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- Sweden | 25 July 2020
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Could you start by introducing the business model of Orifarm?
Since its establishment in 1994, Orifarm’s mission has been to challenge the pharmaceutical industry and offer a better deal for healthcare. We operate in two main areas: parallel imports of pharmaceuticals and generic medicines. Through these business segments, we foster competition and provide significant savings for both society and consumers.
Orifarm is among the top five companies in Sweden in terms of revenues. What makes the Swedish pharmaceutical market so important for Orifarm?
In the eight European countries where we operate as a parallel importer, our aim is to play a significant role in the domestic pharma market and eventually become the market leader in this field. Germany is our largest market in terms of turnover, followed by Denmark, where Orifarm was founded. Sweden is also a key revenue driver for us, and we strive to be one of the top players in the country.
Could you explain the key market dynamics in the parallel import business in Sweden?
As a parallel importer, we sell products through three different mechanisms. For patented prescription medicines, pharmacy operators can negotiate a price lower than the list price set by the Dental and Pharmaceutical Benefits Agency (TLV). Pharmacies choose the parallel importer or direct importer with the lowest price. We not only compete on price but also bring value through a broad assortment and better service level. Parallel trade has contributed significantly to the growth of independent pharmacies since the deregulation of the market in 2009.
Before joining Orifarm, you worked for a large Swedish pharmacy chain and as a community pharmacist. How have you leveraged these experiences in your new role?
Coming from the customer side has been advantageous in understanding the needs of pharmacies beyond price. I helped build the parallel import logistics system and pharmacy exchange system for Kronans Apotek, one of Sweden’s largest pharmacy chains. This experience provided insights into the key success factors in procurement and the importance of being a LEAN company.
Regarding generics, Sweden has the second lowest pharmacy prices for generics in Europe after Denmark. How do you successfully compete in this pressurized environment?
Orifarm supports low prices for generics as part of our mission to provide a better deal for healthcare. To succeed in this environment, we continuously optimize our portfolio by monitoring market trends and identifying opportunities. We differentiate ourselves by focusing on niche and specialized generic products, which drive our growth.
The parallel import business is heavily influenced by currency fluctuations. How has the depreciation of the krona impacted your business in Sweden?
Acting swiftly is crucial in response to currency fluctuations. We stop purchasing products that no longer make sense and engage in dialogue with customers to find the optimal balance and demonstrate the increased volume they can receive by lowering the discount.
How does Orifarm ensure the quality and safety of the medicines it imports to the market?
Orifarm takes pride in its extensive quality control system throughout the supply chain. We conduct thorough audits and assess suppliers from which we purchase goods. We closely monitor alerts from the European Medicines Agency (EMA) and other health authorities. We have also adapted our IT structure to meet the requirements of the EU’s Falsified Medicines Directive, gaining an edge over competitors.
Do you feel authorities realize the importance of parallel imports to generate savings for the healthcare system?
Unfortunately, politicians and stakeholders often overlook the contribution of parallel imports in providing direct and indirect savings to the healthcare system. Parallel imports contribute to direct savings for pharmacies and have a significant impact on the overall price level. However, indirect savings are challenging to assess. We believe more.