I INTRODUCTION

Healthcare in Sweden is the shared responsibility of the state, county councils and municipalities. The state is responsible for the overall health and medical care policy.

The Ministry of Health and Social Affairs acts to meet the objectives set by the Swedish parliament and the government. Several independent agencies answer to the Ministry of Health and Social Affairs. The following agencies support the Ministry's activities on health and medical care: National Board of Health and Welfare, Medical Responsibility Board, Swedish Agency for Health Technology Assessment and Assessment of Social Services, Medical Products Agency (MPA), Swedish Agency for Health and Care Services Analysis, Dental and Pharmaceutical Benefits Agency (TLV) and Health and Social Care Inspectorate. In addition, the Swedish eHealth Agency and the Public Health Agency of Sweden were implemented on 1 January 2014. Manufacturing of medicinal products and medical devices is one of the largest industries in Sweden and seen as a high priority by the Swedish government; Sweden is the EU innovation leader, according to the European Innovation Scoreboard.

Being an EU Member State, Sweden's legal framework on medicinal products and medical devices is based on relevant EU directives and is subject to EU regulations. The national legislative basis for oversight and enforcement of medicinal products in Sweden is primarily stipulated in the Medicinal Products Act2 and the Medicinal Products Ordinance,3 and for medical devices in the Medical Devices Act4 and the Medical Devices Ordinance.5

II THE REGULATORY REGIME

The Medicinal Product Act and the Medicinal Products Ordinance are based on Directive 2001/83/EC, and the Medical Devices Act and the Medical Devices Ordnance are based on Directives 90/385/EEC, 93/42 EEC and 98/79/EC. There are additional regulations and guidelines issued by the MPA.

Notably, on 5 April 2017, two new regulations on medical devices were adopted within the European Union; Regulation (EU) 2017/745 on medical devices and Regulation (EU) 2017/746 on in vitro diagnostic medical devices. They entered into force on 26 May 2017, replacing the existing directives. However, the new rules will only apply after a transitional period of three years after entry into force for the regulation on medical devices (in spring 2020), and five years after entry into force for the regulation on in vitro diagnostic medical devices (in spring 2022).

i Classification

The definition of a medicinal product corresponds with the definition found in Directive 2001/83/EC. According to Chapter 2 Section 1 of the Medicinal Products Act, a medicinal product is:

  1. any substance or combination of substances having properties for treating or preventing diseases in human beings; or
  2. any substance that may be used in or administered to human beings or animals either with a view to restoring, correcting or modifying physiological functions by exerting a pharmacological, immunological or metabolic action, or to making a medical diagnosis.

The two primary determining factors for classifying a medicinal product are the content of the product and the intended use of the product. Other factors that may affect the classification of the product are, for example, (1) the formulation of the product, (2) how the product is marketed, and (3) whether or not the product meets the requirements of medical devices, in which case the legislation on medical devices will apply.

A product that does not fall under the definition of a medicinal product according to the above definition and determining factors, can nevertheless, because of its characteristics, purpose and use, be covered by the Medicinal Products Act, in line with MPA Regulation LVFS 2011:15. For instance, a product can be classified as a medicinal product even without containing any active substances (e.g., products that would seem to fall within the scope of food, food supplements or cosmetics).

The definition of a medical device is broad and includes products ranging from plasters to advanced diagnostics scanners. The definition in Swedish legislation is based on the applicable EU directives, and the primary national definition is stipulated in Section 2 of the Medical Devices Act, which states that a medical device is a product that, according to the manufacturer, is intended for use, separately or in combination with other products, in human beings for the purpose of:

  1. diagnosis, prevention, monitoring, treatment or alleviation of disease;
  2. diagnosis, monitoring, treatment, alleviation of or compensation for an injury or handicap;
  3. investigation, replacement or modification of the anatomy or of a physiological process; or
  4. control of conception.

However, if the product achieves its principal intended action in or on the human body by pharmacological, immunological or metabolic means, it is not a medical device according to the Medical Devices Act.

The Medical Devices Act also stipulates certain requirements of medical devices. For instance, according to Section 5 of the act, a medical device must be suitable for its intended use. A device is suitable if it is delivered and installed in accordance with the manufacturer's directions and if it achieves its purposes according to the manufacturer and caters for the requirements of protection of life, personal safety and the health of patients and users. These safety requirements derive from the EU legislation on medical devices.

In addition, the Product Safety Act6 applies to medical devices that are intended for consumers, or if it can be assumed that the device will be used by consumers, in areas of product safety that are not covered by the Medical Devices Act.

ii Non-clinical studies

A candidate drug must be tested for efficacy and security in a non-clinical study before it is tested on human beings in a clinical trial. The scope and type of experiments and studies that have to be carried out in the non-clinical study are laid down, for example, in guidelines issued by the European Medicines Agency (EMA). The European Commission has also issued guidelines on non-clinical studies, which give detailed information regarding the types of non-clinical studies that need to be carried out prior to conducting a clinical study.

