CEO of Online Pharmacy Questions State-Run Pharmacies

The Swedish pharmacy market has been deregulated for over 15 years, but the state still operates Apoteket AB. Now, serious criticism is being directed at the system by competitor MEDS, which argues that state support and Apoteket’s special position distort competition.

One of the most debated issues concerns the so-called rural grant. Pharmacies located more than 20 kilometers from the nearest retail pharmacy can receive financial support to maintain operations.

MEDS CEO Björn Thorngren believes the system is problematic because online pharmacies cannot access this support, even though they also deliver medications to customers in rural areas. According to him, it is more expensive to deliver to certain parts of the country, while there is no competition-neutral way for online operators to receive compensation.

Thorngren is also critical of the discussions around targeted support for pharmacies in socioeconomically disadvantaged areas. Apoteket’s CEO Rasmus Nerman has previously pointed out that lower purchasing power and higher costs—such as for security and staffing—make it harder to keep operations sustainable in some areas.

According to Thorngren, such solutions risk creating a system where the state gradually compensates individual players for various types of costs. At the same time, he argues that the fundamental issue lies in the compensation pharmacies receive for prescription drugs, which is regulated through the so-called retail margin.

Meanwhile, competition has changed the way Swedes purchase medicine. Online pharmacies have grown, and an increasing portion of sales now takes place online. Thorngren therefore believes that online pharmacies will play an even more important role going forward—even if physical pharmacies will continue to exist.

Deregulated in 2009

The Swedish pharmacy market was deregulated in 2009 when the former state monopoly ended. According to the Swedish Competition Authority, the reform has led to, among other things, more pharmacies and longer opening hours. Despite this, MEDS questions why the state still needs to be a player in a market that is already competitive.

– If it is a well-functioning deregulated market, then we have no need for a state player, says Björn Thorngren to Tidningen Näringslivet.

MEDS has also appealed to the Swedish Competition Authority and asked the agency to review Apoteket’s e-commerce operations. The company claims that a private competitor will have difficulty competing in the long term with a state-owned company that does not face the same profitability requirements.

Apoteket has stated that the company does not wish to comment on the matter as it is the subject of an ongoing regulatory review.