Subsidizing pharmaceutical prescriptions: The experience of Denmark, Finland, Norway and Sweden

In 1980, drug consumption per capita was 455 Swedish crowns (SEK) in Sweden, SEK 452 in Denmark, SEK 384 in Finland and SEK 382 in Norway; actual figures for Denmark, Finland and Norway being converted into Swedish crowns using the mean 1980 exchange rates. To what extent can these differences be explained by differences in the drug reimbursement programmes for these four Nordic countries? For instance, is it the greater generosity of the Swedish system--in Sweden, the share of drug reimbursement expenditures to total drug consumption is 57%, as against 33% in Norway, 38% in Finland and 34% in Denmark--that makes drug consumption per capita so much higher in Sweden? If the demand for drugs were elastic and if all other influencing factors, besides the reimbursement system, were the same in all the four Nordic countries, then a definite conclusion would, obviously, be fairly easy to reach. However, a number of factors do differ: for instance, income per capita, physician remuneration schemes (and, hence, maybe, physician behaviour) and consumer charges for inpatient and outpatient care; and other factors such as morbidity and patterns of illness may differ. A complete analysis has to take all these factors into account. Too many factors seem to vary to make the sole use of cross-section data meaningful in this case. Time-series data are available and will be used in future analyses.