Key legal info on regulatory reforms in Swiss Pharma. Prepared in association with Wenger Plattner, a leading law firm in Switzerland, this is an extract from The Pharma Legal Handbook: Switzerland, available to purchase here for USD 99.
1. Are there proposals for reform or significant change to the healthcare system?
The revised Therapeutic Products Act (TPA) entered into force on 1 January 2019. Current therapeutic products legislation projects are listed on the website of the Federal Office of Public Health (hereinafter: FOPH) (cf. https://www.bag.admin.ch/bag/en/home/medizin-und-forschung/heilmittel/aktuelle-rechtsetzungsprojekte.html, last visited on 31 March 2021). Current legislation projects in the area of health insurance are also listed on the website of the FOPH (cf. https://www.bag.admin.ch/bag/de/home/versicherungen/krankenversicherung/krankenversicherung-revisionsprojekte.html, last visited on 31 March 2021). The following overview is intended to provide basic information concerning five major legislation projects.
1. Ordinary revision of the TPA
After several years of discussion, the revised TPA entered into force on 1 January 2019 (some dispositions entered into force earlier).
One of the main aims was to facilitate market access for certain medical categories by creating new and simpler access opportunities (e.g. new authorization procedures for medicinal products approved in an EU or EFTA country) and to simplify self-medication by modifying the allocation of medicinal products to different supply categories (cf. Regulatory, pricing, and reimbursement overview, questions 3 and 14).
A second aim was to improve drug safety in general: The market supervision was modernised and tightened up (e.g. introduction of the pharmacovigilance plan, application of Good Vigilance Practice, increased scope and more detailed definition of reporting obligations). The safety of medicinal products used in paediatrics was also improved: A new register for off-label dosage recommendations for the medicinal products used in paediatrics was created (cf. https://swisspeddose.ch/, last visited on 31 March 2021) and new obligations and incentives for the pharmaceutical industry to promote the development of paediatric medicinal products were established. Minimum requirements for the prescription of medicinal products were defined as well.
The last of the three main aims was to increase transparency. For instance, the assessment reports for human medicinal products with new active ingredients on which the authorization decisions are based (so-called SwissPAR) and the summary report of the results of clinical trials are now published by Swissmedic.
2. Total revision of MPLO and Falsified Medicines Directive:
The totally revised Ordinance on Licensing in the Medicinal Products Sector (MPLO) (Verordnung über die Bewilligungen im Arzneimittelbereich vom 14. November 2018 [Arzneimittel-Bewilligungsverordnung; AMBV; SR 812.212.1]) entered into force on 1 January 2019. One of the main aims of this total revision is to improve the safety of medicinal products.
The modifications will improve, among others, medicine control and traceability in the distribution chain. Intermediaries now face greater responsibility in the medicines market. Another new aspect concerns experimental medicines: They can now be administrated for a limited period in certain cases. This first part entered into force on 1 January 2019.
A second step is the implementation of new safety features: An unique identifier will make it possible to verify that medicinal products are authentic. An anti-tampering device is intended to detect whether packages have been opened. The new art. 17a TPA concerning the voluntary placing of safety features to medicinal product packaging as well as the detailed provisions that are regulated in a separate ordinance are not yet in force. As of today, it is not apparent when these planned revisions will enter into force.
3. Therapeutic products: integrity, transparency and discounts:
The new Ordinance on Integrity and Transparency in the Context of Therapeutic Products (OITTP) (Verordnung über die Integrität und Transparenz im Heilmittelbereich vom 10. April 2019 [VITH; SR 812.214.31]) entered into force on 1 January 2020. It was adopted on the basis of the new art. 55 and 56 TPA. At the same time, art. 33 TPA (Promises and acceptance of material benefits) was abolished.
