In order to place a generic drug on the market in Sweden, it must first be approved by the Swedish Medical Products Agency (the “SMPA”) or the European Medicines Agency, as the case may be. Following approval, the Pharmaceutical Benefits Board (“PBB”) will determine whether the generic will be included in the Pharmaceutical Benefits Scheme (“PBS”) and thus be subsidised by the Swedish state.

As a general principle, if a drug covered by the PBS has been prescribed but there is one (or more) less expensive, substitutable drug available, then the drug shall be substituted with the least expensive substitutable drug available. A drug will not be substitutable if it differs from the reference drug to such an extent that it cannot be considered equivalent. The issue whether a generic drug is interchangeable with a specific reference drug is decided by the SMPA.

A dispute between a Swedish producer of a reference drug and the SMPA arose when the SMPA decided that a previously approved generic drug was considered to be interchangeable with the producer’s reference drug. The producer of the reference drug claimed that the drug should not be considered interchangeable due to, inter alia, an alleged discrepancy in the safety profile between the reference drug and the generic. Furthermore, the producer also claimed that the SMPA’s initial decision to grant a marketing authorisation for the generic was based on insufficient evidence and therefore the SMPA had failed to ensure that the matter was thoroughly investigated. The SMPA argued that the facts on which the decision to grant the marketing authorisation were based were not relevant to the dispute regarding the products’ interchangeability.

In the judgment (case no. 8075-05) delivered on 16 February 2007, the Swedish Administrative Court of Appeal held that even though the court is unable to overturn (in the case on interchangeability) the SMPA’s decision to grant the marketing authorisation, the court is responsible for examining all objections raised in the trial regarding the products’ interchangeability. However, the court reached the conclusion that the drugs were de facto substitutable. The reference producer’s action was therefore dismissed.

Whilst this judgment is unlikely to significantly affect pharmaceutical producers’ activities, it clearly shows that there are several ways for a producer of a reference drug to interfere with the marketing approval of competing generics.