Non-clinical studies sometimes involve animal testing. The Swedish legislation governing animal protection in general and animal testing in particular is strict, and animal testing methods may only be used if the intended results of the research cannot be reached with any other method. All animal testing in Sweden must be in accordance with the Animal Protection Act7 and before any animal experiment begins, it must be approved by an ethics committee.

A non-clinical study must, throughout the entire process, meet the requirements of good laboratory practice (GLP). The Swedish requirements on GLP are in line with the standards set out in Directives 2004/9/EC and 2004/10/EC. The monitoring authority on GLP in Sweden is the MPA. The authority may, for example, conduct inspections to ensure that non-clinical studies are in compliance with applicable GLP standards.

iii Clinical trials

According to the Medicinal Products Act, a clinical trial may be carried out to establish or confirm the safety and effectiveness of a medicinal product. The trial may be conducted either with or without a connection to regular medical treatment. It must be performed by a qualified medical doctor (or dentist or veterinary surgeon, as applicable) with sufficient knowledge and experience of managing clinical trials. As mentioned above, a non-clinical trial must have been carried out prior to conducting the clinical trial.

Before a clinical trial can be conducted, it must be approved by the MPA, in line with the Medical Products Act. For clinical trials involving human beings, there are also applicable rules set out in the Ethical Review Act,8 including, inter alia, the requirement to obtain approval by an ethics committee. Clinical trials also require explicit consent of the study subject, and the trial subject must have been duly informed about the study, the risks involved and about his or her right to withdraw from the trial at any time.

MPA Regulations LVFS 2011:19 and 2004:6 state that the principles of good clinical practice and the most recent edition of the World Medical Association's Declaration of Helsinki must be observed during a clinical trial. In clinical trials where a substance is tested in human beings for the first time, the EMA Guideline on Strategies to Identify and Mitigate Risks for First-in-Human Clinical Trials with Investigational Medicinal Products should be observed, and any deviation should be justified in the application to perform the trial.

According to the Medical Devices Act, the government or the relevant competent authority may decide what types of medical devices shall be tested clinically and how the clinical trial shall be performed. The MPA has been given the authority to oversee clinical trials of medical devices. A clinical trial shall only be performed when the necessary information about a device's performance, safety and use cannot be established or confirmed without testing in human beings.

Clinical trials in Sweden have to be registered with the European Clinical Trials Register. The personal data of patients collected during clinical trials must be processed in accordance with the EU General Data Protection Regulation9 and the Patient Data Act,10 which specifically govern the processing of sensitive, or 'special categories', of personal data, including, for example, personal information about health, biometric data, genetic data or a natural person's sex life.

iv Named-patient and compassionate-use procedures

In some cases, certain medical needs are not met by approved medicinal products. In such cases, affected patients are, in addition to participation in clinical trials, able to obtain treatment through named-patient use licensing, a compassionate-use programme (CUP) or through a hospital exemption. The use of unauthorised medicinal products is primarily governed by the Medicinal Products Act, the Medicinal Ordinance and MPA Regulations LVFS 2008:1 and LVFS 2011:3.

There are mainly three ways in which a patient can get access to an unauthorised medicinal product. First, the MPA can at short notice allow a prescription through a special permission (licence) on a named-patient basis, either for a specific person (individual licence) or to a group of patients being treated at a clinic or another equivalent institution (general licence). The named-patient permission is available for prescribers to facilitate necessary treatment when medical conditions cannot be treated with approved medicinal products. The prescriber may initiate the application process by writing a prescription and handing it in at a pharmacy with their justification for the prescription. If there are no approved treatment options available, the pharmacy shall then submit the application to the MPA for individual assessment. There are certain specific requirements for the reporting of adverse reactions applicable to named-patient sales.

Second, patients are able to access unapproved medicinal products through a CUP that is governed by Regulation (EC) No. 726/2004 on compassionate use of medicinal products. The purpose of a CUP is to complement the named-patient licensing procedure. It is intended for patients with a chronic or seriously debilitating disease, or patients whose disease is considered life-threatening and cannot be treated satisfactorily with an authorised medicinal product. Certain requirements about satisfactory documentation of efficacy and safety apply, as well as specific obligations for the responsible physician to report adverse reactions. The permit holder must also submit annual safety reports to the MPA.

Third, access to an unauthorised medicinal product can be provided through a hospital exemption. This means that, under certain conditions, a healthcare provider can obtain a manufacturing permit from the MPA to use advanced therapy medicinal products that have not been evaluated or approved in the European Union. The product must be customised for a specific patient on a non-routine basis. A qualified person must be appointed to be responsible for the treatment and the treatment is subject to applicable rules on good manufacturing practice (GMP). The MPA may revoke the permit temporarily or permanently.

v Pre-market clearance

The MPA grants marketing authorisation for medicinal products in Sweden according to certain procedures. A marketing authorisation is mandatory for manufacturers or importers of medicinal products before they can engage in any sales activity. The MPA grants marketing authorisations under the mutual recognition procedure (MRP), the decentralised procedure (DCP) and the national procedure. The EMA also grants marketing authorisations under the centralised authorisation procedure; these authorisations apply directly in Sweden.

