Global Health Technology Assessment Road Maps

Switzerland - Pharmaceutical


Updated: April 2011
Validated by: The Swiss Assoication of Importers of Proprietary Medicines (VIPS) & The Association of Swiss Generic Companies (INTERGENERIKA)
Switzerland

Decision Makers and Decision-Making Processes Diagram

Diagram

Model description and Symbols:
The ultimate decision maker is listed at the top of the model

Boxes: Decision-making bodies
Solid Arrows: Required step in decision-making process
Broken Arrows: May or may not impact decision

» TO TOP

BACKGROUND

Switzerland (population 7.8 million) is a multilingual, federal state made up of 26 states known as cantons. Health care is the responsibility of three levels of government: the federal government, the cantons and the communities. The Swiss health care system can be described as a mandatory private social health insurance system with unrestricted access to health care and free choice of providers. The Health Insurance Act (HIA) is the federal law on compulsory social health insurance and requires every Swiss resident to buy a basic health insurance offered by around 84 competing private health insurers. The benefit package is defined by federal law and identical for all health insurers. The benefit package includes a positive list for drug coverage and only a negative list for medical services provided by hospitals and physicians. The basic health insurance is financed by a uniform per capita premium which is independent of gender, age and pre-existing conditions. Premiums are only dependent on the canton of residence, the chosen health insurer, the chosen deductible level (300 up to 2’500 CHF) and the chosen insurance model (standard versus managed care model). 75% of the population has selected a standard insurance model with a low deductible level (santésuisse 2008). Even when a rebate of 10-20% is offered, the gate keeping model (GP’s without capitation) plays still a minor role with a market share of 21% (santésuisse 2008). Patients have to pay 10% co-pay up to a maximum of 700 CHF per year in addition to the health care premium and the chosen deductible. The federal and state governments are subsidizing low income individuals to pay the health insurance premium. In Fact around 30% of people can profit from subsidies. Risk selection is still attractive for health insurers as risk adjustment payment across health insurers considers currently only gender and age but not morbidity levels.

About 70% of persons have some kind of additional health insurance covering mainly private rooms and hospital care outside the patient’s canton. The additional health insurance differs in the way that health insurers can make profits, ask for risk adjusted premiums, make limitation for pre-existing conditions or exclude insurance applicants.

Switzerland has 186 public and 128 private hospitals (BFS 2010). Hospitals operational and investment costs are co-financed by cantonal taxes (55 %) and health insurance premiums (45 %). Hospital financing will translate from per diem to DRG payment by 2012. Cantons are responsible for hospital planning and control. Cantons are setting up hospital lists including public and private hospitals based on a health service performance mandate.

Two third of Swiss physicians in ambulatory care are self-employed, one third work in a group practice and half are member of some form of a provider network (FMH 2009). Physicians are paid on a fee-for-service level based on a federal tariff system which is negotiated between the association of physicians and the association of all insurers. Finally, fees are negotiated on a cantonal level.
In 17 out of 26 cantons physicians have the unrestricted or limited right to dispense drugs directly to patients.

Pharmaceuticals are regulated by the federal government. Marketing approval is granted by Swiss Agency of Therapeutic Products (Swissmedic). Drugs must be effective, cost-effective and appropriate to be listed in the positive drug list (SL/Spezialitätenliste). The federal government sets the maximal allowable public price for drugs in the SL. The maximal public price is calculated from the ex-factory manufacture price, the distribution part and a reduced VAT rate of 2.5%. The distribution part for POM comprises a price related surcharge of 0-12% and logistic related surcharge of 4 up to 240 CHF. For OTC drugs the price related surcharge is 80% of the ex-factory price. Pharmacists are remunerated based on the service they provide. Most important are the basic dispensing fee of 3.25 CHF and the fee per prescription line of 4.30 CHF.

Switzerland has the third highest health care spending with 10.7% of GDP (6.3 public and 4.4 private) and 4627 USD/PPP per capita. However, the annual growth in per capita health spending between 1993 and 2008 is 2.1% and lower than other western countries even though Switzerland has no budget caps in place. Pharmaceutical expenditure per capita is, with 461USD/PPP, almost in line with the OECD average. Switzerland has a relatively high share of out-of-pocket payment (around 30%) both for total health care expenditure and pharmaceutical spending (OECD 2010). The Swiss pharmaceutical market has a value of 3 bn € with a generic market share of 12% (reimbursed ex-factory market 2010, IMS Health 2011). 

» TO TOP

DECISION-MAKERS AND INFLUENCERS

Federal Council
The Swiss government (the executive authority) is made up of the seven members of the Federal Council who are elected by the United Federal Assembly for a four-year term of office.

Federal Department of Home Affairs (FDHA)
The FDHA is headed by the responsible Federal Councilor. The FDHA (“equivalent to a Ministry of Health”) is mainly responsible for public health, social insurance, education, culture, statistical office and the Swiss Agency for Therapeutic Products (SATP). The FDHA executes the legal and regulatory framework for health care interventions and the Health Insurance Act (KVG: Federal Social Health Insurance Law). The FDHA is the very final decision maker for drug pricing and reimbursement.

