Updated/posted: December 2015
Validated by: Finn Børlum Kristensen, MD, PhD, Secretariat Director, EUnetHTA

Denmark map

BACKGROUND

The Danish health care system is primarily public and is governed by a combination of national state institutions, regions, and municipalities. All three levels have democratically elected assemblies and there is a tradition of decentralization of management and planning in the regions and local municipalities. National-level institutions include the Parliament, the Government, and various state agencies. The state level is responsible for setting the overall legal framework for health care and for coordinating and supervising the regional and municipal delivery of services. Five regions are responsible for delivering both primary and secondary health services. Most hospitals are owned and operated by the regions, and hospital doctors are salaried employees of the regions. Practicing specialists, including general practitioners, are privately employed, rather than publicly employed practitioners, and receive almost all of their income from services paid by the regions. The 98 municipalities at the local level have the responsibility regarding home care and nursing homes, general prevention, and health promotion as well as rehabilitation care outside hospitals.

The total public health care expenses in Denmark were 102,569 billion DKK in the year 2014 [1]. Pharmaceutical expenditure constituted 12.4% as share of regional health care expenses in 2014 [2].

The public expenditures for health care are financed through taxes, primarily by a special national health care tax. According to the National Health Act the regions offer totally or partial coverage of the expenditures for treatment by general practitioners, specialists, dentists, physiotherapists, etc., as well as the reimbursement of pharmaceutical treatment. All inhabitants in Denmark are covered by the Health Act’s provisions.

All Danish citizens are covered by a national health insurance. Here, citizens can choose either to be members of “Group 1” or “Group 2”. Approximately 97% of citizens have chosen to be “Group 1 members”, who are on the list of a general practitioner (GP) and need a referral from this GP in order to visit a practicing specialist. Both visits to GPs and practicing specialists are free of charge for these patients. Less than 3% have chosen to be “Group 2 members”, who are free to choose any GP and may visit a practicing specialist without referral from a GP. However, the regions only cover part of the costs for Group 2 members.

There is no difference between the two groups with regard to the reimbursement of pharmaceuticals. Citizens may take out insurance with private insurance companies and thus obtain further reimbursement of medical expenses e.g. pharmaceutical expenditures and dental care. Health Insurance “Denmark” is the only major private (non-profit) health insurance company in Denmark (2.3 million members), but the private sector is growing especially due to collective arrangements within the labor market [3, 4].

» TO TOP

DECISION MAKERS AND INFLUENCERS

At the national level the main decision makers are the Ministry of Health, the Danish Health Authority, the Danish Medicines Agency, and of course the Danish Parliament who establish the framework for the pharmaceutical system. At the regional level, the reimbursement of pharmaceuticals is financed through nationally paid taxes, while at local level the municipalities run a supplementary reimbursement system based on social indications. The main players in the Danish pharmaceutical system are the doctors, patients, industry, and pharmacies. Most patient associations are organized within the umbrella organization, “Danske Patienter” (Danish Patients), representing a total of 870,000 members and represents almost all patient interests [5]. Also the Danish Consumer Council (Forbrugerrådet), a body independent of public authorities and commercial interests, represents the interests of patients and consumers in general. Please find a detailed description of the most important decision makers and influencers below:

The Ministry of Health is responsible for setting the overall framework for the pharmaceutical system – hereunder for the approval of pharmaceuticals and pharmacy sector and the responsibility for making the legislation concerning the reimbursement system. Once a year the ministry announces reimbursement limits valid for the following year.

The Danish Health Authority: On October 8, 2015, The Danish Health and Medicines Authority was split into three separate boards namely, The Danish Health Authority, The Danish Medicines Agency, and the Danish Patient Safety Authority. The newly formed boards are state-level entities sorted under the Ministry of Health. The following will be focused on the Danish Health Authority and the Danish Medicines Agency. These two boards are responsible for monitoring the health care system and its actors and activities. It is also responsible for advising the Minister of Health on health issues, controlling pharmaceuticals and companies, and monitoring the economic use and consumption of pharmaceuticals. The two boards consist of 8 divisions:

  • Hospital Services & Emergency Management: is responsible for health sector planning and for the national action plans regarding major diseases.
    • Institute for Rational Pharmacotherapy (IRF) a department within the Hospital Services & Emergency Management division. It provides information and independent advice on the most rational use of current and future medicinal products with respect to both pharmacological and economical aspects. This information is directed towards both primary and hospital care and is provided to all medical doctors in Denmark. Secondary target groups are other professionals in the health sector and consumers of medicine. It is uncertain if IRF will become part of the Danish Medicines Agency after the restructure in October 2015.
  • Disease Prevention & Local Health Services: is responsible for carrying out a number of tasks regarding public health, general disease prevention, and tasks linked to the local health services available (such as general practice). 
  • Elderly and Dementia: is responsible for carrying out a number of tasks around the elderly and those with dementia
  • National Institute of Radiation Protection: is responsible for all regulatory functions related to radiation protection.
  • Pharmacies and Reimbursement: is responsible for the regulation of the pharmacy sector and assessment of reimbursement applications. The division also serves as a secretariat to the Reimbursement Committee.
  • Medicines Licensing & Availability: is responsible for handling the regulatory tasks and produces information regarding medicines, e.g. maintaining the official list of medicine prices, available at www.medicinpriser.dk.
  • Pharmacovigilance & Medical Devices: is responsible for managing reported side effects and making analyses and causality assessments.
  • Medicines Control and Inspections: is responsible for monitoring of medical products

The Regions are the regional authorities; their main responsibility is controlling and managing the hospital sector, including deciding which pharmaceuticals to use and which new medical treatments to implement in the hospital sector. The regions buy pharmaceuticals for all hospitals through a centralized system, using Amgros as a purchaser, and they also fund the reimbursement of pharmaceuticals in the primary care sector. The regions thereby act as a third-party payer.

Amgros’s main task is to negotiate prices and purchase pharmaceuticals on behalf of the five regions. Today Amgros purchases 99 percent of the pharmaceuticals used in public hospitals [6].

Coordination Council for Placing in Service of Hospital Medicine (KRIS) coordinates the use of new hospital medicine across regions and hospitals – the focus is especially on cancer medicine. The council decides which newly approved medicines to use as standard treatments in the hospitals.

The Danish Council for the Use of Expensive Hospital Medicine (RADS) was established by the Regions in October 2009. The council makes recommendations to the regions in regards to the use of medicine presenting as a major cost item; medicines with large economic growth potentials, new medicines with high expense costs, and areas where a common regional consensus is needed. The council was established as an attempt to standardize the use of expensive hospital medicines in regions and hospitals, and thereby creating the potential for better prices through Amgros. RADS consist of 16 members, representing the regions, the Danish Health Authority and the Danish Medicines Agency, Danish Society for Clinical Pharmacology, Danish Patients (“Danske Patienter”), and Amgros.

The Reimbursement Committee's (MTN) advises the Danish Medicines Agency in cases regarding the reimbursement of prescription medicines (both general and individual reimbursement). The Committee has up to 7 members who are appointed by the Danish Minister of Health. Of these members, two must be general practitioners and another member is appointed as a recommendation from the Regions’ Board for Wages and Tariffs. The members are appointed for four years.

The Danish Pharmacovigilance Council provides advice to the Danish Medicines Agency in regards to adverse reactions and other risks associated with medicines. It makes recommendations to the Agency on improving the prevention of medical errors, monitoring adverse reactions, and improving the information available for patients about their medications and side effects. The council therefore contributes to the improvement of the quality of pharmacovigilance and fostering dialogue between patients, health care professionals, and authorities. The council is appointed by the Danish Medicines Agency for 4 year terms and consists of a maximum 11 members, who represent the authorities, industry, patients, physicians, and pharmacists [4].

The Medical Products Committee is responsible for providing advice to the Danish Medicines Agency about marketing authorizations, clinical trial testing of pharmaceutical products, and evaluating the risk-benefit balance of the medical products. The committee consists of a maximum of 15 members, appointed by the Minster of Health for a four year period. Two of the members must represent patient and consumer interests.

The Danish Association of the Pharmaceutical Industry (LIF), the Danish Generic Medicines Industry Association (IGL) and the Danish Association of Parallel Importers of Pharmaceuticals (PFL) are sometimes used by the Ministry of Health and the Danish Medicines Authority as experts and advisory bodies in matters related to the industry.

