Putting a Price on Life: Approaching a Sustainable Model for Pricing Hospital Medicines in Denmark

Dan Lin Chen & Kasper Simonsen

Student thesis: Master thesis


The subject of medicine pricing has received much attention due to new medicines being introduced at record prices, as well as sudden price hikes of already marketed medicines, challenging medicine budgets across the world. Denmark is no exception, as the costs of sourcing medicines for the Danish public healthcare system have doubled from 2007 to 2017. In light of the recent introduction of the Danish Medicines Council, the objective of this paper is to recommend sustainable policy recommendations on the pricing of hospital medicines in the Danish public healthcare system. This paper takes a holistic approach, considering payer affordability, patient access to medicines and the effects on private pharmaceutical research and development simultaneously. This paper explores the topic through an analysis of the Danish public healthcare system, where five challenges were identified. To solve the challenges, findings from primary research conducted through twenty expert interviews were analyzed, along with an exploration of existing literature on three pricing models: value-based pricing, profit control and external reference pricing. The paper proposes seven specific recommendations based on the three pricing models. While no one model is perfect in insolation, this paper finds value-based pricing to be the most sustainable model, with profit control and external reference pricing only providing some niche uses.

EducationsMSc in Finance and Strategic Management, (Graduate Programme) Final Thesis
Publication date2018
Number of pages152