Effect of deregulation on the prices of nicotine replacement therapy products in Finland.

OBJECTIVE: The sales of nicotine replacement therapy (NRT) products were deregulated in Finland in February 2006. Previously all medications were sold only in pharmacies, and retail mark-ups and prices were fixed; following deregulation pricing of NRT products has been free. Further more, grocery shops, petrol stations and kiosks are now licensed to sell NRT products. The objective of this study is to evaluate the impact of deregulation on prices of NRT products. METHODS: We utilized price data on NRT products (n=2106) from pharmacies, grocery shops, kiosks and petrol stations. Market prices are compared with former regulated prices, as are the prices at different types of outlets. We examined the relationship between competition and prices by regression analysis. RESULTS: The average price of NRT products decreased 15% after deregulation. About half of the price decrease was due to exemption of NRT products from the pharmacy fee as part of deregulation, and the other half to increased competition. The least expensive NRT products are obtainable in hypermarkets; however, pharmacies have the largest variety. CONCLUSIONS: Deregulation of NRT products in Finland was successful in that the prices of these products have decreased and their availability increased. Based on international experience, however, it is not clear whether these decreased prices and increased availabilities have increased smoking cessation.

The impact of generic substitution on price competition in Finland.

Generic substitution by pharmacists was introduced in April 2003 in Finnish pharmaceutical markets. This article examines the impact of generic substitution on price development. This study examined all of the 2,100 substitutable drugs in Finland. The impact of generic substitution on price competition was significant. The average price of substitutable drugs decreased by more than 10%. However, the price development was uneven; some prices increased whereas others decreased by more than 50%. The most important factors that influenced the price development were the number of competitors, whether the drug was originator or generic and the width of the price band.