» TO TOP

DECISION MAKERS IN THE DANISH HEALTH CARE SYSTEM

Decision Makers - Danish Healthcare System

Model description and symbols:
The ultimate decision maker is listed at the top of the diagram
White boxes: Decision makers in the Danish health care system
Blue circles: Advisory agents with influence on decision making

Figure 1.

» TO TOP

DECISION-MAKING PROCESS

Regulatory Process
The pharmaceutical area is strictly regulated in Denmark as it is in other countries. Marketing authorization is regulated according to European Union (EU) regulation by the European Medicines Agency and does not differ in Denmark from that of other European countries. The pharmaceutical companies only need to inform the Danish Medicines Agency about the pharmacy purchasing price (PPP) before they enter the market. Pricing and reimbursement issues are, however, a matter of national competency

Reimbursement
The Danish Medicines Agency decides the reimbursement status of each pharmaceutical product. It is responsible for legislation concerning pharmaceuticals, medical devices, and clinical trials. It is also responsible for deciding which drugs should be reimbursed and which licensing companies produce and distribute pharmaceuticals.

The pharmaceutical company files an application for reimbursement for a specific drug to the Danish Medicines Agency. The application is then evaluated by the Pharmacies and Reimbursement department in the Danish Medicines Agency. The process of evaluation is based on recommendations from the Reimbursement Committee.

The medicine’s therapeutic effect, value added, and side effects are factors taken into account when deciding on reimbursement. Price comparisons and economic evaluations also form part of the decision-making process. In general, reimbursement is granted for drugs that have a definite and valuable therapeutic effect and when they are used for a well-defined indication. The former Danish Health and Medicines Agency issued a guideline for pharmacoeconomic analysis in relation to reimbursement. It is, however, still voluntary for the applicants to enclose a pharmacoeconomic analysis to the application. The guidelines include requirement for the pharmacoeconomic analysis to follow a standardized structure and that all references are enclosed. [5]

Reimbursement for an individual medicine is based on its main indication; however, other secondary indications may also warrant reimbursement.

TRADE CHANNELS FOR MARKET ENTRY

PHARMACEUTICAL FLOW DIAGRAM: 

Pharmaceutical Fole Diagram

Model description and symbols:
White boxes: Stakeholders in the pharmaceutical flow
Grey circles: Describes the supply period
Blue boxes: Describes the financing of the medicine

Figure 2.

In Denmark, pharmaceuticals are distributed through two different channels; one to the hospital sector and one to the primary sector.

In the hospital sector, RADS advises the Danish regions in regards to the use of expensive medicine. Based on applications from the regions, the scientific societies, and the Danish Multidisciplinary Cancer Groups, KRIS decides which newly approved cancer medicine is used as standard treatment in the hospitals. At the request of the Regions, KRIS can also coordinate the use of other types of medicines.

In the hospital sector, tendering and procurement is mostly managed by Amgros. Amgros negotiates prices and purchases pharmaceuticals on behalf of the regions, one year at a time.

Consequently, there is a one-year-supply of medication available. Patients admitted to the hospital receive drugs from the hospital pharmacies free of charge, as it is financed by the regions.

In regards to medicines in the primary sector (see Figure 1), the Reimbursement Committee advises the Danish Medicines Agency before they make any decision on whether or not a particular drug should be reimbursed. According to S. 143 of the National Health Act, the regions are required to provide reimbursement for the purchase of medicinal products for which the Danish Medicines Agency has granted reimbursement [7].

In the primary sector, the medicines are distributed from the pharmaceutical industry to private pharmacies, retail shops, and web-based pharmacies by two wholesalers – Nomeco and Tjellessen Max Jenne (see Figure 2). The pharmaceutical companies can change the price for their products every second Monday, consequently there is then a 14 days’ supply available. The patients buy the prescribed drug from the pharmacies and the reimbursement is financed by the regions according to specific reimbursement rules.

The amount of reimbursement a patient receives depends upon their accumulated pharmaceutical expenses during a 12 month period (January-December). For pharmaceutical expenses:

  • Below 925 Danish krone (DKK) the reimbursement rate is 0%
  • Between 925 DKK and 1515 DKK the  rate is 50%
  • Between 1515 DKK and 3280 DKK the rate is 75%
  • Above 3280 DKK the reimbursement rate is 85%
  • More than 3830 DKK, the patient can apply for 100% reimbursement for the rest of the year [8].

