The Life Sciences Law Review: Finland

Introduction

The Medicines Directive 2001/83/EC has been implemented in Finland, but national requirements that are stricter than the Directive's minimal requirements also exist.

The Finnish Medicines Agency Fimea (Fimea) is the national competent authority for regulating pharmaceuticals and medical devices. Fimea grants, inter alia, marketing authorisations (MAs) and wholesale licences for medicinal products (medicines). Reimbursement of medicines in Finland is subject to reimbursement status and reasonable wholesale prices, which are confirmed by the Pharmaceutical Pricing Board, operating under the Ministry of Social Affairs and Health.

The regulatory regime

The legislation of medicines and medical devices in Finland is harmonised with EU legislation. The national applicable legislation for medicines includes the Medicines Act (395/1987) and the Medicines Decree (693/1987). Additionally, the national codification is supplemented by the regulations and guidance issued by Fimea. Pharma Industry Finland (PIF), an organisation of the innovative pharmaceutical industry, has also issued a Code of Ethics (PIF Code) containing very detailed provisions regarding marketing of medicines, which are binding for members of PIF. The PIF Code is based on medicine, competition and consumer legislation and on the marketing guidelines of the equivalent European and international federations, the European Federation of Pharmaceutical Industries and Associations, and the International Federation of Pharmaceutical Manufacturers and Associations.

The Finnish Medical Devices Act (719/2021), the Finnish Act on Certain Medical Devices regulated under EU Directives (629/2010), and orders issued by the competent authority Fimea, or issued by the former competent authority Valvira, govern medical devices and the marketing of such devices. Regulations EU/2017/745 and EU/2017/746 govern or will govern the medical devices sector after the transitional periods. This chapter reflects the applicable legislation as at the beginning of 2022. Sailab – MedTech Finland, a registered association of health technology suppliers, has issued its own code of ethics, which is based on the MedTech Europe Code of Business and governs, inter alia, the marketing of medical devices.

Generally, the marketing of medicines and medical devices to consumers is also regulated by the Finnish Consumer Protection Act (38/1978) and government decree on Unfair Practices in Marketing and Customer Relations (601/2008).

i Classification

According to the Medicines Act, a medicinal product means a product or substance intended for internal or external use to cure, alleviate or prevent a disease or its symptoms in human beings or animals. Medicinal products are also considered to include substances or combinations of substances, used internally or externally, that can be used to restore, correct or modify the vital functions of human beings or animals through pharmacological, immunological or metabolic influence, or to determine the state of health or the reason for a disease. In ambiguous cases, the provisions of the Medicines Act are primarily applied if no special grounds for other interpretations exist. Such borderline cases have concerned mainly dietary supplements, cosmetic products and medical devices. The definition of medicinal products is rather broad in Finland and may include products that would not be considered medicinal products in some other EU Member States.

Regulation 2017/745 defines a medical device as any instrument, apparatus, appliance, software, implant, reagent, material or other article intended by the manufacturer to be used, alone or in combination, for human beings for one or more of the following specific medical purposes: diagnosis, prevention, monitoring, prediction, prognosis, treatment or alleviation of disease; diagnosis, monitoring, treatment, alleviation of, or compensation for, an injury or disability; investigation, replacement or modification of the anatomy or of a physiological or pathological process or state; providing information by means of in vitro examination of specimens derived from the human body, including organ, blood and tissue donations; and which does not achieve its principal intended action by pharmacological, immunological or metabolic means, in or on the human body, but which may be assisted in its function by such means. Regulation 2017/745 also states that devices for the control or support of conception, and products specifically intended for the cleaning, disinfection or sterilisation of devices for the control or support of conception and for medical devices, accessories for medical devices, and products listed in Annex XVI of the Regulation, also constitute medical devices. Nowadays, a cosmetic product may constitute a medical device without its intended purpose being medical in the event that its risk profile corresponds to that of a medical device. The final assessment is concluded by Fimea, which adheres to a large extent to the European Commission's guidance.