When an application is made for marketing authorisation under the MRP, reference is made to a national marketing authorisation in another EU Member State, which should then be recognised in Sweden unless the MPA finds reason to believe that the medicinal product may pose a serious risk to public health. Under the DCP, an application is made in several EEA Member States with a request that the medicinal products agency in one particular state shall serve as the reference Member State. The medicinal products agency in that reference Member State (e.g., the MPA in Sweden) shall manage the review of the application by preparing the necessary documentation for assessment by the other Member States affected by the application.

When medicinal products are to be granted marketing authorisation in Sweden through the national procedure, the applicant must be able to establish, inter alia, that the medicinal product meets the requirements set out in Chapter 4 of the Medicinal Products Act. To obtain marketing authorisation, the medicinal product must meet the requirements of quality, efficacy and safety and be effective for its intended purpose. An applicant must also show that the medicinal product is not disproportionately harmful in achieving its intended effect. The packaging of the medicinal product needs to meet certain standards too (e.g., the packaging must be functional), and all information about the medicinal product has to be accurate and comprehensible. The MPA may grant a marketing authorisation subject to certain conditions, which should be reviewed annually.

A marketing authorisation is valid for a period of five years, and may thereafter be renewed for another five-year period or without any time limit.

Medical devices are not subject to pre-market approval in Sweden or the European Union. However, all medical devices must meet the requirements of the applicable legislation and it is the responsibility of the manufacturer to ensure compliance. To confirm that a medical device conforms with the applicable legal requirements, it should be provided with a CE mark prior to being placed on the market. The CE mark procedure is dependent on the classification of the medical device. High-risk medical devices must also be assessed by a third person, known as a 'notified body', prior to being placed on the market.

vi Regulatory incentives

Patent protection for an invention is typically valid for 20 years from the filing date of the patent application. However, patents for medicinal products can, according to Regulation (EC) No. 469/2009, have the term of protection extended for generally up to five years by a Supplementary Protection Certificate (SPC). The rationale of the supplementary protection springs from the fact that development and authorisation of medicinal products is complex and time-consuming, and that long periods typically pass between the filing date of the patent and when the product may first be placed on the market. The purpose of an SPC is thus to compensate the patent owner for the time when the patent rights cannot be commercialised.

The Swedish Patent and Registration Office handles applications and grants certificates for supplementary protection. An SPC protects the active substance that is covered by the patent and authorised for sale on the market. The supplementary protection will take effect once the original patent has. In some circumstances, the initial term of protection by the SPC (never longer than five years) may be extended by an additional six months if the patent owner has tested the suitability of the medicinal product in children.

A medicinal product for use in human beings can also be granted a one-year regulatory data exclusivity by the MPA if an application for marketing authorisation has been granted for a new indication for an already established substance and if substantial clinical assessments and studies of the new indication have been made. Data exclusivity protection means a prohibition for generic medicinal products to refer to documentation of the reference medicinal product.

vii Post-approval controls

The legal framework for supervision and control of medicinal products is harmonised with applicable EU legislation, including, inter alia, Directive 2010/84/EC and Regulation (EU) 1235/2010. According to the Medicinal Products Act, the MPA is responsible for the supervision of medicinal products in Sweden. The purpose of the supervision is to collect, record, store and scientifically evaluate data on suspected adverse reactions. The MPA regularly controls authorised medicinal products and evaluates whether the authorisations should remain in effect. The MPA may order a marketing authorisation holder to verify that the medicinal product still meets the requirements and, if considered necessary for safety reasons, it may withdraw the marketing authorisation.

Swedish law also requires marketing authorisation holders to maintain an internal system for surveillance of safety and to observe and adjust to developments in the pharmaceutical field, such as new scientific research or new recommendations from the MPA. The marketing authorisation holder shall register, keep, evaluate and report to the MPA any information on all suspected adverse reactions of its medicinal products. If the marketing authorisation holder detects circumstances that may render inaccurate the information and documentation upon which the authorisation is based, it must report this to the MPA. Furthermore, there is an obligation for the marketing authorisation holder to inform the MPA two months in advance if a product is permanently or temporarily taken off the market in Sweden, and to state the reasons for this. For the purpose of its overall safety surveillance, marketing authorisation holders must keep a qualified person with sufficient knowledge and experience at its disposal.

viii Manufacturing controls

Manufacturing of medicinal products shall take place in suitable premises and be carried out using appropriate equipment. All manufacturing must be in accordance with GMP and a qualified person with sufficient knowledge and influence shall be responsible for ensuring that the quality and safety standards and the requirements of the medicinal products are met.

