Industry stakeholders are raising the alarm about access to innovative medicines in Switzerland. Do delays in market access compared to other countries in Europe not only threaten the health of patients in Switzerland, but the country’s status as a global biopharmaceutical R&D hub?
Major Challenges
As outlined elsewhere in this report, Switzerland boasts a top-tier regulatory body in Swissmedic that – while imperfect – has some of the most efficient approval processes in the world. The pharmaceutical industry executives interviewed for this report – many of whom work for companies looking to bring highly differentiated and complex new medical solutions to market – instead identify the main access issues occurring further down the pipeline, during the pricing and reimbursement negotiations with the Federal Office of Public Health (FOPH).
This has led to Switzerland, despite having one of the most advanced healthcare systems in the world, being now ranked sixth in Europe for innovative drug access and ninth for rare diseases, with only 54 percent of new drugs reimbursed compared to neighbouring Germany.
“There are three main areas where improvement is necessary,” says David Traub, president of the local affiliate at Novartis. “First, Switzerland’s pricing system for innovative medicines disproportionally focuses on costs without giving due consideration to the value these medicines bring. The system uses two key mechanisms: foreign price comparisons and therapeutic cross-comparisons. The foreign price comparison benchmarks Switzerland against other European countries, many of which have a significantly lower GDP per capita. This approach fails to account for purchasing power parity, something countries like Germany do adjust for, but Switzerland does not.”
Traub continues, “Second, the therapeutic cross-comparison process is currently often based on economic rather than medical grounds. For instance, a very cheap 20-year-old drug with a totally different mechanism of action might be used for comparison, even if it does not represent the current standard of care. Regulation should ensure that such comparisons are made based on medical criteria – so that the actual value of innovation can be assessed against current clinical standards.”
“Finally, unlike other advanced Health Technology Assessment (HTA) markets, such as Germany or the UK, Switzerland does not account for the therapeutic, economic, or societal value of medicines when making pricing decisions. This is critical because if society wants to make well-informed investment decisions in healthcare, it needs to allocate resources based on the value that innovation delivers. Whether it’s reducing hospitalisations, enabling patients to live more productive lives, or curing diseases, these benefits should be factored into pricing decisions.”
And, according to Daniel Weber, country head of Boehringer Ingelheim, the situation needs urgent reform to prevent further backsliding. “Switzerland faces a strong, one-sided pricing pressure, and securing early product launches is becoming more difficult.,” he states. “Lengthy reimbursement timelines accompanied with unpredictable hurdles put forth by the FOPH slow product approvals.”
For those companies engaged in the rare disease space, the challenges are particularly acute. While Jazz Pharmaceuticals, which boasts a diverse portfolio including therapies for rare cancers and neurological diseases, has managed to launch four products in Switzerland over the past two years, the process has been far from straightforward.
“In Switzerland, securing reimbursement through the Specialty List is essential, but the pathway lacks transparency and predictability,” says Jazz’s executive director and general manager for Switzerland & Austria, Dennis Engelke. “The FOPH uses European reference prices and therapy comparisons to set prices, but the criteria for selecting these comparisons are not clearly defined, which can lead to delays. Additionally, there is no established timeline for completing HTAs, leaving pharmaceutical companies facing uncertainty.”
Engelke continues, “For instance, our epilepsy therapy, which is dispensed primarily in outpatient settings, has faced delays in gaining access to the positive reimbursement list. We also have hospital products that fall under the Swiss Diagnosis-Related Groups (SwissDRG) system, which affects reimbursement and additional payments.”
Accessing and educating HCPs is also more challenging than in neighbouring countries, according to Daiichi Sankyo General Manager Giuseppe Grossi. “While the country is generally welcoming to pharmaceutical investment, accessing customers and engaging with the healthcare system can be more challenging than elsewhere in Europe as direct interaction with HCPs is comparatively limited,” he states. “Therefore, a very strong emphasis must be placed on relationship- and trust-building.”
A Race to the Bottom on Pricing?
Industry insiders decry a cost-cutting culture at the FOPH which they say is making new product launches – and therefore patient access to medicines – more and more challenging. Around CHF 1.5 billion (about USD 1.75 billion) has been saved through medicine price reductions since 2012, although Swiss healthcare costs continue to rise. “Over the past few years, the focus has been too heavily on cutting costs, often at the expense of improving access,” says René Buholzer, CEO of innovative industry association Interpharma. “Switzerland has one of the highest life expectancies globally, which reflects the quality of our healthcare system. However, maintaining this level of care requires a balanced approach, one that does not sacrifice access to cutting-edge treatments in the name of cost savings in a silo alone.”
Buholzer notes that this process has impacted the full availability of medicines on the Swiss Specialities List (SL), an FOPH register which includes all proprietary drugs and their lower-cost generics covered by mandatory basic health insurance. The FOPH reviews the prices of these drugs every three years.
“The price of medicines in Switzerland has roughly halved over the past 20 years,” adds Jérôme Garcin, general manager at BMS. “If this trend continues, more drugs may struggle to launch in Switzerland, which is a scenario we want to avoid. Therefore, it is not enough to focus only on the present; we need to anticipate future needs to ensure that Swiss patients continue to benefit from broad access to new treatments.”
