New report from TLV highlights importance of managed entry agreements

A new publication from the Swedish Dental and Pharmaceutical Benefits Agency (TLV), The development of pharmaceutical expenditure in Sweden, demonstrates that managed entry agreements between pharmaceutical companies and county councils dampen the cost increase of new therapeutics and provide better conditions for early and equal access.

Managed entry agreements for pharmaceuticals are special agreements made between manufacturers and providers. Since 2014, Swedish county councils and companies have agreed, via managed entry agreements for certain pharmaceuticals, that companies refund a certain amount of the costs to the county councils. The report indicates that pharmaceutical companies were expected to refund nearly kr 1 billion (US$ 122 million) to the county councils in 2017, a 30% increase over the previous year.

TLV coordinates this process in the context of 3-party deliberations and continuously monitors the outcome of the agreements. The therapeutic fields with the most agreements are hepatitis C, cancer and tumour necrosis factor (TNF) inhibitors. These are also fields in which expenditure and treatment costs are high, and several companies compete.

“Managed entry agreements provide the opportunity to cope with uncertainties when bringing new, innovative and effective pharmaceuticals to patients faster and more equally. They also make considerable resources available for other urgent health-care needs,” says Pontus Johansson, Senior Economist at TLV.

In the report, TLV recognizes major challenges in the pharmaceutical field both in Sweden and internationally. The trend is for new pharmaceuticals to be introduced at an earlier stage, which means that the uncertainties surrounding these pharmaceuticals are often high.

TLV also notes that in the coming years, it is likely that the factors that increase the cost of pharmaceuticals will be stronger than the cost-cutting effects. However, managed entry agreements will become an increasingly important tool to dampen cost increases, together with generic competition, and reassessments and price reductions for products that are older than 15 years.