According to a Joint Nordic Report on online pharmacy markets in the Nordics published by the Nordic Competition authorities on 14 April 2021, the level of development and size of the online pharmacy market varies among the Nordic countries, depending on the stringency of regulation. The report describes the current state of the online pharmacy markets in the Nordic countries, the main challenges observed in these markets and potential ways to improve conditions in the market to serve customers better.

Pursuant to the report, the Covid-19 pandemic has led to a significant increase in demand for online commerce, and pharmaceutical products are not an exception. Consumers prefer online pharmacies due to the possibility to maintain social distance and having their orders delivered to their home. It is likely that this has changed preferences for many consumers permanently and demand for online services of pharmacies is expected to remain at a high level in the future.

The Nordic competition authorities advocate the development of the online market. For instance, regulatory reforms regarding market entry, ownership of pharmacies and price regulation would be needed in order to realize the benefits of online pharmacies. The strict regulation concerning market structure has been in place to ensure the safety, accessibility and affordability of medicines, but it has also clearly limited competition in the pharmacy sector. In reforms to the current regulation, a balance between protecting the customers’ health and privacy on one hand and promoting innovation and effective competition on the other should be strived for.

The main competition concerns identified relate to the question whether and how online pharmacies can affect vertical distribution chains in the pharmaceutical industry and the technological solutions of e-commerce platforms. In addition, the influence that online platforms may have on the products listings and promoting some products over others raises concerns. Potential benefits of competition in regards of online pharmacies are, according to the report, price competition if permitted by regulation, increased accessibility to pharmacy services for instance in rural areas, anonymity when consulting the pharmacy for advice and the promotion of communication among pharmacists, physicians, and consumers.

Deregulation of pharmacy market and consequently level of market liberalization differs greatly among the Nordic countries. The markets are the furthest liberalized in Sweden and Denmark. In Finland, the pharmacy market has traditionally been subject to stringent regulation, which poses challenges for the development of the online pharmacy market, for which there is currently high demand. It is evident that Finland lags behind many of its Nordic peers in terms of the pharmacy market liberalization and therefore online operations form a very small part of the overall pharmacy operations. Finland is accompanied by Iceland when it comes to slow development of the online pharmacy market. In both countries, for example, the license to operate online pharmacy operations is tied to the physical pharmacies and, thus, online-only pharmacies without any ties to a physical pharmacy are not permitted. This automatically limits the number of competitors on the market as well as volume of products sold online.

A deregulation in regards of who can own and operate a pharmacy (currently pharmacy ownerships are restricted to pharmacists), opening the pharmacy license system, allowing online-only pharmacies, and allowing non-pharmacy sales and price competition could enhance the development of the online pharmacy sector in Finland.

The Finnish Competition and Consumer Authority (the FCCA) has also previously considered the competition issues relating to the specifics of the strictly regulated pharmacy market. In its report titled Apteekkimarkkinoiden kehittäminen, published in 2020, the FCCA supported very similar reforms that have now been brough up in the Joint Nordic report. While the safety, accessibility, and affordability of medical products need to be ensured, the regulation should not, according to the Nordic competition authorities, be an obstacle for the development of online pharmacy operations.

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