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 free to set their own prices every two weeks if they notify the Danish Health and Medicines Agency of the pharmacy purchasing price (PPP). Regarding the hospital sector, pharma companies are required to negotiate prices and provide evidence of their drug’s cost-effectiveness.
Denmark’s Payer Stakeholders
Denmark has two primary payer stakeholders: the patient and the State (via the regional health authorities’ budgets and the national health service). 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.
Based on the Danish Medicines Agency’s priorities, a so-called ‘Basic List’ is made. The Basic List shows the five Danish regions’ local recommendations for first choice of medicines in the primary sector. The Basic List has been prepared in a collaboration between the regions. However, the choice of medicines is made exclusively by the individual region.
Amgros and the Danish Medicines Council
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, centralizes hospital drug purchasing for all the hospitals in Denmark.
The Danish Medicines Council prioritizes existing medicines and adopts new medicines and new indications for standard treatment. It makes recommendations about hospital pharmaceuticals to the Danish Regions to standardize the use of high-cost drugs among the regions and to increase price negotiating power.
The assessment of a drug includes 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 work directly with the Danish Medicines Council. Furthermore, price negotiations are a direct part of the process.
- A patient is responsible for a co-pay for prescription drugs in the primary sector, which gradually decreases as he or she accumulates pharmaceutical expenses during a 12-month period. Once patient expenses reach 3880 DKK (approx. $620 USD or 520 Euro), the entire cost of prescription drugs is paid for by the State.
The Regional Basic Lists often differ from region to region. This gives the regions possibility to further prioritize choice of medicines in the primary sector.
Implications for Industry
Pharma companies launching hospital sector drugs are required to demonstrate the cost effectiveness of their medicines towards the Danish Medicines Council. The committee has the final say on medicines to be adopted as standard treatment, regardless of pricing. They have a broad 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 help in achieving access and reimbursement success.
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