Art. 55 TPA (Integrity) regulates, in general, that the choice of treatment must not be influenced by financial incentives. Doctors have to choose a treatment exclusively under scientific and objective criteria. This provision applies to the prescription, supply and use of prescription medicinal products. However, the Federal Council (Bundesrat) may extend the scope to other categories of therapeutic products. Gifts with a maximum value of 300 Swiss francs per year that are relevant to the medical or pharmaceutical practice are allowed. Contributions for research, education and training are allowed under certain circumstances as well.
Second, the new regulation is stricter concerning discounts and bonuses. Art. 56 TPA (Duty of transparency) stipulates that all price discounts and refunds granted on therapeutic products (which means medicinal products and medical devices) must be reported and disclosed to the FOPH upon request. The provision shall apply to both, purchase and sale of therapeutic products. Therapeutic products with a low risk potential are excluded from the scope of art. 56 (e.g. Class I medical devices).
The responsible authority for the enforcement is the FOPH. It can order administrative measures and conduct administrative penalty proceedings.
4. Total revision of medical devices legislation:
One of the most controversial legislative projects in the field of therapeutic products is the total revision of the Medical Devices Ordinance (MedDO) (Medizinprodukteverordnung vom 17. Oktober 2001 [MepV; SR 812.213]). The main purpose of this total revision is to harmonise Swiss medical device law with the EU’s new medical devices regulation (EU-MDR) and In-vitro medical devices regulation (EU-IVDR).
The medical device industry plays an important economic role in Switzerland and generates more than 70 percent of their sales through exports, half of which go to the EU. This corresponds to approximately 4 percent of all Swiss exports (export volume 10.6 billion Swiss francs) and a share of 2.2 percent of the Swiss gross domestic product (cf. Bundesamt für Gesundheit BAG, Totalrevision der Medizinprodukteverordnung und Verordnung über klinische Versuche mit Medizinprodukten (neue Medizinprodukte-Regulierung), Erläuternder Bericht, 14 May 2019, page 7, https://www.bag.admin.ch/bag/de/home/medizin-und-forschung/heilmittel/aktuelle-rechtsetzungsprojekte/revision-med-prod-verord-mepv.html, last visited on 31 March 2021). Considering the great economic importance, the question arises as to why the revision was controversially discussed in Switzerland. First of all, the new MedDO, same as the EU-MDR and EU-IVDR, will bring fundamental change to all actors on the market. There are now numerous obligations not only for manufacturers, but also for traders. However, the most controversial point with regard to Switzerland was the unique adoption of EU law by the Swiss parliament. On the one hand, the MedDO refers directly to the EU-MDR in numerous dispositions. On the other hand, both, implementing and delegated acts adopted by the European Commission automatically enter into force for Switzerland too.
In addition to the total revision of the MedDO, further amendments to medical devices legislation have been planned and/or adopted. In order to create the necessary legal basis for the implementation law, namely the totally revised MedBO, the new ordinance on clinical trials with medical devices (Verordnung über klinische Versuche mit Miedzinproduktenand [KlinV-Mep; SR 810.306]) the EU-IVDR implementation ordinance, the TPA as well as the Human Research Act (HRA) (Humanforschungsgesetz, [HFG; SR 810.30]) will also be partially revised. Originally, the amendments to the TPA and HRA, as well as the ordinances, were to have entered into force on 26 May 2020. In connection with the COVID-19 pandemic, the European Commission announced on 25 March 2020, that the full applicability of the EU-MDR would be postponed by one year. The most important provisions, which concern, among other things, the requirements for market launch, market surveillance or the new requirements for clinical trials, will enter into force on 26 May 2021. The exemptions for the placing on the market and putting into service of medical devices that have not undergone a conformity assessment procedure have already been put into force on 1 August 2020. The EU-IVDR provisions will be included in a separate regulation and will enter into force on 26 May 2022.
The situation is even more complex: In addition to the harmonization of mentioned medical device legislation updates to the Mutual Recognition Agreement (MRA) need to be negotiated by the Switzerland‑EU Joint Committee in order to introduce mutual obligations for Switzerland and the EU at international treaty level. (cf. https://www.bag.admin.ch/bag/en/home/medizin-und-forschung/heilmittel/aktuelle-rechtsetzungsprojekte/revision-med-prod-verord-mepv.html, last visited on 31 March 2021).
