Generic substitution and the reference price system

Generic substitution is complemented by the reference price system, which was introduced on 1 April 2009. The selection of substitutable medicines was expanded at the same time. The reference price represents the maximum price used by Kela as a basis for calculating the reimbursements paid for covered medicines. Clients who decline generic substitution must pay out of pocket the part of the price exceeding the reference price. If the doctor rules out generic substitution, or if no reference priced medicine is available, the reimbursement is calculated off the full price of the medicine.

Under the reference price system, products which contain the same active ingredient, are bioequivalent and are sold in similar-size packages, belong to the same reference price group. The reference price groups are based on the list of substitutable medicinal products compiled by the National Agency for Medicines (Fimea). The reference price for the group is calculated by adding EUR 0.50 to the price of the least expensive product within the group. The Pharmaceuticals Pricing Board sets the reference prices on a quarterly basis.

Generic substitution and the reference price system produce savings through the substitution process and by encouraging price competition among pharmaceutical companies. The savings figures shown on Kela’s website reflect the amount of savings achieved through generic substitution. The figures have been calculated in the same way as earlier figures on savings related to generic substitution; i.e., by comparing the cost of the prescribed medication to that of the dispensed medication. 

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