According to the Medicinal Products Act and MPA Regulation LVFS 2004:7, professional manufacturing of medicinal products requires a manufacturing authorisation by the MPA. The MPA will regularly perform inspections of the facilities to ensure compliance with the relevant requirements for the manufacturing authorisation. A manufacturing authorisation is valid for the time specified in the permit and may be extended subject to continued compliance with the requirements.

A manufacturing authorisation can be revoked by the MPA if, for instance, if any of the required conditions mentioned above are no longer being met or if the manufacturer has not paid the applicable annual fees to the MPA.

As mentioned in Section II.v, it is the responsibility of the manufacturer of a medical device to ensure compliance with the requirements of the applicable legislation, including the Medical Devices Act and MPA Regulations LVFS 2003:11 and LVFS 2001:7. To facilitate inspections by the MPA, inter alia, Swedish manufacturers and authorised representatives that manufacture or provide certain medical devices are required to register with the MPA. However, registration does not result in approval of the medical device.

ix Advertising and promotion

The Marketing Practices Act,11 which governs advertisements in general, is also applicable to the advertising of medicinal products. Its aim is to protect consumers from misleading advertisement and unethical marketing practice. The Radio and Television Act12 is also applicable.

The Medicinal Products Act and the MPA's provision published in the MPA's Code of Statutes13 contains specific rules on the advertising of medicinal products. The Medicinal Products Act stipulates that only medicinal products that have been granted marketing authorisation may be advertised in Sweden. The Act includes requirements that, for example, an advertisement has to be up to date, objective and balanced. It must also be accordance with best practice for the advertising of pharmaceuticals. Advertisements that are misleading, addressed to children or for prescription-only medicinal products are prohibited (with the exception of campaigns for vaccination against human infection diseases). The rules apply both to advertisements aimed at the general public and at healthcare professionals. The Medicinal Products Act stipulates that pharmaceutical companies shall have an in-house function with scientific competence who is responsible for surveillance of the provision of information about their medicinal products.

The research-based pharmaceutical industry in Sweden has, through its trade organisation, the Swedish Association of the Pharmaceutical Industry (LIF), developed a system of self-regulation in the pharmaceutical sector. LIF has adopted ethical rules and a self-regulation system concerning, inter alia, the advertising of medicinal products to the public sector and healthcare professionals in 'The Ethical Rules for the Pharmaceutical Industry' (the LIF Ethical Rules), which came into force on 1 October 2007; the most recent revision is valid as of 12 February 2018.

Compliance with the LIF Ethical Rules is kept under constant scrutiny by the LIF Information Examiner Committee (IGN). The IGN is responsible for investigating cases and imposing sanctions, both on its own initiative and in response to complaints. IGN's decisions may be appealed to the Information Practices Committee (NBL).

The LIF Ethical Rules have a very important role in the marketing and promotion of medicinal products. Even though they are based on contractual obligations and are not legally binding, the Rules are widely respected and adhered to by the pharmaceutical industry. They are also often considered by the courts as an expression of fair and ethical marketing.

x Distributors and wholesalers

Distribution, including the wholesale and retail of medicinal products, is governed primarily by the Act on Trading in Medicinal Products,14 the Ordinance on Trading in Medicinal Products15 and MPA Regulation LVFS 2014:8. In addition, there are guidelines issued by the MPA on the interpretation of these rules, as well as guidelines on good distribution practice (GDP) issued by the European Commission.

According to the Act on Trading in Medicinal Products, all distribution of medicinal products shall be conducted in such a way that the products do not harm human beings, property or the environment, and that the quality of the products is not impaired.

The wholesale of medicinal products includes all handling of a medicinal product from the moment it is released from the manufacturer until it reaches the retail level, and is defined in the Act on Trading in Medicinal Products as activities that include acquisition, possession, export, delivery and sale (but excluding retail sale). Retail sale is defined as the sale of medicinal products to consumers, county councils, municipalities, hospitals or other healthcare facilities and to entities authorised to prescribe medicinal products.

A permit from any country within the European Economic Area (EEA) is required to engage in distribution of medicinal products. In Sweden, the MPA may grant such permits.

Permits for the wholesale or retail of medicinal products may be granted only to applicants that are proven capable of meeting certain specific requirements in the Act on Trading in Medicinal Products, including requirements regarding, inter alia, the suitability of the facilities being used and the competence of personnel involved in conducting the distribution activities. Specifically, a wholesaler must also be able to ensure, inter alia, a reliable supply to pharmacies of the medicinal products covered by its permit, must document the handling of medicinal products in such a way as to ensure traceability, must maintain active surveillance to discover and report any suspected forfeited pharmaceuticals, and must adhere to accepted standards of GDP. Retailers must, inter alia, ensure availability of at least one pharmacist in the retail facility during opening hours if supplying medicinal products to consumers (e.g., pharmacies) and have an obligation to supply all prescription pharmaceuticals as well as all medicinal products included in the Swedish pharmaceutical benefits system.