Since April 2005, the reimbursement price is calculated according to the least expensive generic product. This means that patients who do not choose the cheapest generic product will be reimbursed for a lower price than the price they actually pay. Please note that the amounts are adjusted yearly and the rates listed above are from 2015.

For pharmaceutical products without general reimbursement, an individually based subsidy may be obtainable by submitting an application, through the patient’s physician, to the Danish Medicines Agency.

Furthermore, it is possible for a patient to apply for social subsidies for medicines from the individual’s residing municipality.

Non-prescription drugs may be included in the list of reimbursable pharmaceuticals, but in such cases reimbursement is only granted to pensioners and patients suffering from a chronic illness that requires continuous treatment with the drug. A prescription would also have to be issued for the pharmaceutical in question. Even if a drug meets the criteria for reimbursement, certain characteristics of the pharmaceutical, its specific use or the way in which it is prescribed, may lead to a non-reimbursement decision.

Pricing
Denmark is market oriented in regard to the regulation of pricing. In Denmark, pharmaceutical companies do not have to apply for permission to set their prices, there is no special regulation for selling prices, and there are no rules to comply with. The marketing of a pharmaceutical in Denmark only requires that the company notifies the Danish Health and Medicines Agency of the pharmacy purchasing price (PPP). This notified price is used when the authorities calculate the consumer price, and it is used in connection with the wholesalers’ resale to the pharmacies. In the primary sector, companies can change prices fortnightly (every second Monday).

Nevertheless, pricing is an important issue – and actually it is not as free as it seems. Since the mid-1990s, a number of different temporary arrangements have in fact put restrictions on manufacturers’ and importers’ prices of pharmaceuticals in Denmark.

Currently the pricing of products is restricted by an agreement between the Danish Association of the Pharmaceutical Industry (Lif) and the Danish Ministry of Health, which introduced a cap on medicine prices. According to the agreement, prescription drug prices in Denmark are not allowed to rise until July 2016. This agreement is an extension of the price-cap agreement in 2012, which were already in effect. Under the agreement, prices cannot exceed the individual pack prices that were in effect on August 30, 2006, with the following adjustments of the agreement made in 2008. A 1.5% increase was allowed in April 2013, and a further 1.5% in April 2014. All pharmaceutical companies that are member of Lif are obligated to follow this agreement.

There are currently no restrictions on the pricing of over-the-counter (OTC) products, neither on the pharmacy-only products nor the products which can be sold outside pharmacies. For the out-of pharmacy OTC products, companies are not even required to notify a price to the Danish Medicines Agency.

» TO TOP

Data requirements

The voluntary guidelines issued by the former Danish Health and Medicines Agency include requirements for the pharmacoeconomic analysis to follow a standardized structure. All references are enclosed. [5]

Health Technology Assessment (HTA)
In Denmark, HTA is decentralized. This corresponds with the national strategy for HTA, which explicitly states that HTA should be applied to all levels of health services as a systematic process in planning and operational policy, and as an underlying process for the routine clinical decisions of health professionals. The purpose of HTA is to obtain a relevant basis for decision making – from policy level to clinical practice – regarding the use of new technologies in the health system. Decisions for the general use of technologies in the health system should be made with systematic, adequate, and well-documented information.

Staff at all levels of the health service is responsible for identifying and drawing attention to areas where HTA is needed. This responsibility includes the need for new technology assessments, as well as the evaluation of existing technologies. In areas where a national intervention is necessary, HTA projects are undertaken as a basis for planning and operational decision making. Implementation of independent national projects should take place in cooperation with research councils, health authorities, and professional organizations.

In recent years, there has been a gradual change from HTA being performed at national level by the former Danish Health and Medicines Authority to the HTA mainly being conducted at regional level. This change has led to a closure of The Danish Centre for Health Technology Assessment department in the Danish Health and Medicines Agency in 2011.

There is no regulatory mechanism in the Danish health service requiring the use of HTA in policy decisions, planning, or administrative procedures. At the national level, a number of comprehensive assessments of health technology have formed the basis for health policy decisions. However, the conclusions of HTA are often disregarded due to political or a health professional’s priorities. A major concern about HTA is that the assessments are time consuming and thorough tasks. This can be difficult to fit into a short-term political process which often demands quick decisions.