Further, Regulation 2017/746 defines in vitro diagnostic medical devices as any medical device that is a reagent, reagent product, calibrator, control material, kit, instrument, apparatus, piece of equipment, software or system, whether used alone or in combination, intended by the manufacturer to be used in vitro for the examination of specimens, including blood and tissue donations, derived from the human body, solely or principally for the purpose of providing information on one or more of the following: concerning a physiological or pathological process or state; concerning congenital physical or mental impairments; concerning the predisposition to a medical condition or a disease; to determine the safety and compatibility with potential recipients; to predict treatment response or reactions; or to define or monitoring therapeutic measures. Specimen receptacles also constitute in vitro diagnostic medical devices.

ii Non-clinical studies

The Medical Research Act (488/1999) and the Medicines Act together regulate pre-clinical safety tests of medicines, which are subject to an approval granted by Fimea. Fimea's approval may include restrictions or supplementary conditions for laboratories. The tests are also supervised by Fimea.

The Act on the Protection of Animals Used for Scientific or Educational Purposes (497/2013) is applied to the use and breeding of animals for scientific or educational purposes and for the supply of their organs or tissues for scientific or educational purposes. Additionally, the Animal Welfare Act (247/1996) must be complied with. The Gene Technology Act (377/1995) may also be applicable if gene technology is used. Good laboratory practice must be complied with in all non-clinical studies intended to be submitted to a national registration authority for the purpose of registering or licensing substances such as chemicals, medicinal products or cosmetic products.

iii Clinical trials

Legislation on clinical trials has been reformed in Finland, and the new Act on Clinical Research (983/2021) implementing changes necessary because of the EU Regulation 536/2014 (Clinical Trials Regulation) entered into force on 31 January 2022.

The national Act refers in many places directly to the Clinical Trials Regulation; for example, the definition of a clinical trial itself is not defined in the national law. Instead, under the Article 2 of the Regulation, a clinical trial means a clinical study that fulfils any of the following conditions: (1) the assignment of the subject to a particular therapeutic strategy is decided in advance and does not fall within normal clinical practice of the Member State concerned; (2) the decision to prescribe the investigational medicinal products is taken together with the decision to include the subject in the clinical study; or (3) diagnostic or monitoring procedures in addition to normal clinical practice are applied to the subjects.

Additionally, provisions of Chapter 3 of the Medical Research Act, implementing Directive 2000/20/EC, and the Medicines Act's provision on supervision on investigational and ancillary medicinal products and their supervision may be applied together with the EU General Data Protection Regulation, where applicable. Further regulations or guidelines may be issued by Fimea and the National Committee on Medical Research Ethics.

iv Named-patient and compassionate use procedures

For special reasons relating to treatment of an individual patient or to public health, Fimea may grant a temporary authorisation (special authorisation) for releasing a medicinal product, according to Section 21(f) of the Medicines Act, implementing the Medicines Directive's Article 5(1).

Special authorisation must be granted if no other means are available to treat an individual patient or animal or group of animals, or if an available treatment would not yield the desired result. Additionally, special authorisation may be granted when a medicinal product with marketing authorisation is not available to treat a group of patients or the population or to prevent an illness, and there are particularly weighty reasons for granting the authorisation. Special authorisation is subject to any statement issued by the European Medicines Agency's Committee for Medicinal Products for Human Use.

When special authorisation is granted, the supplier is obliged to ensure that the user of the product receives sufficient instructions on the correct and safe use of the product, and storage and other instructions.

The Medical Devices Act also includes a provision regarding temporary authorisations for placing a medical device on the market or taking it into use, which is obtained from Fimea.

v Pre-market clearance

A medicinal product may be sold to the public or otherwise released for consumption only after it has been granted an MA, either nationally by Fimea or by the European Medicines Agency. An MA is valid for five years from being granted and it may be renewed. After the MA is granted, the MA holder must file a notification with Fimea upon the launch of the product. The MA holder also has an obligation to ensure that medicinal products that have been granted an MA are constantly available to medicinal product wholesalers and pharmacies to meet the needs of patients and other users.

Any medical device placed on the Finnish market must comply with the essential requirements of Regulation 2017/745; these requirements and their interpretation can also be defined more precisely by the competent authority.2 Overall, the device must be fit for its intended purpose, achieve the intended performance when used for its intended purpose, and must not endanger the health or safety of the patient, user or other person. The device must also bear the CE marking that indicates conformity with the set requirements.