Distribution of medical devices is generally not subject to any specific rules and therefore no particular authorisation is required. However, the trading and importation of syringes and needles are governed by a specific act, an ordinance by the government and a regulation by the MPA.

xi Classification of products

Pursuant to Chapter 4 of the Medicinal Products Act, a medicinal product will, in connection with the granting of marketing authorisation, be classified either as a prescription-only or a non-prescription medical product. The MPA will decide the classification for the medicinal product depending on its intended use and characteristics. A prescription-only medical product may be classified into other categories, with limitations for how it can be prescribed and dispensed.

The MPA shall reconsider and, if necessary, change the classification of the medicinal product if new information or circumstances of significant importance for the classification of the medicinal product comes to its attention or if the marketing authorisation holder applies for a change of classification.

Classification of medical devices is governed by Directives 93/42/EEC and 98/79/EC, the Medical Devices Act, the Medical Devices Ordinance and MPA Regulations LVFS 2001:7 and LVFS 2003:11 (see also Section II regarding new EU regulations on medical devices). There are six groups of classification for general medical devices and four groups for in vitro diagnostic medical devices, which reflect the risks associated with the devices. Active medical devices for implantation are considered to be consistently associated with very high risks and these devices are therefore not divided into risk classes. The classification will also determine what type of procedures the manufacturer must apply to ensure that the products comply with legal requirements (see Section II.v).

xii Imports and exports

According to the Medicinal Products Act, medicinal products can only be imported into Sweden from a country outside the EEA by someone holding a manufacturing authorisation or a specific authorisation for importation. The latter may be granted by the MPA if: (1) the medicinal product is imported to ensure that the demand for that medicinal product is met; (2) the medicinal product is intended to be used for purposes other than healthcare; or (3) the medicinal product is an investigational medicinal product. The importer of a medicinal product from a third country is responsible for the release of that product within the EEA.

An importation authorisation holder must appoint a qualified person with sufficient competence and influence to be responsible for the control of the imported medicinal product.

Repackaging and relabelling of medicinal products is also subject to a manufacturing authorisation by the MPA; the new package and label must comply with the requirements set out in MPA Regulation LVFS 2005:11 (which has been supplemented and amended by MPA Regulation HSLF-FS 2018:62, which enters into force on 9 February 2019).

There are exceptions to the requirement for importation authorisation for products from outside the EEA. For example, natural persons may bring medicinal products to Sweden if they have a medical purpose and will be used personally by the importer. Second, veterinarians may under certain circumstances bring smaller amounts of medicinal products for animals into Sweden without an importation authorisation.

No specific importation authorisation is required to import medical devices into the EEA. In general, the manufacturer is responsible for ensuring that medical devices released on the EEA market comply with applicable rules and regulations. If an importer of a medical device from outside the EEA releases a product on the EEA market in its own name, the same requirements apply to the importer as would have applied to the manufacturer. Furthermore, as stated in Section II.xi, specific requirements apply to the importation of syringes and needles.

It should also be noted that the requirements applicable to manufacturers according to the definition in the Product Safety Act also apply to importers.

xiii Controlled substances

Controlled substances particularly include narcotic substances. Narcotic drugs are defined in the Penal Law on Narcotics16 as medicinal products and hazardous goods with addictive properties or euphoric effects, or goods that can be readily converted into products with those properties or effects, and (1) on these grounds are included in an international agreement to which Sweden is a part (including the 1961 UN Convention on Narcotic Drugs) or (2) the Swedish government has declared that the substance shall be considered a narcotic. The MPA has listed all substances classified as narcotics in Regulation LVFS 2011:10.

According to the Act on the Control of Narcotic Drugs,17 medicinal products classified as narcotics are under the supervision and control of the MPA. A general permit issued by the MPA is required to import, export, transport, produce, trade or possess narcotic medicinal products. Furthermore, certain narcotic substances require an additional permit for each individual occasion when the substance is brought into or out of Sweden. However, there are some exceptions; for instance, governmental or municipal institutions do not need a permit to possess narcotics if used for scientific research, studies or education.

Other categories of substances subject to special control include, for example, psychotropic substances, doping substances and certain hazardous goods.

xiv Enforcement

The MPA is responsible for the supervision and enforcement of compliance with Swedish legislation and a number of EU Regulations and Directives on medicinal products and medical devices. The EMA is responsible for the supervision of compliance with certain requirements relating to centrally approved medicinal products.

The MPA is authorised to demand any information needed during its supervision, both oral and in writing. The MPA has authority to access areas, premises and other facilities used for the manufacturing or handling of medicinal products and medical devices, active substances, auxiliary substances and packaging materials for medicinal products, and to obtain samples of medicinal products and medical devices. It may also gain access to facilities where testing of medicinal products takes place. However, the MPA does not have the right to access private homes.

If the MPA finds it necessary, it may issue injunctions and prohibitions for compliance with the relevant legislation. An injunction or prohibition may be combined with a fine. A fine may also be imposed if the MPA is denied access or assistance when conducting its supervision.

The MPA may decide to recall medicinal products from the market and to temporarily or permanently revoke marketing authorisations.

