Ratiopharm in Sweden: Exploiting Electronics

October 2002 brought good news for Swedish generics firms—the advent of a generic substitution list. Even though Sweden, as a relatively high priced market, offers ample opportunities for generics companies to undercut branded manufacturers, penetration there has remained relatively low because only doctors could substitute a generic for a branded drug. That didn't happen very much because doctors had no direct incentive to do so. But now pharmacists can automatically fill branded prescriptions with a cheaper equivalent from the substitution list unless the doctor explicitly forbids it, just as recently became the case in Germany. (See "Generics in Germany: Aut idem Outrage," In Vivo Europe Rx, July/August 2002 [A#2002600021].)

But the new process has its glitches. A generics company first seeks approval for a product from the Swedish Medical...