If a medical device caused or has the potential to cause risk to health (e.g., because of its features, or adverse reactions originating from the device), the professional user of the device must inform Fimea as well as the manufacturer, authorised agent, importer, or distributor of the dangerous situations relating to the device.

vi Regulatory incentives

Finland grants supplementary protection certificates under Council Regulation 1768/92/EEC and the Patent Act (550/1967, as amended) for the first patent covering a new medicinal substance. The relationship between patents and the MA process is clear in Finland, as patents do not have relevance in the MA application process. The Bolar exemption of Directive 2004/27/EC has been implemented in the Finnish Patent Act to cover research activities required for the MA application. Patent exclusivity does not, therefore, cover research activities required for applying for an MA. Finland also grants the data exclusivity protection for medicinal products, and recognises the paediatric investigation plan exemption for paediatric products of Regulations 1901/2006/EC and 1902/2006/EC. If a medicinal product has been accepted for children, the data exclusivity is extended for six months as a main rule. Finland has no specific national legislation concerning orphan medicine products, but Regulation 141/2000/EC is applied, as is the data exclusivity extension of two years under Regulation 1901/2006/EC for orphan medicine products.

vii Post-approval controls

Finnish national legislation has been updated to conform to the Pharmacovigilance Directive 2010/84/EC, and Fimea has issued instructions and guidelines for the national implementation of the Directive.3 The MA holder is obliged to monitor the safety of medicinal products and to take appropriate measures if changes are identified in the benefit–risk analysis commenced by the MA holder. The MA holder is also obliged to keep a record of possible adverse effects and side effects. According to the Medicines Act, the MA holder must report all serious adverse reactions originating in Finland to Fimea. Fimea's task is to supervise all product defect procedures and to ensure that measures taken by the operators are appropriate.

viii Manufacturing controls

The industrial manufacturing of medicinal products requires a licence granted by Fimea, which may have conditions attached. Medicinal products may only be manufactured industrially by medicinal product manufacturers that have acceptable production facilities and equipment for production. A medicinal product manufacturer may have a medicinal product manufactured or controlled in part or entirely by another medicinal product manufacturer if it is required for technical, economic or production-related reasons, provided that the contract manufacturer has an industrial manufacturing licence granted by Fimea. Fimea may issue regulations concerning the procedures to be observed. Detailed requirements for an application are stated in the Medicines Decree.

A manufacturer must also comply with the EU Good Manufacturing Practice Guidelines. Only those active substances that have been manufactured in accordance with these guidelines may be used in the manufacture of medicinal products. Medicinal product manufacturers must also have an accountable director who is primarily responsible for ensuring that manufactured products meet the requirements set for them in the Medicines Act. Additionally, at least one person involved in the manufacturing must meet the qualification requirements set forth in Directives 2001/82/CE, 2001/20/EC and 2001/82/EC.

The manufacturing of medical devices is regulated in a fairly detailed manner to form the basis of Regulation 2017/745. Medical devices are divided into different classes (I, IIa, IIb and III), taking into account the intended purpose of the medical device along with their inherent risks, and different requirements regarding their design, manufacturing and conformity pertain to each class.

ix Advertising and promotion

The marketing of medicinal products is regulated under the Medicines Act and Medicines Decree and the concept of marketing is interpreted expansively. Generally, advertising of medicinal products must encourage people to use the products appropriately and it must not induce people to use products unnecessarily. The marketing information provided has to be accurate; it may not include any obsolete information or omit any essential details. Fimea is the supervising authority for marketing and advertising.

Additionally, general consumer protection legislation is applied when medicinal products are marketed directly to the general public. The marketing of prescription-only medicines must be targeted only at persons entitled to prescribe or dispense the medicine. Voluntary control of pharmaceutical marketing and self-regulation has traditionally been one of the key forms of activity in Finland. Pharmaceutical marketing is covered under the PIF Code and it is controlled by the Supervisory Commission for the Marketing of Medicinal Products, which operates under the PIF. The PIF Code is binding only on members of the PIF, but it may provide evidence of established practices and acceptable conduct.

