The portion a person pays for a drug decreases depending on how much they have paid for a drug in each 12-month period. There are four payment participation levels that reduce the individual's costs. Only medicines with payment participations are included in the calculation of payment participation steps.
A twelve-month payment period begins with the first purchase of medicine after the previous twelve-month period has ended.
Example: If an individual buys medicine for the first time on April 10, 2024, it ends the 12-month period on April 9, 2025. If he/she next buys medicine with payment participation on 20 May 2025, a new 12-month period will begin ending on 19 May 2026.
The subsidy of Iceland Health is based on the lowest maximum price of generic medicines. If a more expensive drug is chosen, then the individual pays the difference. These costs are not covered by the payment bracket. You can see the price of medicines in lyf.is
The Icelandic Medicines Agency decides which medicines Iceland Health subsidizes.
Note: A change was made on January 1, 2026, adding a fifth tier to the pharmaceutical co-payment system (see the tiers in the Payment steps for the purchase of medicines). In the fifth tier, once medication costs have reached the maximum, i.e., 62,000 ISK for general payers and 41,000 ISK for discount groups, the individual's medication will be fully covered by Iceland Health for the remainder of the period. Payment periods in effect over the turn of the year 2025-2026 will not be adjusted, and individuals will complete them unchanged. However, all those starting a new payment period in 2026 will pay according to the new tier system.
General payment participation of an individual:
Bracket: An individual pays 100% up to ISK 22,800.
Bracket: An individual pays 40% up to ISK 29,680.
Bracket: An individual pays 15% of the price of medicines up to ISK 36,730.
Bracket: An individual pays 7.5% of the price of medicines up to ISK 62,000 (maximum payment).
Step: An individual pays 0% of the price of medicines.
Elderly persons aged 67 years and older, disability pensioners, children and young people under the age of 22
Bracket: An individual pays 100% up to ISK 11,400.
Bracket: An individual pays 40% of the price of medicines up to ISK 16,840.
Bracket: An individual pays 15% of the price of medicines up to ISK 21,640.
Bracket: An individual pays 7.5% of the price of medicines up to ISK 41,000 (maximum payment).
Step: An individual pays 0% of the price of medicines.
The payment brackets only apply to medicines subsidised by Iceland Health (generally or due to a medicine certificate).
From January 1, 2026, cost-sharing for certain medicines will be based on the recommended maximum dose according to the marketing authorization of the medicine in Iceland. If usage exceeds the maximum dose, co-payment will not apply to the portion that exceeds it. The recommended maximum dose according to the marketing authorization is the dose considered both safe and effective based on research and data submitted by the pharmaceutical manufacturer in the marketing authorization application. The recommended doses of medicines can be viewed on the website lyf.is.
If the use of medication is within the recommended maximum dose, co-payment is provided according to the drug co-payment system, but if the use exceeds the maximum dose, co-payment is not provided for the excess dose. When medications are dispensed from pharmacies, the co-payment is calculated based on the individual's status in the drug co-payment system and on previous invoices that have been submitted to Iceland Health. For each dispensing, invoices (medication withdrawals) from the past three months are reviewed. When total use during the period exceeds the maximum dose, co-payment is discontinued and the individual pays out of pocket for the excess dose. Medication use that serves as the basis for assessing whether the maximum dose has been reached during the period starts being counted from January 1, 2026. From April 1, 2026, co-payment will cease for any portion exceeding the recommended maximum dose.
Health insurance receives daily information on payments made by individuals in pharmacies. If an individual has paid too much for medicine or if his/her entitlement status has changed during the 12-month period, the payment status is automatically recalculated once a week.
Refunds are deposited into the individual's bank account and they receive an email notification.
Health insurance receives daily information on payments made by individuals in pharmacies. If an individual has paid too much for medicine or if his/her entitlement status has changed during the 12-month period, the payment status is automatically recalculated once a week.
Refunds are deposited into the individual's bank account and they receive an email notification.
Medicine certificates provide payment participation for medicines that otherwise do not have payment participation. If a doctor believes that an individual fulfils the requirements according to current work rules, he/she can apply for a medicine certificate electronically.
If the medicine certificate is approved, the same proportion of that medicine as other medicines is paid based on the individual's status in the tiered system.
You can always see information on the status of a medicine certificate on My Pages. It is also possible to see medicine certificates for children by switching to their page in My Pages.
What is the process like?
A doctor submits an application. You can see the application on My Pages.
Processing takes up to 3 weeks. If it says "No" and "Application in progress" then the application has not been finalized.
Application approved. If the application is approved, a doctor must issue a prescription. Once a prescription is ready, the drug can be purchased with payment participation.
If the medicine certificate needs to be renewed, the doctor will send in another application.
They need expertise and often healthcare professionals are responsible for administering the medicine and monitoring the patient and using the medicine.
A doctor sends an application to the Medicines Committee who can approve the use of the medicine for the individual.
If the Medicines Committee approves the use, the individual will not pay anything for the medicine.
Medicines that are unavailable from wholesalers are put on a waiting list.
