An exempt medicine is a medicinal product that does not have a valid marketing authorisation in Iceland, or a medicinal product that has a marketing authorisation in Iceland but has not been placed on the market. Pharmaceutical companies sometimes do not consider it worthwhile to market little-used medicinal products in Iceland, or there may be a temporary shortage of a marketed medicinal product, and exempt medicines then often have to be used.

Doctors may prescribe exempt medicines once approval has been obtained from the Icelandic Medicines Agency (IMA), and they can be purchased in pharmacies (with an exemption prescription) in the same way as other medicinal products. Under Article 12 of the Medicinal Products Act, IMA shall assess each application on the basis of the prescribing doctor's justification.

Information on exempt medicines can be found in the Icelandic Medicine Price Catalogue, which also provides information on the importer of the medicinal product.