Certain violations of regulatory requirements relating to medicinal products and medical devices may be considered criminal and be punished pursuant to the Medicinal Products Act and the Medical Devices Act; punishments range from fines to imprisonment for up to one year. Offences may also be punishable under the Swedish Penal Code.

Pursuant to the Marketing Practices Act, in the event of a breach of regulatory requirements, prohibitions and constraints can be imposed by a competent court. A prohibition for a company to continue with a measure contrary to the Marketing Practices Act may be combined with a fine. Disruption of marketing practices may also lead to fines and liability.

The LIF Ethical Rules, while not legally binding, impose sanctions such as fines on non-complying organisations that have not contractually adhered to the rules. The IGN and NBL are responsible for enforcement of the LIF Ethical Rules.

III PRICING AND REIMBURSEMENT

Non-prescription (over-the-counter) medicinal products are not subject to regulated pricing, and are paid for entirely by the end customer. The pricing of prescription medicinal products that are included in the reimbursement system are regulated, however, and the patient makes a co-payment. The prices for in-patient care medicinal products are negotiated in public procurement processes, and the patient only pays the patient fee that applies for the in-patient treatment concerned.

The Swedish reimbursement system subsidises the costs for certain medicinal products through a reimbursement scheme. The patient pays the full cost, up to a certain ceiling. The costs for medicinal products above that ceiling are then reduced step by step over a period of 12 months. The maximum amount a patient will pay during this period is 2,300 kronor (as of 1 January 2019).

The TLV, which is an expert state agency, decides to what extent a medicinal product shall be reimbursed, according to the Pharmaceutical Benefits Act.18 For a medicinal product to be covered by the reimbursement scheme, an application must be submitted to the TLV. In the application, the applicant must state the requested price of the product and enclose documentation that includes a health economic analysis. An application is granted if the TLV finds that the health economic analysis shows that the requested price is justified on the basis of the value the medicinal product brings in terms of improved health (i.e., it is cost-effective and brings a marginal benefit to the market). The price should be based on general principles, such as cost-effectiveness, and the principle of prioritising patients with the greatest needs. A decision on reimbursement is thus based on value, which is often described in Swedish terms as applying 'value-based pricing of pharmaceuticals'. In fact, prices can be freely set under a value-based ceiling. There are few countries that apply the value-based pricing of pharmaceuticals. Instead, most EU countries apply international reference pricing in some form. The TLV also decides and sets the retail margin, which is the fee paid by the state when pharmacies sell a prescription medicinal product.

Since 1 January 2016, all children under 18 have been offered free medicinal products and medical devices included in the reimbursement scheme. The purpose of this is to reduce the inequality of children's health between societal groups with different financial conditions.

Pharmacies in Sweden are required to offer the least expensive medicinal product when there are equivalent and substitutable medicinal products available on the market. Even if the patient has a prescription for a specific medicinal product, and as long as the prescribing doctor has not opposed substitution for medical reasons in writing, the pharmacy must offer the product with the lowest price. If the patient refuses a substitute, he or she may choose to pay the difference between the prescribed product and the cheapest alternative.

Medical devices are subject to the same reimbursement rules as medicinal products, as long as the devices are prescribed by a physician and are to be used by patients. However, the rules regarding substitution of medicinal products do not apply to medical devices.

IV ADMINISTRATIVE AND JUDICIAL REMEDIES

Decisions made by the MPA, the TLV and other governmental authorities can be appealed to the Swedish administrative courts. The Administrative Procedures Act19 governs the procedure for appeals. Decisions and judgments from the administrative courts may, in most cases subject to granting of leave to appeal, be appealed to one of the administrative courts of appeal, whose decisions and judgments may further be appealed to the Supreme Administrative Court. Proceedings in the administrative court system are primarily conducted in writing, but oral hearings are possible if requested by a party or if the court finds it appropriate.

Appeals of decisions by authorities such as the MPA and the TLV are submitted directly to the authority. The main rule is that an appeal must be submitted so that it is received by the authority no later than three weeks after the date on which the appellant received the decision, or it may be inadmissible. The appeal will be forwarded by the authority to the relevant administrative court only if the authority does not adjust its original decision as claimed by the appellant. If all formal requirements of appeal are fulfilled, and an appeal is not dismissed on formal grounds, the administrative courts are authorised to assess an appealed decision in its entirety. The likely outcomes are, depending on the circumstances in each case, either rejection of the appeal, material change of the appealed decision or referral of the case back to the authority for reassessment in accordance with any statements of reason from the court.