For medical devices, Regulation 2017/745 prohibits the use of, for example, text, trademarks, and figurative or other signs that may mislead the user or patient with regard to the intended purpose, safety and performance of a medical device, such as (1) by ascribing functions to the device that it does not have; (2) creating a false impression regarding treatment, diagnosis or properties the device does not have; (3) failing to inform the user of likely risks associated with the use of the device in line with its intended purpose; or (4) by suggesting uses for the device other than the intended purpose for which its conformity assessment has been carried out. This prohibition applies to any claims made in the markings of the device, its instructions, making the device available, and its marketing. A similar framework is set under Regulation 2017/746. Further, according to the Medical Devices Act, the manufacturer of the device, the product name of the device notified in conjunction with its registration, as well as the fact that the product contains a conformity (CE) marking must be indicated in marketing, and a device that does not constitute a medical one should not be marketed as such. A similar framework is applied in the Act on Certain Medical Devices regulated under EU Directives.

To the extent that Regulations 2017/745 and 2017/746 are not yet applicable, the marketing rules for medical devices are largely the same as general Finnish marketing legislation, orders and principles, such as the Finnish Consumer Protection Act and the Regulation on unfair practices in marketing and customer relations. The marketing of medical devices is generally allowed, but all marketing activities must be objective and give a truthful and reliable description of the product. The Act on Medical Devices contains a specific provision on marketing. Marketing of medical devices may not be inappropriate, and it may not give an exaggerated or erroneous impression of the device, its effect or use. The marketing of medical devices includes all possible direct or indirect actions that have the purpose of promoting the product and influencing the product's sales. Marketing of medical devices is supervised by Fimea and the Consumer Ombudsman.

Sailab – MedTech Finland ry has accepted a Code of Ethics for medical devices marketing. The Code is based on the MedTech Europe Code of Business Practice. This Code is binding on members of Sailab – MedTech Finland ry, and sanctions may be imposed on members not complying with the Code.

x Distributors and wholesalers

The wholesale of medicinal products, meaning all activities aimed at receiving and forwarding orders for medicinal products, to acquire and keep medicinal products to distribute them and to export medicinal products, is subject to a licence. The licence is granted by Fimea, which may incorporate certain conditions concerning the operations in a licence. To be eligible for a licence, the applicant must be situated in Finland and have proper facilities and equipment for the storage of medicinal products and for ensuring the operations and the personnel required for the operations.

The applicant must also have an accountable director who is responsible for ensuring that the medicinal products sold by the wholesaler meet the requirements set for them in the Medicines Act or in provisions issued pursuant to it. The accountable director is also responsible for ensuring that the wholesaler complies with regulations and guidelines issued on the storage, handling and labelling of medicinal products. The accountable director must have a Master of Pharmacy degree and he or she cannot act simultaneously as an accountable director in any other licensed medicinal product wholesale company.

Medicinal products may be sold or otherwise supplied by the wholesaler to a medicinal product manufacturer, another medicinal product wholesaler, a pharmacy, subsidiary pharmacy, the Military Pharmacy, a hospital pharmacy or dispensary, or to a veterinary surgeon for purposes of veterinary medication. In addition, medicinal products that have not had sales restricted by law or other provisions may be sold or otherwise supplied to retailers of these products. Good medicinal product distribution practice based on the EU provisions must be complied with in all medicinal product wholesaling. Fimea has also issued a regulation regarding good distribution practices.4

The Medical Device Act does not regulate how the distribution of medical devices takes place. Therefore, medical devices can be distributed by different operators, such as pharmacies or other distributors, and the distribution or wholesale of such products is not subject to any licence.

xi Classification of products

Fimea decides the supply classification of a pharmaceutical product (i.e., whether a medicinal product may be sold or otherwise released for consumption only on the basis of a prescription). Fimea may also alter its decision on the basis of new information received about the medicinal product that affects its supply classification. It is possible to apply for new classification of a product with Fimea.

