Insurers find drug prices hard to swallow

Medications cost anything up to a third more in Switzerland compared with neighbouring countries Keystone

Health insurers have called on the government to reduce drug prices by up to 25 per cent, bringing them in line with those in neighbouring countries.

According to a study carried out for the insurers’ association, Santésuisse, such a measure could cut SFr600 million ($507.3 million) from the nation’s healthcare bill each year.

The insurers add that the knock-on effect would be a reduction in the cost of insurance premiums. “We could reduce the average premium by three per cent,” said Marc-André Giger, head of Santésuisse.

The association compared the prices of the 100 most popular medications sold in Switzerland with those in five neighbouring countries.

The results show that these pharmaceuticals cost 34 per cent less when they leave the factory floor in Austria, 30 per cent in Italy, 27 per cent in France, 26 per cent in Belgium and 15 per cent in Germany.

For retail prices, the difference ranges 18 to 38 per cent.

Drug resellers and pharmacists have often claimed that higher Swiss salaries explain the price differential, but Santésuisse says this is not justified.

High salaries

According to Fridolin Marty, who carried out the price comparison for the association, 84 per cent of all drugs sold in Switzerland are made outside the country.

Santésuisse says the Federal Health Office, which approves the retail price and the sale of all medications, should consider price cuts.

It says that drugs no longer protected by a patent should cost a quarter less, while those still benefiting from intellectual property rights should see their price drop 15 per cent.

The association also suggests reviewing periodically the price and the efficiency of all medications reimbursed by health insurance schemes.

Santésuisse says that new pharmaceuticals that are only slight improvements of older ones no longer protected by patents should not be given the price benefit of innovative drugs either.

The association has requested as well that the sale and use of cheaper generic medications be promoted to help cut costs.

Last word

Marty believes that Santésuisse’s demands are realistic, although they will not stop rising health costs alone. He adds the government has a major role to play here.

“The authorities have the last words on prices in the Swiss drugs market,” he said. “The state has also kept prices high because of pressure from the pharmaceutical industry.”

But Marty reckons that this policy has few benefits. “We end up simply subsidising foreign companies,” he added.

The Santésuisse results confirm those released last month by Switzerland’s price watchdog. Its survey showed the ten most sold medications locally were on average a third more costly than in Germany.

swissinfo with agencies

Key facts

Health insurers reimbursed SFr4 billion for medications.
Insurers pay out more for drugs than for outpatient services.
Medication accounts for a quarter of Swiss citizens health premiums.
Healthcare spending in Switzerland reached SFr49.9 billion in 2003.