V FINANCIAL RELATIONSHIPS WITH PRESCRIBERS AND PAYERS

There are no mandatory anti-corruption laws aimed particularly at the pharmaceutical and healthcare industries. Instead, Sweden's anti-corruption rules apply on a general level. Additionally, Sweden is a signatory to many international anti-corruption conventions, including, but not limited to, the UN Convention against Corruption and the Council of Europe's Civil Law Convention on Corruption. On a national level, anti-corruption rules exist in the form of anti-bribery rules in Chapter 10 of the Swedish Penal Code. The Swedish Anti-Corruption Institute has supplemented the anti-corruption legislation with a 'Code on gifts, rewards and other benefits in trade and industry' (the Business Code). This Business Code does not have status as law, but constitutes a clarification of the general anti-corruption legislation. The intention is that entities that follow the Business Code should be able to rely on their actions being lawful. For a fee, the Ethics Committee of the Anti-Corruption Institute may render an assessment of whether or not a contemplated action is compatible with the Business Code.

There are specific rules applicable to the pharmaceutical industry through the LIF Ethical Rules, which are based on the ethical rules of the European Federation of Pharmaceutical Industries and Associations (although, as stated in Section II.ix, these ethical rules are not mandatory, strictly speaking). The LIF Ethical Rules govern collaboration between the pharmaceutical industry on one hand and healthcare professionals, healthcare organisations, patient organisations and decision makers on the other. The LIF Ethical Rules also include provisions regarding disclosure of transfers of value by the pharmaceutical industry to, for example, healthcare professionals, healthcare organisations, pharmacies, veterinary surgeons and decision makers. Pharmaceutical companies that are active on the Swedish market shall publish the persons or organisations in Sweden that have received transfers of value during a given calendar year, or the aggregate value of the transfers. LIF publishes reported transfers of value on its website.

Furthermore, the Swedish Association of Local Authorities and Regions, LIF, Swedish Medtech and Swedish Labtech have agreed on common rules regarding cooperation and interaction between stakeholders in healthcare and the pharmaceutical industry. The agreement came into force on 1 January 2014.

VI SPECIAL LIABILITY OR COMPENSATION SYSTEMS

According to the Patient Injury Act,20 patients who suffer personal injury while in the healthcare system may be entitled to financial compensation. If a medicinal product causes the injury, the patient may claim damages, according to the Product Liability Act.21 The Act is applicable to damages caused by correctly prescribed medicinal products. Damages can also be claimed under the general Tort Liability Act.22

There are several insurances that can cover injuries caused to patients within the healthcare system. For healthcare providers in Sweden, it is mandatory to hold insurance that covers bodily injuries caused to patients receiving treatment.

Other insurances are voluntary, such as the medicinal products insurance provided by the Pharmaceutical Insurance Association. Any manufacturer of medicinal products that finds it reasonable or necessary can acquire a medicinal products insurance policy to cover damages caused by its products to patients receiving medicinal products in medical treatment or to study subjects participating in clinical trials. Almost all pharmaceutical companies have obtained medicinal products insurance, and for this reason, almost 99 per cent of all pharmaceuticals sold in Sweden are covered.

Pursuant to the Patient Safety Act,23 healthcare professionals must fulfil their work based on medical findings and established practices. Patients who are not satisfied with their treatment can file a claim with the Health and Social Care Inspectorate, which supervises healthcare professionals. If the Inspectorate finds a breach in a patient's treatment, it can report the healthcare provider to the Medical Responsibility Board, which is a court-like agency that examines authorisation issues regarding healthcare professionals and has authority, for example, to withdraw licences to practise medicine.

VII TRANSACTIONAL AND COMPETITION ISSUES

i Competition law

Swedish competition law is based on EU competition rules and is mainly regulated by the Swedish Competition Act.24 The Act regulates, inter alia, the prohibition of agreements between undertakings that may harm competition, as well as the prohibition of abuse of a dominant position. There are no specific competition rules for the pharmaceutical sector; however, the Act comprises block exemptions that are of importance to the sector. The supervising authority, the Swedish Competition Authority (SCA), has not issued any competition guidelines specific to the pharmaceutical sector.

Companies that breach competition law can be required by the SCA to terminate the infringement. In addition, the SCA can decide to supplement such a requirement with an administrative fine. Infringements of competition law are also pursued by the patent and market courts as well as the European Commission.

Relevant to the application of competition law to the pharmaceutical sector is the fact that from 2009, the Swedish pharmacy market was re-regulated and new legislation was adopted. Since then any appropriate market actor can own and run pharmacies, except for producers and prescribers of medicinal products. The state-owned company Apoteket AB, which since 1970 had the exclusive right to conduct retail trade in medicinal products to consumers, is now competing with private pharmacies and other market stakeholders with regard to certain over-the-counter products.

There are many elements in Swedish legislation that are relevant to competition. One is the mandatory substitution of equivalent medicinal products (see Section III).