The classification also affects the marketing of medicinal products, because products subject to medical prescription can be marketed solely to individuals authorised to prescribe or dispense medicines. The Medicines Decree defines detailed requirements for such marketing, and the marketing activities may only take place at medical sales representations organised exclusively for such an audience, in expert field publications or via electronic media targeted and directed solely at such an audience.

Medical devices are classified according to Regulation 2017/745 which determines the procedures to be used in verifying that products comply with all applicable requirements.

xii Imports and exports

The import and export of medicines is permitted only under a valid MA. Additionally, if medicinal products are imported to Finland from outside the European Economic Area (EEA), a licence for the industrial manufacture of medicines is required (see Section II.viii on manufacturing controls). A national wholesale licence is mandatory for import and export from inside the EEA.

In general, provisions applicable to the distribution and wholesale of medical devices also apply to the import and export of such products (i.e., imported and exported products must meet the essential requirements and bear the CE mark and then they may be freely imported within the EEA area). The marketing of medical devices in Finland and placing them on the local market is not subject to a sales permit or licence, unlike for medicines, but the manufacturer is responsible for the product's compliance with all essential requirements, those namely set out in Regulation 2017/745. No permit procedures are as such applied, and the manufacturer indicates compliance with all necessary requirements by a mandatory CE mark.

xiii Controlled substances

In general, the production, manufacture, import to the territory of Finland, export from the territory of Finland, transportation, transit through the territory of Finland, distribution, trade, handling, possession and use of drugs is prohibited under the general prohibition of the Narcotics Act (373/2008).

Substances regarded as drugs are listed in Finnish Decree 543/2008, as amended, and in the Government's Decree on Psychoactive Substances Prohibited form the Consumer Market 1130/2014, as amended. Fimea grants authorisations for the manufacture, import into Finland, export from Finland and handling of these substances. The operator will need a handling authorisation for a drug, which may be granted for a certain limited time. According to the Narcotics Act, the operator is also obligated to notify Fimea every year of drugs, substances, amounts, preliminary estimate of demand, etc.

xiv Enforcement

Intentional or negligent violation of provisions of the Medicines Act is punishable by a fine for a medicinal product offence, namely: (1) manufacturing, importing, storing, carrying for sale or supplying medicinal products; (2) neglecting to make a notification, provide information or keep records concerning medicinal products; or (3) failing to comply with a prohibition issued by Fimea.

A medicinal product offence may also be punished under the Finnish Criminal Code (39/1889), in which case the penalty is either a fine or a maximum of one year's imprisonment.

Fimea has the right to prohibit the import, manufacture, distribution, sale or other release for consumption of a medicinal product if conditions for granting the MA or for registration no longer exist, or if the requirements and obligations concerning manufacture or import of the medicinal product are no longer met. Fimea may also revoke, in part or in full, a licence granted for practising the manufacture or wholesaling of medicinal products if any of the requirements for granting the licence are no longer met or if an obligation essential to safety or quality has not been met.

Pricing and reimbursement

The Finnish reimbursement system is a national system that forms a part of the Finnish national health insurance system. The insurance scheme covers all permanent residents of Finland. The reimbursements are made directly to the patient when the medicinal product is sold by the Social Insurance Institution of Finland. There are three types of reimbursement: basic, lower special reimbursement and higher special reimbursement. The special reimbursement categories are set according to the severity of the treated condition and the necessity of the drug treatment, and they are specified by a government regulation. Some medicinal products may also have a restricted eligibility for reimbursement.

According to the Health Insurance Act (1224/2004, as amended), the costs of a medicinal product may be reimbursed only if the valid MA holder has applied for reimbursement and a reasonable wholesale price has been set. The Pharmaceutical Pricing Board, which operates under the Ministry of Social Affairs and Health, confirms the reimbursement status and the reasonable wholesale price. The medicinal product's therapeutic value is taken into consideration in the decision on basic reimbursement status and the assessment is made by overall consideration. If reimbursement status is not sought and no reasonable wholesale price has been confirmed, the pricing may be implemented without any restrictions. Non-prescription medicines can also be reimbursed, provided that the doctor has prescribed the medicine to the patient and the board has confirmed a reasonable wholesale price and the reimbursement for the medicine. The reimbursement status can also be granted on a conditional basis if the pharmaceutical company and the board so agree. The relevant conditions may include an agreement on further evidence provided by the company or on financial credits payable to the Social Insurance Institution of Finland (KELA).

