Drugs prices set to drop

Price cuts are planned for brand and generic drugs RTS

The federal authorities and the pharmaceutical industry have reached a deal which should cut drugs prices by at least SFr250 million ($198.9 million) a year.

This content was published on September 13, 2005 - 15:32

Consumer organisations said the agreement was a step in the right direction, but more needed to be done.

The move is aimed at reducing the gap between the price of medication in Switzerland and other European countries, the Federal Health Office and the pharmaceutical industry said on Tuesday.

The measures, which are due to come into force by the middle of next year, will apply to brand medicines and non-brand generic drugs.

A joint statement said the accord, the most significant ever reached between the federal office and the pharmaceutical industry, would allow for considerable price cuts.

"It's good for consumers' wallets because many drugs will be 20 to 30 per cent cheaper [and be] more or less the same as in neighbouring countries," said Thomas Zeltner, director of the Federal Health Office.

It will also reduce health insurance premiums by about one per cent, according to Zeltner.

Price differences

Thomas Cueni, general-secretary of the pharmaceutical industry association Interpharma, said Swiss drugs companies saw the need to tackle the price differences between Switzerland and other countries and to keep spiralling health costs in check.

"What made the choice feasible for us was that we were able to maintain a favourable environment for research and innovation," Cueni told swissinfo.

He said the industry would foot the bill of SFr250 million from its own profits.

The package of measures includes an additional price check and price rules for low-cost non-brand drugs before they are introduced on the Swiss market.

Not enough

Consumer groups and the federal price administrator, who have often attacked the high drugs prices in Switzerland, welcomed the deal but complained it was long overdue and did not go far enough.

Jacqueline Bachmann of the main consumer organisation said the accord between the federal authorities and the industry mostly covered old medications.

The federal price administrator, Rudolf Strahm, said the measures outlined did not include an easing of import restrictions applying to hospitals, doctors and pharmacies.

The umbrella organisation of health insurance companies said the pharmaceutical industry had obviously realised that it had to do its bit to shore up the health sector.

It said it was crucial to regularly monitor the planned measures and to adapt the Swiss pricing system.

Second-highest costs

Last year the pharmaceutical market increased by a moderate 4.5 per cent to SFr4 billion ($3.2 billion), but the number of products sold dropped by more than three per cent.

Latest figures show that health costs in Switzerland last year stood at nearly SFr50 billion, the second highest in the world.

Parliament, which has for years been trying to curb health spending, is due to discuss an amended funding scheme for hospitals in the forthcoming session.

swissinfo with agencies

Key facts

In 2003, total health costs stood at SFr49.9 billion.
This represents 11.5% of Switzerland's Gross Domestic Product. (US: 15%)
Drugs account for 10.5%, or SFr5.2 billion, of health costs in Switzerland.
In 2002, the Swiss spent about SFr450 per person on drugs annually.
In 2004 the Swiss pharmaceutical market increased by a moderate 4.5 % to around SFr4 billion.

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