» TO TOP

ACRONYMS

Danske Patienter: Danish Patients
Danske Regioner: The Danish Regions
DKK: Danish Krone
EU: European Union
EMA: European Medicines Agency
EUnetHTA: European Network for Health Technology Assessment
Forbrugerrådet: Danish Consumer Council
GP: general practitioner
HTA: health technology assessment
IGL: Danish Generic Medicines Industry Association
IRF: Institute for Rational Pharmacotherapy
KL (Kommunernes Landsforening): The National Association of Local Municipalities
KRIS: Coordination Council for placing in service of hospital medicine
Lægemiddelstyrelsen: Danish Medicines Agency
LIF: The Danish Association of the Pharmaceutical Industry
Sundheds- og Ældreministeriet: Ministry of Health and the Elderly (Ministry of Health)
MTN: The Reimbursement Committee
OTC: Over-the-Counter
PFL: Danish Association of Parallel Importers of Pharmaceuticals
PPP: pharmacy purchasing price
RADS: The Danish Council for the Use of Expensive Hospital Medicine
SST (Sundhedsstyrelsen): The Danish Health Authority

SUGGESTED READING

  1. PPRI - Pharmaceutical Pricing and Reimbursement Information, Denmark Pharma Profile, February 2008. Available from: http://ppri.oebig.at/index.aspx?Navigation=r|2|1
  2. Danish Medicines Agency. Reimbursement. Available from: https://sundhedsstyrelsen.dk/en/medicines/reimbursement
  3. LIF - The Danish Association of the Pharmaceutical Industry. Pricing and Reimbursement in Denmark. May 2007. Available from: http://parno1.ipapercms.dk/LIF/Notater/PricingandreimbursementinDenmark/
  4. Olejaz M, Juul Nielsen A, Rudkjøbing A, Okkels Birk H, Krasnik A, Hernández-Quevedo C. Denmark: Health system review. Health Systems in Transition, 2012, 14(2):1 – 192. Available from: http://www.euro.who.int/__data/assets/pdf_file/0004/160519/e96442.pdf?ua=1

» TO TOP

USEFUL LINKS

National Information Sources:

International Information Sources:

» TO TOP

REFERENCE

  1. Denmark Statistics. Available from: http://www.statistikbanken.dk/ [Accessed November 24, 2015].
  2. LIF. Available from: http://lif.dk/Fakta/Sider/Medicinudgifternes-udvikling-i-Danmark.aspx [Assessed October 11, 2015]
  3. WWW danmark sygeforsikring (About “denmark”) Available from:  http://www.sygeforsikring.dk/Default.aspx [Accessed October 13, 2014].
  4. Olejaz M, et al. Denmark: Health system review. Health Systems in Transition (2012); 14(2):1 – 192. Available from: http://www.euro.who.int/__data/assets/pdf_file/0004/160519/e96442.pdf?ua=1
  5. The Danish Health and Medicines Agency. Available from: https://sundhedsstyrelsen.dk/da/medicin/tilskud/generelle-tilskud/ansoegning/sundhedsoekonomiske-analyser [Accessed October 11, 2015].
  6. Amgros. Available from: http://www.amgros.dk/en/about-amgros/about-amgros/
    [Accessed November 24, 2015]
  7. The Danish Health and Medicines Agency. Available from: https://sundhedsstyrelsen.dk/en/medicines/reimbursement/legislation [Accessed April 20, 2015]
  8. The Danish Health and Medicines Agency, Reimbursement thresholds. Available from: https://sundhedsstyrelsen.dk/en/medicines/reimbursement/reimbursement-thresholds.aspx [Accessed April 20, 2015]

AUTHORS

Authors:
Samra Skrijelj, BSc, Student, MSc. Public Health, University of Copenhagen, Denmark
Martin Strandberg-Larsen MSc, PhD, MMPI, Director and Head of Global Market Access, H. Lundbeck A/S, Valby, Denmark, and External Lecturer, Centre for Health Economics & Policy (CHEP), Department of Public Health, University of Copenhagen, Denmark

» TO TOP



Global Health Care Systems Main Page