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Pharma and Politics: The Swiss experience


The view of the swiss Social Democrats in 2001

In a media conference, the Social Democrats presented a list of measures against the exploding cost of medicine. Here excerpts of that presentation.

Source:
Homepage "Simonetta Sommaruga (Sozialdemokratin/Schweiz)"
-> Themen -> Gesellschaft, Bildung und Gesundheit -> pdf-Datei [german/french]

1) CURRENT SITUATION

1.1 Excessively rising costs

In 2000 the cost of medicinal drugs amounted to 21% of health insurance expenditures. The total cost of such drugs was 11.5% higher than in 1999. The increase in the cost of drugs was the greatest increase of all expenditures for basic health insurance over the last five years, namely 40%!
The drug cost explosion is caused not by an increase in volume, but by an increase in the price of individual drugs.

1.2 Switzerland internationally at the upper price limit

Medicinal drugs sold in Switzerland are currently
* 20 – 30% more expensive than in "high price" countries like Germany, and the Netherlands
* 50 – 70% more expensive than in "normal price" countries like France, Belgium, the UK
* 100% more expensive than in "low price" countries like Italy

1.3 Generic drugs unused

In Switzerland, the size of the generic drug market is being held artificially small. The size of the market for generica based on the total market for pharmaca in some countries:
3,2% in Switzerland:
30% in the Netherlands:
17% in Germany
18% in Canada
12% in the USA

1.4 An open market does not exist

The swiss pharma market is completely protected against competition. Two things contribute to this. Firstly, parallel imports of medicinal drugs from third countries are prohibited. Secondly, the swiss pharma branch has set up an artificial market segmentation by means of various packaging schemes, and superficial diversification rules, etc.
Subsequent to intensive lobbying by "Interpharma", a change in cartel law to allow parallel imports was narrowly rejected in Parliament in March 2001.

1.5 Unnecessary purchases, wastefulness

Every year, medicinal drugs having a value of over 500m Franks are thrown away. Investigations have shown that up to 40% of long-term treatments with drugs are prematurely discontinued by the patients. Reasons for this waste:
* The drug packages are too large or not appropriate for the therapy
* Too many drugs are prescribed
* Many long-term therapies are broken off, because
---- the reason for the therapy is not accepted,
---- the decision for the therapy was not made by both sides - medic and patient,
---- the patient notices no improvement, or
---- the side effects are greater than the positive effects.

2) ECONOMIC AND POLITICAL FORCES

Via corruption of one kind or another in connection with pharmacies and governmental authorities, the pharma branch consequently keeps the market closed. On the other hand, the health insurance trusts, e.g. Santésuisse, have never adopted a policy of actively resisting undue price increases or furthering competition in the pharma sector. In the area of drug costs, the Santésuisse has been lamed by the (parliamentary) Conservatives. Effectively there is no real institutional interest in lowering the cost of medicine.

3) CATALOGUE OF STEPS THAT SHOULD BE TAKEN

3.1 Physicians should take due notice of generic drugs in their prescriptions

3.2 The pricing spiral must be cut off: drug approval only on the basis of evidence of therapeutic and/or price advantages
In order to avoid the trick that the approval of new drugs is 'forced' through the removal from the market of needed older drugs, the possibility of parallel imports must be available.

3.3 Simplified approval of drugs with expired patents (parallel imports)

Currently there is a heated debate over the details in the "regulation of the simplified approval of medical substances". This regulation was intended to make parallel imports of medicinal drugs possible, but now threatens to effectively become a prevention regulation instead. Things are being introduced into the draft that do not belong there: detailed specifications for repackaging, an obligatory inclusion of charge-specific documents from the manufacturer, a consultation of the original manufacturer (patent holder), the prevention of parallel imports as soon as the original manufacturer stops placing the product on the market, etc.

3.4 Price comparison with the European average instead of with high-price countries

The average EU pharma prices should be used as a factor in the determination of medical drug prices, and not the three high-level prices in Germany, the Netherlands and Denmark. The practice of using the latter countries was a direct result of the influence of the swiss pharma lobby.

3.5 Harmonization with medical drug approval in the EU (EMEA)

Switzerland should recognize the EMEA evaluation of medical drugs, or at least adopt a close cooperation with the EMEA. The goal should be a harmonization of the approval process and medical drug categorization in order to put an end to the market segmentation practised by the industry today.

3.6 A lowering of the margin of the pharmacies

The price fixing procedure must examine the margin of the pharmacies. Switzerland is "over pharmacized" because of the far too high margin. Over the next 10 years, this margin should be reduced by 1% p.a. relative to the procurement prices.

4) RESULT

In the swiss parliament, this catalogue of measures was rejected to a large extent by the conservative majority.


In July 207 the Neue Züricher Zeitung reported:

Pharma firms outmanoeuver the politicians - measures against the high cost of medical drugs legally undermined


In 2006 the costs for prescription-obligatory drugs have increased by 120m Franks, despite the fact that Federal measures to lower the cost of drugs have resulted in savings of 365m Franks. According to the price monitor [Rudolf Strahm], the pharma industry has reacted with a corresponding counter strategy.
.....
According to Strahm, the industry had removed 598 existing products having an average price of 66.50 Franks per package from the market, and at the same time had placed 543 new packages with an average price of 180.70 Franks into the market. I.e. the old drugs were replaced with new drugs of three times the old price.

Source:
Neue Zürcher Zeitung "Pharmafirmen manöverieren die Politik aus", 27.07.2007 [german]


In March 2008 an MP of the swiss parliament made an information request concerning a

Comparison of the prices of medical drugs with those in neighbouring countries.

1) Which are the top 25 medical drugs sold in Switzerland?
2) What are the factory outlet prices ... of these drugs in Switzerland and in the neighbouring countries (Germany, Italy, Austria, France)?
3) ...

The answer of the government in May 2008 disclosed that the price determination for ... medical drugs ... is made on the basis of a comparison with other drugs on the special list ... and the prices in a group of other countries. Germany, Denmark, the Netherlands, and the UK are the major reference countries. [see source below]

Eulenspargel:
A simple inspection of the price list leads to the conclusion that 25% of the listed drugs (covering the five countries) are sold in Switzerland at the highest or the second highest factory outlet price. For the other countries, this figure is:
Denmark 28%
Germany 31%
Netherlands 1%
UK 5%

This rough estimation means that
- as ever, the drug prices in Switzerland use the high-price countries for orientation, despite the demand by the Socialists back in 2001 for orientation on the average EU prices, and
- for the given list of 25 top drugs, the high-price countries include Germany, Denmark and Switzerland, but not the Netherlands and the UK.

Source:
Die Bundesversammlung " 08.3187-Interpellation: Medikamentenpreis-Vergleich mit den Nachbarländern", 05.06.2008 [german]