Under the reference price system that applies in Finland, medicinal products are divided into reference groups by substance. Reference prices are determined based on MA holders' price notifications, and prices are updated four times a year. This determined reference price is the highest possible price based on which the reimbursement can be calculated. The price notification is the prerequisite for reimbursement of the products in this system. A generic substitution policy is applicable, whereby if a patient prefers the more expensive medicine prescribed by a doctor, the excess costs are paid by the patient. The patient must also be informed about the lowest-priced prescription medicine at the time when the medicine is collected by him or her from the pharmacy.

As the pricing of medical devices is not regulated in Finland, the pricing is basically free, taking into account, however, general competition law pricing principles. Generally speaking, medical devices are not reimbursed in Finland, except in some very limited cases; for example, when a person has a disability or illness that restricts him or her from undertaking work or study-related tasks. In these limited cases, the costs incurred by the purchase of such assistive devices may be reimbursed.

Administrative and judicial remedies

Decisions made by administrative authorities such as Fimea may be appealed according to the general provisions and principles concerning administrative matters. According to the Act on Administrative proceedings (808/2019), the appeal must be lodged at the administrative court within 30 days of the decision's date of issue. The Supreme Administrative Court is the appellate court for the decisions of the administrative courts. In some cases, a leave of appeal is required.

An appeal regarding an unsatisfactory decision by the Pharmaceuticals Pricing Board can be lodged with the Supreme Administrative Court within 30 days of receiving the decision. Courts have ruled in favour of pharmaceutical companies in many cases but, unfortunately, the appeal process may be rather slow compared to the usual timelines of pharmaceutical pricing.

As a main rule, an administrative appeal has a suspensive effect on the decision. However, there are several exceptions to this rule. For instance, the MA decisions made by Fimea can be implemented even before becoming final, unless the appeal authority orders otherwise.

Financial relationships with prescribers and payers

Financial relationships between prescribers and payers are governed by the Medicines Act, the Medicines Decree and the Criminal Code. According to the Medicines Act, whoever, either intentionally or through negligence, violates the provisions issued in the Medicines Act on the marketing of medicinal products, or asks for, accepts or receives prohibited inducements, benefits or gifts, will be sentenced to pay a fine for a medicinal product offence or, ultimately, the Criminal Code may be applied. Self-regulatory systems such as the PIF Code also include provisions applicable to PIF members regarding appropriate interaction.

In general, the PIF Code prohibits giving promotional gifts related to prescription-only medicines. The distribution and offer of promotional gifts related to the marketing of self-care medicines must also be small in value. The promotional gifts must have only minor economic significance for the recipient, and they must have a bearing on their professional operations. The company must also document and publish all the economic benefits targeted at healthcare organisations or professions according to the PIF Code. The provisions of the Sailab – MedTech Finland Code are much like the PIF Code.

According to the Medicines Act, the MA holder or other party engaging in marketing must also keep available for public review an up-to-date list of all direct and indirect financial and comparable support that they have given to associations in the fields of medicine and healthcare, and to patient organisations.

Special liability or compensation systems

A statutory obligation to compensate for pharmaceutical-related injuries can be based on the Finnish Product Liability Act (694/1990), the Patients Insurance Act (585/1986) and the Damages Act (412/1974). No special legislation on damages caused by medicines or medical devices exists. According to the Product Liability Act, a prerequisite for compensation is that the injury or damage was sustained or incurred because the product was not as safe as could have been expected at the time when the product was put on the market. The injured party shall prove the injury or damage, the defect in the product as well as the causal relationship between the defect and the injury or damage. The legislation is based on Directive 85/374/EEC on liability for defective products. General principles of tort law may also be applicable to pharmaceutical-related injuries – mainly liability owing to negligence.

