No Images? Click here March 2017 Pricing of reimbursable pharmaceuticals in Switzerland: Implementation of amended federal ordinances as of March 1st 2017In 2015, in terms of value, more than 82.6% (CHF 4 445 million) of the total pharmaceutical market in Switzerland consisted of reimbursable medicines, most of which were prescription-only products at the same time. These figures demonstrate the importance of this market to the industry. In Switzerland, as in many other countries, the price to the public of reimbursable medicine (maximum price that is reimbursed by the mandatory health insurance) is not freely established on the market, but subject to a complex set of regulatory interventions. In order for a pharmaceutical to be reimbursable, it has to be admitted to the so-called Specialties List ("SL") drawn up by the Federal Office of Public Health ("FOPH"). The criteria for a pharmaceutical to be included in the SL are efficacy, suitability and cost-effectiveness of the medicine concerned. In view of recent decisions by the Federal Administrative Court ("FAC") and the Federal Supreme Court, the Federal Government revised the federal ordinances to the Swiss Health Insurance Act ("SHIA") and introduced significant amendments relating to the criterion of cost-effectiveness. In particular, for each triennial review of the continued compliance with this criterion, not only a comparison with the average ex-factory prices abroad is drawn. Also, a therapeutic cross-comparison must be established to evaluate the cost-benefit-ratio more appropriately. Overview of the new regulation on the evaluation of the cost-efficiency criterion and pricing of medicines (originator products) First, a comparison with the average ex-factory prices abroad is drawn (so-called "Auslandspreisvergleich", APV). However, only those countries with economically comparable structures in the pharmaceutical market sector are eligible for such a comparison. These countries are currently: Germany, Denmark, UK, the Netherlands, France, Austria, Belgium, Finland and Sweden. Second, a therapeutic cross-comparison is made with medicines that are used for the treatment of the same disease (so-called "therapeutischer Quervergleich", TQV). Depending on the therapy, either expenses for daily treatment (e.g. for antidiabetics) or costs for the whole treatment (e.g. for antibiotics) are taken into account. According to the amended ordinances, innovation claims are also considered when applying the TQV for a maximum period of 15 years. Finally, the amended ordinances state that both prices established by the APV and TQV must be weighted equally (each 50%) to determine the final ex-factory price. The maximum price as reimbursed by the mandatory health insurance consists of the ex-factory price, the sales and marketing portion of the overall cost, the sales and value-added tax and the distribution costs. Once the FOPH has added a medicine to the SL, it examines every three years whether or not the criteria of efficacy, suitability and cost-effectiveness are still fulfilled. If this periodical review reveals that the prices are too high, the FOPH issues a decision on price reduction. Former practice of the FOPH and recent court decisions Some of the concerned authorisation holders successfully challenged the respective FOPH decisions on price reductions before the FAC (cf. FAC decision C-5912/2013 of April 30, 2015). The FAC held that the FOPH's practice was incompatible with the requirements of the SHIA that demand a complete review of the cost-effectiveness criterion. Cost-effectiveness may not be determined only by a mere price comparison but must include the cost-benefit-ratio as determined by the TQV-criterion. Therefore, The FOPH's practice was not in line with the imperatives of the SHIA. This FAC decision has been upheld by the Federal Supreme Court (9C_417/2015 of December 14, 2015). Subsequently, the Federal Government announced that the ordinances based on the SHIA would be amended. The review announced for 2016 was suspended, but will restart in 2017. The most important amendments for originator products The most important amendments for generic products Smaller price differentials are expected at the moment of the periodical review (10 % for small volumes; 35 % for larger volumes). First assessment of the amendments In particular, the question of the relevant medicines used for comparison in the context of the TQV might lead to controversies, even in the future. In the ever more important area of personalised medicine, for example, conditions other than those used in traditional medicine should apply to the cost-efficiency of new, effective therapeutics in this field. What the new regime exactly means for pricing is still unclear as the decisions of the Federal Courts were not in favour of "higher" or "lower" prices but simply of a system in conformity with the SHIA. However, it seems that the opinion prevails according to which price reductions in times of high exchange rates of the Swiss Franc tend to slow down because the prices of the reference products are still based on former exchange rates and are thus rather high. It is beyond doubt that the amendments will increase the administrative burden of the authorities and pharmaceutical companies alike. In any event, companies are advised to observe the future practice of the FOPH with a critical eye and should keep in mind that decisions on price reductions can be challenged before the FAC within 30 days. Autoren: Dr. Stefan Kohler und Barbara Schroeder de Castro Lopes VISCHER AG The publisher cannot be held liable for the correctness, completeness and topicality of any contents or presentations in this News Alert. Copyright © 2016 VISCHER AG; Basel/Zürich. All rights reserved. |