Determination of price bands

Under the Medicines Act, the pharmacy must substitute a prescribed medicine for the generally available substitutable product that is the cheapest or whose price difference to the cheapest product is at the most EUR 0.50.

Kela compiles a list of the prices for substitutable products 4 times a year. Kela groups the products on the list so that products containing the same active substance at the same strength and of the same package size are included in the same group. Kela also calculates a price limit for each group, which means that products whose price exceeds the price limit must be substituted for cheaper substitutable products. Kela forwards these data to the pharmacies for the implementation of generic substitution.

Grouping medicinal products

Fimea compiles and updates a list of substitutable medicinal products (fimea.fi). Medicinal products containing the same active substance at the same strength have the same 4-digit code on the list (number of the substitution group). This division into groups is the basis for a more detailed package-specific determination of substitutability.

Kela and the Pharmaceuticals Pricing Board (Hila) further group the substitutable products so that packages of the same size have the same 10-digit code (substitution group code). The code is used both in generic substitution and in the reference price system.

Certain packages of tablets and capsules are substitutable even though the package sizes differ slightly. These include

  • the package sizes 28, 29 and 30, which share the last four digits 0030
  • the package sizes 49 and 50, which share the last four digits 0050
  • the package sizes 98, 99 and 100, which share the last four digits 0100.

Retail prices

The pharmaceutical companies notify the wholesale prices for products subject to the price notification procedure to Kela. Kela converts the wholesale prices to retail prices that include VAT. Calculation formula, see Government decree on the price determination of drugs (in Finnish) (finlex.fi).

Price bands

Kela picks the retail price including VAT for the cheapest product in each group of substitutable packages and adds EUR 0.50 to this price. This price range from the cheapest price to a price that is EUR 0.50 higher is the so-called price band. In practice Kela calculates the upper limit of the price band, and products that are more expensive than this must be substituted for cheaper substitutable products at the pharmacy.

If the group of substitutable packages includes at least one reimbursable generic, parallel import or parallel distribution product, the products are included in both generic substitution and the reference price system. In this case, the upper limit is calculated by adding EUR 0.50 to the retail price of the cheapest reimbursable product in the group.

The availability of the medicine affects the determination of the price band

The price notification must indicate whether the product is generally available. The product is generally available when it is available from the wholesalers at the time of notification and throughout the following quarter.

When determining the price bands, only the products that are generally available are taken into account. It is important that the information in the price notification regarding the availability of the product is correct so that the cheapest price of the group of substitutable packages and the price band calculated on the basis of this lowest price are based on actual data on availability.

If none of the products in the group of substitutable packages is available, Kela determines so-called technical price bands for the group. In that way it is possible to make sure that the pharmacy can substitute the medicines during the time they are available. The technical price bands are determined on the basis of the cheapest price in the group using the same formula as for actual price bands.

Just the price band is determined when none of the medicines is a reimbursable generic, parallel import or parallel distribution product

Substitutable packages Price (EUR) Upper limit (EUR)
Product A, 10 mg, tabl 100 1.00 2.50
Product B, 10 mg, tabl 98 2.00 2.50
Product C, 10 mg, tabl 98 2.10 2.50
Product D, 10 mg, tabl 100 2.50 2.50
Product E, 10 mg, tabl 100 3.00 2.50
  • The pharmaceutical company has reported that product A is not generally available. In such case, the price band is determined by the cheapest available product, product B.
    • Kela determines the upper limit of the price band on the basis of the price of product B as follows: EUR 2.00 + 0.50 = 2.50.
  • The price band includes products B, C and D, with a price range of EUR 2.00–2.50 (printed in bold in the table).
  • If the customer has been prescribed product E, the pharmacy must substitute it for a product that is included in the price band. The client can forbid the substitution.
  • If the medicine that the customer buys is included in the reimbursement system, he or she will still get reimbursement on the full price of the medicine.

The price band and the reference price are determined when at least one of the medicines is a reimbursable generic, parallel import or parallel distribution product

Substitutable packages (reference price group) Price (EUR) Upper limit (EUR) Reference price (EUR)
Product A, 10 mg, tabl 100, non-reimbursable generic product 1.00 2.50  
Product B, 10 mg, tabl 98, reimbursable generic product 2.00 2.50 2.50
Product C, 10 mg, tabl 98, reimbursable generic product 2.10 2.50 2.50
Product D, 10 mg, tabl 100, reimbursable parallel import product 2.50 2.50 2.50
Product E, 10 mg, tabl 100, reimbursable original reference medicine 3.00 2.50 2.50
  • The pharmaceutical company has reported that product A is not generally available. The product is also not reimbursable. The price band and the reference price are determined by the cheapest available reimbursable product, product B.
    • Kela determines the upper limit of the price band on the basis of the price of product B as follows: EUR 2.00 + 0.50 = 2.50.
    • Hila determines the reference price on the basis of the price of product B as follows: EUR 2.00 + 0.50 = 2.50.
  • The price band includes products B, C and D, with a price range of EUR 2.00–2.50. (printed in bold in the table)
  • The reference price applies to the reimbursable products B, C, D and E.
  • If the customer is prescribed product E, the pharmacy must substitute it for a product that is included in the price band. However, the customer can forbid the substitution. In such a case, he or she will get reimbursement on the reference price and will have to pay the amount of EUR 0.50 that exceeds the reference price himself or herself.