5. Revision of the HIA: regulatory measures to contain costs:
Swiss health insurance law is often partially revised several times a year. However, these revisions usually do not result in major system changes, but small changes that are just as important, especially when it comes to so-called “cost-saving measures”. Switzerland has one of the most expensive healthcare systems.
As a consequence, cost-saving measures have been the subject of constant political discussion for years. Almost all sides (politicians, hospitals, doctors, insurers, patients etc.) agree that health care costs are too high. There is consensus that savings must be made, but there is no consensus on how these savings can be achieved.
In August 2019, the Federal Council adopted the first of several packages of so-called “cost containment measures – package 1” (Massnahmen zur Kostendämpfung – Paket 1). This package must now be discussed in Parliament.
The content of this first proposal is highly technical, complicated and controversial. Only one example is given below: The Federal Council proposes the introduction of a so-called “reference price system for medicinal products” (Referenzpreissystem für Arzneimittel). To begin with, generics are more than twice as expensive in Switzerland as in the nine European reference countries considered by the FOPH for pricing purposes. The FOPH shall determine the maximum amount insurers have to pay for patent-expired medicinal products and generic products with the same active ingredient. If a more expensive drug is sold, the insured must pay the difference to the reference price. With the introduction of a reference price system, savings of 310-480 million Swiss francs could be realized (cf. Bundesamt für Gesundheit BAG, Faktenblatt Referenzpreissystem bei Arzneimitteln vom 21. August 2019, https://www.bag.admin.ch/bag/de/home/versicherungen/krankenversicherung/krankenversicherung-revisionsprojekte/kvg-revision-massnahmen-zur-kostendaempfung-Paket-1.html, last visited on 31 March 2021). It is currently impossible to predict when, how and whether these provisions will enter into force.
In addition to the cost containment measures – package 1 the Federal Council (Bundesrat) deiced on 19 August 2020 to open the consultation procedure on the “cost containment measures – package 2”, which lasted until 19 November 2020.
The content of the second package of measures is no less technical and complicated than the first package. The focus of the second package is on improving the overall management of the health care system. Central to this is the introduction of a targetsetting, which is to define cost targets for the development of costs in the compulsory health care insurance as well as measures to correct any possible target overruns (cf. Bundesamt für Gesundheit BAG, Faktenblatt Zielvorgabe vom 19. August 2020, https://www.bag.admin.ch/bag/de/home/versicherungen/krankenversicherung/krankenversicherung-revisionsprojekte/kvg-aenderung-massnahmen-zur-kostendaempfung-paket-2.html, last visited on 31 March 2021). The proposed targetsetting is intended to help exploit the existing efficiency potential in the healthcare system. Efficiency potential exists if a certain state of health through medical treatment can also be achieved at lower healthcare costs. Furthermore, the competencies of the federal government with regard to the remuneration of medical services are to be strengthened so that these can be provided more cost-effectively in the future. This includes a regulation for the agreement of pricing models and any reimbursements as well as an associated exemption from access to official documents. In addition, the legal basis will be created for a differentiated examination of effectiveness, expediency and economic efficiency (WZW-Kritierien) as well as for the assessment of the most cost-effective reimbursement possible for analyses, medicines as well as means and objects.
The second package aims to strengthen the effect of package 1, i.e. to contain the development of costs in the compulsory health care insurance to a medically justifiable level and in this way to limit the increase in premiums paid by the insured. The measures are directed at all players and are intended to make them consistently responsible. The savings potential of package 2 is estimated at over one billion Swiss francs. As with Package 1, it is currently impossible to predict when, how, and whether these provisions will enter into force, particularly because the consultation procedure did not end until 19 November 2020.
2. When are they likely to come into force?
This aspect is already outlined in question 1.