Others are keen to assert that targeting medicines with these price cuts is misguided. “The focus on cost containment is understandable, but we must remember that medicine accounts for less than 12 percent of overall healthcare expenditure,” argues Anne Mette Wiis Vogelsang, general manager at Novo Nordisk. “With Switzerland’s decentralised healthcare system, the focus often falls on this small percentage rather than the broader costs of healthcare provision.”
Ernst Niemack, managing director of trade association vips agrees, contending that in a decentralised system medicines have become an easy government target for reducing costs without addressing the root and branch causes of overspending. “In Switzerland, healthcare is quite fragmented with 26 different systems,” he begins. “Each canton has its own responsibility for hospitals, healthcare professionals, and pharmacies. However, pharmaceutical pricing is regulated at a national level, making it easier for policymakers to lower drug prices rather than, for example, close a hospital, which would be politically unpopular and could lead to local politicians losing their positions.”
Managed Entry Agreements: Important but Overused
Despite all these access challenges, Switzerland does have some unique innovative mechanisms in place to ensure that medicines can make it to patients who need them. For example, for products that fail to secure reimbursement and a place on the SL, there is ‘Article 71’ of the Health Insurance Ordinance (KVV) which allows for reimbursement on a case-by-case basis.
“This legal provision is an excellent safety net, enabling patients to access therapies that are either not yet approved or not fully reimbursed,” says Florian Saur, country president of AstraZeneca. “It is a best practice that offers flexibility and should be adopted in other markets.”
“Article 71 allows for reimbursement of certain off-label medications if they meet specific criteria, particularly for life-threatening diseases,” adds Garcin of BMS. “This is a rare benefit, almost unheard of elsewhere, and it is a tremendous asset for patients. For instance, we recently had a groundbreaking new drug in neuroscience approved in the US after decades of no new treatment options in this setting, and thinking there could be a chance for Swiss patients to have access to it in prime time is extremely exciting.”
The Article 71 mechanism has also boosted Swiss affiliates’ importance within their global groups, with Daiichi Sankyo being a case in point. The Japanese firm has managed to launch some of its most innovative oncology products in Switzerland this way. “Switzerland’s status as an early-launch market for oncology is particularly valuable,” says Grossi. “This enables us to provide rapid patient access while gathering insights to inform our global strategy.”
However, Article 71 is in danger of being overused. As Roche Pharma General Manager Katharina Gasser notes, “While Article 71 offers a temporary solution for cases where there’s a gap between regulatory approval and inclusion on the SL, or for specific indications not yet covered, we view this only as a bridging measure.”
“Relying on Article 71 has its limitations,” adds Saur. “It is a cumbersome process that requires doctors to submit extensive paperwork plus it requires approval from insurers and pharmaceutical companies for each individual case. While this is a great solution for exceptional circumstances, it has increasingly become the norm, particularly in areas like oncology, where innovative treatments often face delays in reimbursement. This process is far from ideal and places unnecessary administrative burden on the healthcare system and risks inequality of access to medicines.”
The burden is being felt particularly strongly within small- and medium-sized enterprises. “While Article 71 is a positive development, it is being achieved at a lower level due to the mandatory rebates that some companies are unable to keep up with,” explains vips’ Niemack. “Products are rated as A, B, or C, with mandatory discounts of between 30 to 40 percent and an additional 10 percent discount after 12 months.” He continues, “For companies with a large portfolio, they may be able to balance these rebates across multiple products. However, for new biotech companies with only one product, these discounts are unsustainable.”
Industry Solutions
What then is to be done about access to innovation in Switzerland? While the country remains a broadly positive, stable, and fair location for which pharmaceutical companies to do business today, the general trends point to a more difficult future.
To address this, the innovative industry has come together under the Interpharma banner to propose two key solutions. “The first is the “Reimbursed Access to Innovation” (RIZ) model, which aims to provide patients with immediate access to new medicines upon approval—having a provisional price set by the FOPH,” lays out Myriam deLeone, general manager of Amgen and Interpharma board member. “Any price differences would be reimbursed by the industry, ensuring immediate patient access without additional costs.”
Interpharma CEO Buholzer adds that “This model is inspired by a similar system in Germany but offers a more generous framework, as companies would be required to pay back the difference between the provisional and final price. This proposal has been included by the Swiss Parliament in the Kostendämpfungspaket 2 (Cost Containment Package 2), but its progress has been slowed by debates surrounding the specifics of how provisional pricing would be managed. We are hopeful that these issues will be resolved because, fundamentally, this proposal prioritizes patient access without forcing them to bear the burden of administrative delays.”
Then there is the pricing system itself. “The second proposal is the Modernisation of the Pricing System (MOPS),” says deLeone. “Switzerland’s current pricing system is outdated and needs to account for the full benefits a treatment provides, such as reducing hospital stays, minimising side effects, and overall improvements in patient health. These factors should be considered when determining a drug’s price.”
Time will tell whether these proposals will be fully adopted, but there is general hope that – in line with Switzerland’s history of practical and sensible decision making – mutually beneficial solutions can be secured. “Switzerland is a small and highly pragmatic country, and with the right resources, we have the potential to operate in a much more agile manner,” concludes Hendrik von Waldburg, country manager of Angelini Pharma. “We possess the talent within affiliates and government alike to be swifter in our approach to introducing innovative therapies. As an innovative country, we should be at the forefront of launching new therapies, rather than waiting for other countries to set the precedent.”