Finnish Pharmaceutical Injury Insurance is a voluntary and additional insurance policy system founded by members of the pharmaceutical industry and pharmaceutical importers to cover damages caused by pharmaceutical products under the Medicines Act. According to general insurance terms and conditions, pharmaceutical injury refers to any bodily illness or injury or a psychic disease likely to have resulted from a pharmaceutical product taken by the injured party. However, pharmaceutical injuries do not include illnesses or injuries resulting from a pharmaceutical product failing to produce the intended effect or occurring in connection with measures that should not have been taken in view of the intended or recognised effect of the pharmaceutical product concerned. Additionally, pharmaceutical injuries do not include illnesses or injuries resulting from an error in the prescription, and further, compensation is not paid for known side effects of the medication if these were in proportion to the illness being treated in the case of a necessary risk taken in the treatment of a serious illness. Minor damages are not compensated.

The Patient Insurance Act requires that hospitals and clinics acting in Finland have a mandatory patient insurance that covers bodily injuries that have been caused to patients because of healthcare treatment.

Transactional and competition issues

i Competition law

General European competition law principles and legislation are applicable in Finland. There are no recent and relevant enforcement actions or case law regarding the life sciences sector. Patent settlements are conducted in accordance with general EU policies. Patent litigation in the pharmaceutical industry has been active in Finland, and EU-level guidelines and decisions are closely monitored by the local industry.

The Finnish pharmacy system has been a long-term topic of conversation in Finland. The system is not open to free competition because, under the Medicines Act, the operation of a pharmacy business requires a pharmacy licence issued by Fimea. The granting of a licence is subject to a means test based on the size of the population in the area where the pharmacy is located; there are also other aspects that have been seen as competition-restricting by some participants in the discussion. On the other hand, the system is seen to grant sufficient pharmacy services also in the scarcely populated parts of Finland. The Finnish Competition Authority (FCA) drafted a report5 in 2020 regarding the functionality and competition aspects of the system where it recommended, inter alia, abolishing the means test for pharmacy licences and to use a 'minimum criterion'. The report further suggested to waive restrictions on the location and number of pharmacies.

ii Transactional issues

No major transactions have been conducted recently in the pharma sector in Finland. From a legal point of view, competition law must be taken into account regarding possible merger and acquisition activities by major players in the market, and a decision by the FCA may be required. The tax law and practical aspects are also important when planning mergers and acquisitions.

Current developments

An extensive organisational change in healthcare services is under way in Finland. The responsibility for organising social welfare and healthcare services will be moved from municipalities to new larger entities called 'wellbeing services counties' at the beginning of year 2023. The fundamental renewal of the healthcare and social care system has been politically difficult, and many details are still being defined.

The pharmacy system has been a topic of conversation, and a number of changes6 to the Medicines Act may increase competition between pharmacies by facilitating the granting of new pharmacy licences and allowing some restricted price competition between pharmacies for over-the-counter (OTC) medicines. The price regulation of an OTC medicine is changed so that the retail price of an OTC medicine is at most the retail price according to the price list for medicines and at least the nationwide wholesale price. Pharmacies remain relatively small business units subject to a pharmacy licence from Fimea and owned by private persons fulfilling the criteria set forth by Medicines Act, who are personally responsible for maintaining the pharmacy.

The wholesale of medicines is conducted via a single-channel system, in which the distribution of medicines from manufacturer to pharmacies is generally run by wholesale traders based on exclusive agreements between the manufacturers and the wholesale traders. In practice, two major wholesale trade players exist in Finland, and they both have a market share of nearly 50 per cent. This arrangement is, from time to time, under examination and review by the FCA, but so far, it has not been found necessary to intervene in the single-channel system.

Footnotes

1 Hanna Paloheimo is a counsel and Hilma-Karoliina Markkanen is a senior associate at Castrén & Snellman Attorneys Ltd. The authors would like to thank associate Karla Kallela for her contribution and help.

2 Note that Fimea has been the competent authority for the supervision of medical devices from 2020.

3 Fimea's instructions for national implementation of Directive 2010/84/EC and Fimea's guidelines for MA holders regarding national implementation of Directive 2010/48/EC.

4 Fimea's Regulation 1/2019 on Good Distribution Practices.

6 The newly adopted changes enter into force on 1 April 2022.

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