Price Controls & Reference Pricing Systems: Switzerland
An extract from PharmaBoardroom’s new country-focused series on market access and health technology assessment (HTA), this piece gives the lowdown on price controls and reference pricing systems in Switzerland. Buy The Pharma Legal Handbook: Market Access & HTA – Switzerland here for £359.
1.1 How does price control at ex-factory prices work in your country?
Price control is regulated in Art. 65d HIO. Triennially, the FOPH reviews whether the medicinal products included in the LS still meet the WZW requirements The medicinal products are divided into three categories, whereby each category is reviewed triennially (Art. 65d para. 1 HIO).
Ex-factory prices, wholesale prices and retail prices of medicinal products are reviewed jointly as part of the triennial price review. The basis for the review is the maximum price of a medicinal product as stated in the LS. The maximum price is defined as the ex-factory price plus the wholesale share (Art. 67 para. 1bis HIO). The ex-factory price covers the services of the manufacturing and distribution company up to the point of shipping from the factory (Art. 67 para. 1ter OHI). The wholesale share is composed of a surcharge covering the logistical services (Art. 67 para. 1quater HIO). After the addition of VAT, the maximum price listed in the LS corresponds to the retail price of the respective medicinal product as charged by pharmacies, doctors, and hospitals.
The price review is conducted by comparing the maximum price of the medicinal product with reference prices of the same medicinal product in other countries (external reference pricing), as well as by a therapeutic cross-comparison (internal referencing pricing) between the medicinal product reviewed and other medicinal products (Art. 65b para. 2 HIO). The average price in the reference countries (external reference price) and the average price for similar medicinal products (internal reference price) are each weighted equally (Art. 65b para. 5 HIO).
The comparison with the reference prices in other countries is done based on the bestselling unit of the respective medicinal product. The therapeutic cross-comparison is conducted based on the smallest unit and dosage of the respective medicinal product (Art. 65d para. 2 and 3 HIO). If the review concludes that the current maximum price is too high, the FOPH orders a price reduction to the appropriate price (Art. 65d para. 4 HIO).
1.2. How does price control at the wholesale level work in your country?
Considering that the wholesale prices or surcharges are already factored into the triennial price review, the abovementioned price control system under Question 1 also applies for this question.
1.3. How does price control at the retail pharmacy level work in your country?
The retail price of medicinal products corresponds to the maximum price as per the LS (ex-factory price plus wholesale surcharge plus VAT) and is reviewed triennially as described under Question 1 above.
2.1. Is there a system of external reference pricing (ERP) in place in your country and if so how is it organised?
Yes, before a medicinal product is approved and placed on the LS, the legal requirements regarding efficacy, suitability, and cost-effectiveness (WZWcriteria) must be met (Art. 65 para. 1 and 3 HIO). Triennially, the price is reviewed whereby it is assessed whether the WZW-criteria are still fulfilled.
Thereby, external reference pricing builds a part of the assessment of the criterion of cost-effectiveness.
2.2. When and/or how often is ERP activated?
ERP is initially activated before a medicinal product is admitted to the LS to determine whether the product is cost-effective. Additionally, an ERP test is conducted triennially as part of the re-evaluation whether the criterion of cost-effectiveness is still met.
2.3. What is the legal framework of the ERP in place in your country?
Art. 32 HIA sets out three conditions for the reimbursement of medicinal products: efficacy, suitability and cost-effectiveness. Art. 65d para. 2 lit. a HIO stipulates that the requirement of cost-effectiveness is assessed, inter alia, by an external reference pricing process. The details of the implementation of such an ERP are further regulated in Art. 34a – Art. 34e HCSO.
2.4. What is the composition of the country basket?
The country basket consists of Germany, Denmark, Great Britain, Netherlands, France, Austria, Belgium, Finland and Sweden. In addition, a comparison with other countries with comparable economical structures may be conducted if the ex-factory price, the wholesale price, or the retail pharmacy price are publicly known (Art. 34a para. 1 HCSO).
2.5. Describe the price calculation and selection for reference products.
ERP is conducted by comparing the Swiss medicinal product with the same medicinal products in the reference countries, regardless of its name. A product is deemed to be the same if the active ingredients and the dosage forms are identical (Art. 34a HCSO). The ex-factory price of the Swiss medicinal product is compared to the ex-factory price of the reference countries whereby the bestselling unit of the respective medicinal product is selected for the ERP (Art. 65d para. 2 HIO). If the ex-factory price is not public in the respective country, the retail pharmacy price is taken into consideration. If the latter is not public either, the wholesale price is taken as a basis for the calculation. Average retail or wholesale margins for the respective countries as well as mandatory discounts are then deducted from the price (Art. 65b para. 3 and 4 HIO and Art. 34b HCSO).
2.6. How often does the price need to be updated?
There is no general obligation to update the prices. However, if the triennial review concludes that the prices are too high compared to the reference countries, the FOPH orders a price reduction. The authorization holders also have the option to apply for a permit to increase the price of the respective medicinal product. Such requests may be granted by the FOPH if the product still satisfies the conditions for admission to the LS and if at least two years have passed since the last price increase (Art. 67 para. 2 HIO).
2.7. How do the “price List”/ catalogues from references countries work in your country?
The FOPH retrieves the prices from publicly available sources. All reference countries have publicly available information on their drug prices.
3.1. Is there an internal reference pricing (IRP) system in your country?
Yes. Besides the ERP system explained in the previous section, the cost-effectiveness of a medicinal product, as one of the criteria for its admission on the LS (and for the triennial review), is assessed with an internal reference pricing system.
By way of IRP, the medicinal product to be admitted or price-reviewed is compared with other medicines authorized in Switzerland that are used to treat the same condition. The FOPH compares specifically the efficacy as well as the cost of the reviewed medicinal products per day or per treatment in relation to such other medicinal products.
3.2. What is the legal framework of the IRP in place in your country?
Art. 32 HIA sets out three conditions for the reimbursement of medicinal products: efficacy, suitability and cost-effectiveness. Art. 65d para. 2 lit. b HIO provides for an IRP to be conducted as part of the assessment of the criterion of cost-effectiveness. Specific rules for the IRP are found in Art. 65b para. 4bis and Art. 65d para. 3 HIO as well as in Art. 34f HCSO.