials.

How do parallel imported medicines differ from generic products?

Parallel imported medicines are original products purchased from another EU/EEA country with lower prices, and then repackaged and imported to Finland. Unlike generic products, parallel imported products are the same as the original product with the same manufacturer and the same trade name. The only difference is the more affordable price, the importer and the package.

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What are interchangeable medicinal products and what is the medicine substitution system?

The Finnish Medicines Agency Fimea compiles a list of substitutable medicinal products and maintains it. Pharmaceuticals that contain the same quantity of the same active agent and are biologically equivalent are considered interchangeable. This list includes original products and parallel products (generic products) with marketing authorisation, parallel imports or parallel distribution products. Not all parallel products (generic products) are within the scope of the medicine substitution system (e.g. medicines for epilepsy and arrhythmia), but parallel imports and parallel distribution products are always interchangeable regardless their pharmaceutical form or ATC classification. In the medicine substitution system, the pharmacy substitutes the medicine prescribed by a doctor or dentist to the most affordable interchangeable medicine or one close to it in price.

 

What is the reference price system?

The reference price group of medicinal products is composed of reimbursable, interchangeable medicines that have marketing authorisation, provided the reference price group to be formed includes at least one parallel product, parallel imported product or parallel distribution product available commercially. In the reference price system, the pharmacy substitutes the medicine prescribed to the patient to the most affordable interchangeable product or to one that is no more than 0.5 € more expensive than the cheapest option. In the reference price system, reimbursement is paid according to the most affordable product or an interchangeable product with a minor price difference (+0.5 € = the reference price) to the cheapest one.

If the patient chooses to purchase a product that is more expensive than the reference price, the patient pays the difference between the reference price and the medicine’s price. If the doctor has forbidden changing the medicine, the reimbursement is calculated on the basis of the prescribed medicine. In the reference price system, the patient often chooses the more affordable option as it directly affects the medicinal costs of the patient.

Can anyone become a parallel importer and sell pharmaceutical products?

No, they cannot. Every pharmaceutical company, including parallel importers, must commit to all legislations and regulations which ensure that product documentation, production facilities, distribution and environmental concerns meet the high quality standards. A wholesale distribution license is also a mandatory requirement.

What enables parallel import?

Articles 28-30 of the EC Treaty determine the principle of free movement of goods, which enabled parallel import in the Nordic countries when they joined the EU/EEA. These articles prohibit artificial barriers for free movement of goods within the EU, as it is supposed to function as an integrated market just like individual countries.

 

Why do prices of pharmaceutical products vary between European countries?

Pharmaceutical companies are entitled to set different prices for their products in different markets. Governments attempt to control the prices of pharmaceutical products and this causes price differences between countries. In addition, the social security systems of countries differ, and each country evaluates pharmaceutical products differently, which also affects the prices of pharmaceutical products. Currency exchange rate fluctuations may also have an impact on the prices in different countries.

 

What are the benefits of parallel pharmaceutical imports?

The patient and the society benefit from parallel import. By bringing competition to the pharmaceutical market, parallel importers have been able to lower price level of pharmaceutical products, thus bringing direct and indirect savings to the patients and national health care. Without parallel import, many pharmaceutical products would be considerably more expensive.

 

How do parallel imported medicines differ from directly imported medicines?

Parallel imported medicines are the same products as the directly imported medicines. The only difference is that the parallel imported medicines have been manufactured for the use of another European country, and thus there may be differences in the name or the labelling compared to the directly imported product sold in Finland.

The process for the marketing authorization for parallel import ensures that the products are sufficiently similar. Parallel import is covered by the same legislation and regulations as other pharmaceutical products, ensuring that they are as safe and reliable as all other pharmaceutical products.

Member companies

orifarm

Orifarm Group is a progressive European player in the health care industry. The company has two business areas, parallel imported pharmaceuticals and generic products.

All Orifarm action is marked by an entrepreneurial outlook that is now called explorer spirit. The results speak for themselves: Orifarm Group is the largest supplier of parallel imported pharmaceuticals in Europe and has a strong presence on the Nordic generic markets. Orifarm has become an international company and operates in Denmark, Sweden, Norway, Finland, Germany and the Czech Republic.

ORIFARM OY

paranova_logo

Paranova and its partner MPA Pharma are one of Europe’s leading companies in parallel imports, offering Scandinavia’s pharmacies a far broader product range, better delivery capabilities and additional services. Paranova is a market pioneer, the first to bring parallel imported pharmaceuticals onto the Scandinavian markets at the close of the year 1990.

Paranova parallel imports pharmaceuticals to Finland, Denmark and Sweden, with sales subsidiaries in all countries. Paranova has played an important role in advancing competition in the pharmaceuticals market, and providing the best possible care cost efficiently to patients.

PARANOVA OY