Price control as a strategy for pharmaceutical cost containment - what has been achieved in Norway in the period 1994-2004?

OBJECTIVES: To describe and evaluate the different price control strategies implemented in Norway after its accession to the European Economic Area (1994-2004).
METHODS: Interviews with ten key persons who had broad insight into the field in question were held. All the available literature was reviewed.
RESULTS: Direct price control involving international reference pricing of prescription drugs, and the subsequent price revisions, that occurred from the year 2000 onwards, resulted in predictable and substantial price reductions. With respect to the indirect methods which targeted the off-patent market, the price reductions resulting from reference-based pricing (1993-2000) were only marginal and the achieved savings derived mainly from increased patients' charges. The introduction of generic substitution in 2001 led to increased market shares for non-branded products, but discounts from the manufacturers were not reflected in retail prices. An index price system (2003-2004) was therefore created; but as it entailed negative economical incentives for the pharmacy chains, the price changes did not meet the expectations.
CONCLUSION: The direct pricing strategy, i.e. the international reference pricing, was considered to be the most successful method. In contrast, due to the unpredictability of the market situation, the resulting effects of the indirect methods, i.e. reference-based pricing, generic substitution, and index pricing, were more limited.