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Companies, government reach drug pricing deal

Medicines are up to 50 per cent higher in Switzerland than abroad, according to studies Keystone

In an effort to improve drug affordability and access, the Swiss government and the pharmaceutical industry have struck a short-term deal: drug makers will withdraw price-related lawsuits in exchange for a faster drug approval process.

Studies show drug prices in Switzerland are as much as 50 per cent higher than beyond its borders, and drug companies have long played defence against government plans intended to bring down prices.

Interior minister Alain Berset, whose portfolio includes health matters, welcomed the deal as “very good, balanced and mutually acceptable solution.”

Speaking at a news conference on Friday, Berset said patients would save up to CHF720 million ($773 million) over the next couple of years.

Walter Hölzle, president of the Association of Pharmaceutical Companies in Switzerland (Vips), stressed that the agreement included a pledge to significantly shorten the approval procedure of new drugs to 60 days.

“The agreement represents a major and important step towards early implementation of needed reforms in the current price system,” he said.

Thomas Cueni, a senior official of Interpharma representing ten major pharmaceutical companies, added the price cuts were a temporary concession to reach a deal.

“We had to swallow that pill also because the health insurance companies have already factored them in,” he told journalists.

Trading off

The agreement is set to come into force on June 1 but will only last through the end of 2014, at which point the deal will be re-examined.

The price reduction could also lead to a slight drop in health premiums according to the Health lnsurance Association, santésuisse.

A call from cabinet in the spring of 2012 to peg prices to the international market was met with legal action from pharmaceutical companies.

They argued the newly mandated drug prices did not sufficiently take into account the therapeutic benefits of each drug.

Under the deal announced on Friday, drug companies will adhere to cabinet’s recommendation of pegging Swiss drug costs to overseas prices. They also promised to drop all current and future price-related lawsuits.

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SWI - a branch of Swiss Broadcasting Corporation SRG SSR

SWI - a branch of Swiss Broadcasting Corporation SRG SSR