Residents spend $526 per person per year on medicines in Luxembourg, slightly less than the OECD average of $571. In 85% of cases, these expenses are covered by health insurance, which makes them almost painless for patients. This adds up to $250m in 2020 for pharmaceuticals reimbursed under the health insurance scheme.
In the Greater Region, it is in France that the price of medication is statistically the most advantageous, . The latter has analysed the market and issued a series of recommendations to boost competition in this sector.
1. Review the maximum price system
The maximum prices set by the Ministry of Social Security are still followed in Luxembourg, which turns them into fixed prices and excludes any possibility of competition, the report says. The report calls for an end to this price ceiling for over-the-counter medicines, which is conditional on the opening of the pharmacy monopoly for distribution.
2. Prefer France to Belgium
80% of medicines sold in Luxembourg come from Belgium. However, the price of originator drugs (non-generic) is 10% higher than the median price according to data from the Medbelle company dating from 2019. Out of a sample of 25 prescription drugs, 16 are cheaper in France than in Luxembourg, compared to only two in Belgium. For over-the-counter products, nine of the 10 references considered were cheaper in the other country. In all scenarios, they are the most expensive in Germany. For the Competition Council, sourcing via France would reduce prices.
3. Encouraging generic drugs
Generic medication accounts for only 12% of the total volume of medicines in Luxembourg, compared with 30% in France, 35% in Belgium and 83% in Germany. Generic drugs could nevertheless reduce social security expenditure and ease the problem of delivery shortages. This is why the Competition Council advocates their promotion.
4. Creating a database to combat stock-outs
The bill is currently before the Chamber of Deputies, but the Competition Council insists that creating a centralised database as part of the remit of the Luxembourg Agency for Medicines and Health Products would help to contain the proliferation of stock-outs of medicines.
5. Facilitating the opening of new pharmacies
While the resident and cross-border population in Luxembourg has grown by 80% in 25 years, the number of pharmacies has only increased by 29%. This is due to the legal system of concessions, which requires government authorisation for each new pharmacy opening. The Competition Council considers that "the number of concessions created each year is insufficient" and calls for the free establishment regime as well as the abolition of the 2% concession fee.
6. Relaxing monopolies around retail
In Luxembourg, only a pharmacist can own a pharmacy. This is called pharmacy monopoly. Together with the dispensing monopoly, i.e. only pharmacies can sell medicines, this limits the growth of the number of pharmacies already affected by the shortage of concessions. The Competition Council advocates that both monopolies be opened up--at least partially--so that companies can own and operate pharmacies, and that the sale of non-prescription drugs can take place in establishments other than pharmacies, under the supervision of a qualified pharmacist.
7. Facilitating online sales
Legal barriers also affect the development of online sales of medicines in Luxembourg. For the Competition Council, other players could enter this market provided that the prices of non-prescription medicines are liberalised.
8. Expanding the tasks of pharmacists
In order to relieve overcrowding in doctors' surgeries but also to increase the versatility and thus the attractiveness of the profession of pharmacist, the Competition Council recommends extending the pharmacist's competences to vaccination, pharmaceutical maintenance, blood pressure measurement, blood sugar measurement, prescription extension and rapid diagnostic tests.
The preparation of this report dates back to 2019 but, due to the health crisis, it was interrupted and then resumed to integrate variables related to the pandemic. This Thursday, the pharmacist union, the Syndicat des Pharmaciens Luxembourgeois (SPL), is expected to examine the Competition Council's report and an official opinion will follow.
"Every medicine sold requires pharmaceutical advice,” commented a pharmacist based in Luxembourg on the opening of the market recommended by the Competition Council. While the professional welcomes certain suggestions such as the extension of pharmacy competences, she also has reservations. "The liberalisation (of the sale of medication, editor's note) may lead to over-consumption, which may have an unhealthy effect on everyone's health.” The pill may well be difficult to swallow in pharmacies.
This story was first published in French on . It has been translated and edited for Delano.