Medication

When it comes to the pricing and approval of medicines today, there are still various false incentives and inadequate regulations (e.g. strict margin rules, arbitrary innovation supplement, unclear application of the foreign price comparison and therapeutic cross-comparison, lack of pricing momentum, no annual review of prices by the FOPH, no adequate licensing and pricing rules for new and innovative therapies such as CAR-T cell therapy, etc.): This inadequate regulation and false incentives mean that medication in Switzerland is still expensive compared with medication abroad, that unreasonable price demands by the industry go unchallenged and that fewer generic medicines are dispensed, among other things. 

Technological advancements in healthcare, particularly in the field of genomics and personalised medicine, are proceeding at a rapid pace and creating new and innovative forms of therapy. Many new high-price medicines are likely to be licensed in the coming years. This raises questions of financeability and how to curb expenditure on medication. The current rules do not allow for new phenomena like personalised medicine or combination therapies, for instance, to be taken into account.

The regulations that apply at the moment also ignore the prevalence / frequency of an illness, and its budget impact. This gives rise to the threat of uncontrollable costs and, ultimately, of resources and funds being allocated in a way that is damaging to the healthcare system.

The authorisation procedure and future pricing models must be brought into line with the personalisation of medicine, the handling of a lack of evidence (uncertainty) and the very high prices being demanded in some cases by the pharma industry. The following points are important:

  • Improving transparency: The aim here is to ensure that the statutory regulations are respected and that, whenever possible, decisions are documented on the basis of an evidence-based assessment of the clinical and therapeutic benefits and transparent cost data provided by the company in question. Innovation surcharges should only be permitted if there is clear evidence of a significant added clinical or therapeutic benefit and only as long as exclusivity applies. The set of rules must be updated regularly to take account of the latest challenges (e.g. a solution for the combination problem). If there is no clear evidence (as yet), products should be added to the Specialty List (SL) temporarily, with conditions attached and at a lower price (a procedure sometimes known as ‘managed entry schemes’). If they fail to meet these conditions or subsequently provide evidence of their effectiveness, such products would have to be removed from the list again.
  • Developing and implementing a differentiated pricing system: A system of this kind would take account of prevalence and budget impact. In other words, if a product is to be widely used or its use is to be expanded, a low price must be set or the current price lowered. The set of rules should be guided by a clear, integrated benefit concept (cost-benefit analysis, e.g. QALY). Pricing, on the other hand, must not be driven by a product’s theoretical benefits to the economy as this will lead to unacceptable prices having to be borne by social insurance – prices that are not found on any other market. A reference pricing system should be introduced for medicines whose patent has expired as the competition will make them more cost-effective and affordable.
  • Reorganisation of the reimbursement rules for off-label medicines: Consideration should be given to revising the rules so as to reduce the cases of off-label use (KVV Art. 71a et seq.). A variety of potential measures should be evaluated, such as:
    • Reducing the length of time for which approval is given to new active ingredients that can apply at one and the same time to both swissmedic (for registration as a medicine) and the FOPH (for admittance to the mandatory basic insurance catalogue).
    • A voluntary solution to be created within the health insurance industry to support the process in off-label use. The joint solution, e.g. arrived at through a common organisation, would aim to establish a standard assessment framework and introduce a uniform assessment based on scientific evidence thus giving the insurers greater market power in price negotiations. In addition, an escalation process for affected patients should be looked into.
    • Set up one or more registers to document the effectiveness, appropriateness and cost-effectiveness of the medicines being used off-label. These could also be used for quality improvement purposes.

At present, only the company which submitted the application can appeal an FOPH decision on approval or pricing. This means that, as cost bearers, the health insurers cannot react in the interests of their clients when a medication is admitted to the catalogue of benefits in spite of doubts regarding its WZW criteria or if it is given a price that is too high to be considered justified. Like the Federal Council’s group of experts on cost-cutting, CSS therefore advocates introducing to the pricing system a right of appeal for the stakeholders concerned (insurers, consumers/patients).

CSS is still seeking to establish fair compensation of the distribution cost element by means of negotiations with the service providers in each distribution channel. In this respect, it is necessary to lower the current distribution margin and thus also the price of medicines on the Specialty List, while at the same time negotiating with hospitals, doctors and pharmacists regarding the distribution share that is freed up. Doctors, for example, have a restricted range of medicine on offer and thus lower storage costs. The logistic costs and capital expenditure for hospital pharmacies, on the other hand, are already included in the flat rates paid for hospital inpatient services. These differences must be reflected in the tariffs. At the same time, contract-based solutions have the advantage that additional services provided when dispensing medication can be compensated in accordance with their added value. An example of this kind of additional service is the dispensing of generic medicine at the start of treatment. CSS is working towards such a solution by taking part in the negotiations on service-based remuneration (SBR).