The pharmaceutical sector has often been subject to the scrutiny of the SCA. During 2015 and 2016, the Authority investigated a possible abuse of a dominant position by some pharmaceutical distribution companies refusing to supply medicinal products to a company that had both a retail and a wholesale licence. The SCA stated that pharmaceutical distribution companies are only obliged by law to supply medicinal products to retailers (i.e., pharmacies) and not to wholesalers, and that the pharmaceutical companies had not committed any abuse by refusing to supply once it became clear that the company was not purchasing under its wholesale licence (which did not include an obligation to supply).

ii Transactional issues

A number of complex issues arise in connection with transactions. What are the risks or problems of particular importance for the transaction? The material agreements (supply, manufacturing, licensing and other collaboration agreements) are often specific to the industry and subject to local rules and regulations, and may thus be complex and require sophisticated assessment. As many companies in the life sciences sector often have important intellectual property rights, it is very important that these rights are considered in a transaction. It is also essential to ensure that all the permits, licences and certificates required for operations remain valid after a transaction. This may include manufacturing authorisations, licences for the wholesale of pharmaceuticals, and licences for the handling, importation or wholesale of substances such as narcotics and radioactive substances, as well as GMP certificates. It is vital that communications with the authorities are scrutinised.

VIII CURRENT DEVELOPMENTS

There is a continued focus from the Swedish government on the pricing and reimbursement of medicinal products. In 2016, the Swedish government established a public inquiry to carry out the first review of the financing of subsidised medicines since 1998. The inquiry has also reviewed the national systems for pricing and reimbursement of pharmaceuticals. The main goal of the investigation was to find a long-term sustainable system for financing, pricing and reimbursement of medicinal products. The full investigation was reported to the Swedish government in January 2019. The inquiry's findings include the presentation of several proposals for major changes in the allocation of responsibilities between the state, the county councils and regions in relation to funding, subsidy and pricing of medicines, in general resulting in increased financing and cost responsibilities for the county councils and regions. Also among the inquiry's proposals is one for the introduction of a new, regional joint authority, and one for the dismantling of the frameworks for three-party deliberations between the TLV, county councils and pharmaceutical companies. The inquiry also includes proposals for special financing of new, innovative treatments such as cell and gene therapies.

The Swedish government established the public inquiry with the task of investigating and analysing the pharmacy market, with the assistance of the relevant authorities. The main goal of the investigation was to improve safety and quality in the pharmacy market and the intention was to achieve a safer and more effective provision of medicinal products. The inquiry also assessed the potential regulation of pharmacies' trade margin on medicinal products not included in the pharmaceutical benefits scheme. The assignment included, inter alia, analysing the development of the pharmacy market since deregulation, the authorisation requirements for outpatient pharmacy businesses, what changes may be needed to secure adequate availability of pharmacy services across the country, how the legislation governing dose-dispensing pharmacies could be improved and what changes to current legislation these issues may entail. A report relating to safety and quality in the pharmacy market was presented to the government on 9 March 2017. The part of the assignment concerning potential regulation of the trade margin for medicinal products not included in the pharmaceutical benefits scheme was reported to the government on 9 October 2017, and in summary the investigation has proposed that the trade margin should be regulated. The full investigation was reported to the government on 19 June 2018 and the government has since submitted legislative proposals to the Swedish parliament.

There have been several recent and ongoing Swedish government initiatives in the area of eHealth and healthcare information standardisation. For instance, the Swedish parliament passed the new National Medication List Act25 in June 2018 to implement a new national medication register. The Act will enter into effect on 1 June 2020 (in some parts on 1 June 2022). The intention with the national medication list is to improve patient safety by improving the transfer of information on prescribed medicines that has to be shared between healthcare stakeholders, pharmacies and patients. Currently, this information is divided between several different sources and the prerequisites for access to these sources vary. This means, in practice, that stakeholders in healthcare, pharmacies and even patients themselves sometimes do not have access to comprehensive information about a patient's pharmaceutical treatments, which could put the patient's safety at risk.

In 2015, the government commissioned an inquiry to investigate how public funding of privately provided welfare services can be designed to ensure equality, quality, economic efficiency and transparency. A key proposal presented in a report from the inquiry included limiting profits in, for example, privately owned for-profit health and social care businesses by restricting operating profits in relation to the working capital at a rate based on the government borrowing rate plus 7 percentage units. The inquiry and its proposals have been the subject of massive debate in Sweden. In January 2018, the government presented a bill to the parliament, which included the profit limitation proposal with regard to social care services but did not include the healthcare sector. In June 2018, the parliament voted down the bill.


Footnotes

1 Camilla Appelgren and Odd Swarting are partners at Calissendorff Swarting Advokatbyrå.

2 SFS 2015:315.

3 SFS 2015:458.

4 SFS 1993:584.

5 SFS 1993:876.

6 SFS 2004:451.

7 SFS 1988:534.

8 SFS 2003:460.

9 Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, and repealing Directive 95/46/EC (General Data Protection Regulation).

10 SFS 2008:355.

11 SFS 2008:486.

12 SFS 2010:696.

13 LVFS 2009:6.

14 SFS 2009:366.

15 SFS 2009:659.

16 SFS 1968:64.

17 SFS 1992:860.

18 SFS 2002:160.

19 SFS 1971:291.

20 SFS 1996:799.

21 SFS 1992:18.

22 SFS 1972:207.

23 SFS 2010:659.

24 SFS 2008:579.

25 SFS 2018:1212.