Can a dollar billionaire reshape the Swedish pharmacy market and push medicine prices down by opening a charitable pharmacy? This is the central question in a new legal study by Nick Dimitrievski, Senior Lecturer in Tax Law at the School of Business, Economics and Law.
Dimitrievski has examined how medicine prices are set in Sweden. The key issue is the trade margin — the compensation pharmacies receive for selling medicines within the pharmaceutical benefits scheme. His conclusion is unexpected:
– Pharmacies’ profitability resembles that of grocery retail, even though food is sold on a completely free market while pharmacies operate under strict regulation, says Dimitrievski.
Why is this a problem?
– The regulation does not clearly follow what legislation and EU directives require — that patients’ and consumers’ interests should be central. In practice, today’s pricing is shaped more by the needs of pharmacies than those of patients, Dimitrievski explains. The rules are also difficult to navigate, scattered across laws and agency regulations.
To test the limits of the system, Dimitrievski constructs a fictional dollar billionaire who launches Grandien Charitable Pharmacy Ltd. The idea is to sell medicines at lower prices, financed through a foundation. Surprisingly, his analysis shows that nothing in current legislation prohibits such a philanthropic pharmacy.
– The case combines business logic and philanthropy: the operation is run professionally, but the goal is societal benefit and lower prices, says Dimitrievski. The disruption lies in the pricing — not in the technology. However, such a project requires significant capital and patience. It is not something an ordinary entrepreneur could do.
A broader societal backdrop
Dimitrievski situates his study within a larger societal shift. Sweden in 2025 is not Sweden in 1995. The public sector is gradually retreating from parts of the welfare system, while philanthropy and nonprofit actors have not yet assumed the prominent role they have in, for example, the United States.
– There are wealthy Swedes who want to contribute, Dimitrievski notes. But Sweden lacks the infrastructure for philanthropy, and few role models step forward. My fictional billionaire is therefore also a symbol — a call for the mecenats of our time.
A methodological shift within legal research
Dimitrievski argues that legal scholarship sometimes becomes too focused on paragraphs and doctrinal analysis. His case study demonstrates how law can be combined with social‑science perspectives to better understand how the welfare state is changing.
– The study is intended as a preliminary investigation. It identifies several areas where further research is needed, including:
- Licensing processes for new types of actors
- The interaction between the regulatory frameworks of TLV and the Medical Products Agency
- The significance of tax rules for philanthropic enterprises
Tax law already offers a strong knowledge base, particularly regarding how regulatory frameworks function in practice. Closer collaboration between researchers and government agencies — for example through doctoral researchers embedded in public authorities or companies — could deepen understanding further.
– Questions about withdrawal taxation were not included in the article, but they may prove crucial for determining whether a charitable pharmacy is feasible, Dimitrievski explains. This issue is now being examined in a separate research project.
Summary
The study challenges established assumptions about the pharmacy market. According to Dimitrievski:
- Today’s regulation benefits pharmacies more than patients
- Pricing mechanisms are poorly explained and difficult to access
- A charitable pharmacy could in fact be legal
- Sweden is moving toward a welfare model where philanthropy plays a growing role
And most importantly:
– A single actor with substantial capital could — at least in theory — drive prices down and make a real difference, says Dimitrievski.
Further reading
