Switzerland's largest medical insurer, Helsana, has signed an agreement with the Swiss Pharmacists' Society to promote the use of cheaper medicines.
Helsana has said it will compensate pharmacists who sell cheaper generic medicines, instead of the branded, original ones.
The agreement stipulates that prescribed medicine can only be replaced by a generic substitute if the doctor agrees to it.
Helsana pays the pharmacy 45 per cent of the difference between the price of the original medication and its generic equivalent.
As a result, the medical insurer benefits from the leftover 55 per cent savings.
A new law on medical insurance (LaMal), which came into effect in January, allows pharmacists to replace branded medication with a generic equivalent, if the doctor is in agreement.
Helsana is the only Swiss medical insurer to have signed an agreement with pharmacies to reduce the price of medicine.
Although the potential market for generic medication is valued at SFr300 million, pharmacies are expected to lose money. A solution is currently being discussed at the Swiss Pharmacists' Society. (SPHS).
The head of the SPHS, Max Bretano, said the agreement was not linked to the Denner initiative, which seeks to lower the cost of medicaments.
The Denner initiative, "For the promotion of medication at reduced prices", has been rejected by Helsana and the SPHS. It comes to a national vote on March 4.
swissinfo with agencies