Pharmaceutical products in Denmark are distributed through two channels – the hospital sector and the primary health sector – with varying reimbursement and access approaches for each. In general, reimbursement is granted for drugs that can prove a superior cost-benefit ratio compared to standard treatment, are used for a well-defined indication and do not put undue pressure on the government’s pharmaceutical budgets. For the primary sector, companies are currently free to set their own prices as long as they notify the Danish Health and Medicines Agency of the pharmacy purchasing price (PPP). On the contrary, a new evaluation model for hospital medicines to be implemented in 2017 will require pharma companies to negotiate prices and provide greater evidence of their drug’s cost-effectiveness. At the same time, the new government entity, Medicinrådet, is expected to be more transparent and include a wider range of stakeholders in the decision-making process.
Denmark’s Payer Stakeholders
Denmark has two primary payer stakeholders: the patient and the State (via the regional health authorities’ budgets). A medicine prescribed by a general practitioner in the primary sector is partially reimbursed by the region, provided it has been granted such status.
THE DANISH MEDICINES AGENCY
In addition to being responsible for legislation concerning pharmaceuticals, medical devices and clinical trials, the Danish Medicines Agency decides which primary sector medicines are to be reimbursed by the State. It is advised by the Reimbursement Committee, comprised of two general practitioner physicians, four specialist physicians and a representative each from the Danish Regions and patients/consumers.
The Reimbursement Committee reviews a new medicine’s therapeutic effect, value added and side effects when considering it for reimbursement. The group considers a drug’s price and any economic implications, but Denmark’s health economic evaluation is far less strict than Sweden’s, for example.
RADS AND KRIS
Medicines used in the hospital sector are fully funded through each region’s hospital budgets. Amgros, a pharmaceutical procurement service owned by the Danish Regions, centralises hospital drug purchasing for all of the hospitals in Denmark.
The Danish Council for the Use of Expensive Hospital Medicine (RADS) makes recommendations about hospital pharmaceuticals to the Danish Regions to standardise the use of high-cost drugs among the regions and to increase price negotiating power. The Coordination Council for Placing in Service of Hospital Medicine (KRIS) plays a similar role, specifically regarding oncology drugs. Medicines used in the hospital sector are fully funded through the each region’s hospital budgets.
In 2017, RADS and KRIS will be replaced by Medicinrådet, becoming the Danish Regions’ new model for prioritising existing medicines and adopting new medicines for standard treatments.
The assessment of a drug will include three major milestones:
- Clinical assessment focusing on the added value of the drug compared with current treatments, in terms of life extension, side effects and health-related quality of life
- Health economic assessment (handled by Amgros)
- Price negotiation with the pharmaceutical company (handled by Amgros)
Important Points to Keep in Mind
Pharmaceutical companies seeking access and reimbursement will work directly with Medicinrådet, which is currently not the case with KRIS and RADS. Furthermore, price negotiations will be a direct part of the process.
- The Danish Ministry of Health has announced that the Reimbursement Committee must undergo a service inspection, to ensure the system benefits citizens, pharmaceutical companies and the economy. The Service Inspection is expected to take place in the late 2016.
- A patient is responsible for a co-pay for prescription drugs, which gradually decreases as he or she accumulates pharmaceutical expenses during a 12-month period. Once patient expenses reach 3880 DKK, the entire cost of prescription drugs is paid for by the State.
Implications for Industry
With Medicinrådet in place, pharma companies with hospital sector drugs will be required to demonstrate the cost effectiveness of their medicines. The committee will have the final say on medicines to be adopted as standard treatment, regardless of pricing. Medicinrådet will have a broader representation of stakeholders, with members from Danish health agencies, medical directors from the Danish Regions, patient representatives and a member from the Danish Association for the Pharmaceutical Industry. Considering these factors, having experts on the ground who are familiar with the intricacies of the evolving Danish environment will help in achieving access and reimbursement success.
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