Committee for Social Security and Health of the National Council (CSSH-N) and that of the Council of States (CSSH-S)
The Committees deal mainly with issues concerning the health system, health policy, social security, housing and welfare. It is the task of the committees to carry out a preliminary examination of issues allotted to them, which means that they work closely with the Federal Council. The parliament has been revising the Health Insurance Act in stage since 2004. CSSH-N and CSSH-S are evaluating new health care legislations and bring forward a motion to the full parliamentary meeting.

Federal Office of Public Health (FOPH)
The FOPH is part of the Federal Department of Home Affairs (FDHA) with the key task to promote and maintain the health of all people living in Switzerland. The FOPH has the responsibility for health system regulation, definition of benefit baskets and price regulation. The FOPH is the final decision making body for pricing & reimbursement of drugs and it controls also the social health insurance. The FOPH regulates not only the ex-factory price but also the distribution margin to be shared between wholesalers and pharmacies in payment for logistic and capital costs of distribution.

Federal Drug Commission (FDC)
The FDC is made up by 20 members (medical and pharmaceutical academy (4), physicians (3), pharmacists (3), hospital (1), health insurer (3), drug industry (2), cantons (1), SATP (1) and insured person (2). The FDC evaluates new drugs for reimbursement and provides recommendations to the Federal Office of Public Health (FOPH) for inclusion in the positive drug list (SL-List). The FDC may consult external experts for assistance. In addition the FDC may advise the Federal Department of Home Affairs (FDHA).

Swiss Agency for Therapeutic Products (SATP)
The SATP is the central Swiss supervisory authority for therapeutic products including market authorization and market surveillance. It is a public service organization of the federal government and linked to the Federal Department of Home Affairs (FDHA). The SATP activities are based on the Swiss Law on Therapeutic Products (LTP).

Organization of Swiss Health Insurers (OSHI)
Santésuisse is the umbrella organization of the Swiss social health insurers. The OSHI is active in public health insurance policies, collaboration with institutions and negotiation of tariffs on the national level. The OSHI offers specific services for its member insurance companies.

Price Supervisor
The price supervisor is an administrative unit of the Federal Department of Economic Affairs (FDEA). The supervisor is mainly responsible for price surveillance in areas of low market driven prices such as regulated prices in health care (drug prices, tariffs for providers). The price supervisor may provide price recommendation to the Federal Office of Public Health (FOPH). This is mostly based on international price comparisons. The price supervisor makes his recommendations public.

» TO TOP

DECISION-MAKING PROCESS

The FOPH is the final pricing & reimbursement decision maker. FOPH decisions are based on FDC recommendation and in line with the HIA (Health Insurance Act) and its regulations. International and therapeutic benchmarking are used to set initial drug prices. The FOPH reevaluates pricing & reimbursement of drugs every three years and after patent expiry. In addition reevaluation also takes place in case of new indications or changed limitations. Switzerland does not have an institutional HTA agency such as e.g. NICE or IQWIG to assess new drugs. However, structure and capacity for HTA is in place and cost-effectiveness and affordability are taken into account for coverage (OECD 2010). Furthermore the impact of foreign HTA’s is included in the international benchmarking system.

» TO TOP

REIMBURSEMENT AND PRICING APPROVAL PROCESS

Switzerland knows a two-step process for market access. First a new product needs market authorization by the SATP and second a positive reimbursement decision by the FOPH to be listed in the positive drug list (SL). After the marketing authorization has been granted by the SATP within 300 days, the pharmaceutical company submits a reimbursement application to the FOPH.

The FOPH mandates the FDC to evaluate and classify a new drug in one of five categories:

  1. Therapeutic breakthrough
  2. Therapeutic progress
  3. Saving compared to other drugs
  4. No therapeutic progress and no savings
  5. Not appropriate for the social health insurance 

The FOPH makes the final decision on reimbursement based on the FDC recommendation. Basically, a new drug must be effective, appropriate and cost-effective to be listed in the positive list (SL). Public promotion is not allowed for SL-listed drugs. Efficacy and appropriateness are mostly based on SATP assessment; cost-effectiveness (value-for money) considers both international benchmarking with Germany, UK, Denmark, the Netherlands, France, Austria and therapeutic benchmarking (comparative effectiveness e.g. daily treatment costs). An innovation reward of up to 20% may be granted during the patent protection period.

A positive FOPH reimbursement decision gets a new drug listed in the SL within 30 days after the FDC meeting. The FOPH reevaluates pricing & reimbursement of drugs in the SL every three years and after patent expiry. In addition reevaluation also takes place in case of new indications or changed limitations.

The time frame to get reimbursement depends on the meeting schedule of the FDC. There are 5 annual FDC meetings for the time being. Normally it takes 4-5 months from reimbursement dossier application to official reimbursement status. However, if an innovative drug got SATP market authorization by the fast track approval process, an accelerated reimbursement process is in place.

In case of a projected negative reimbursement decision the FOPH informs the applicant about the designated negative decision. The applicant may then apply for reevaluation before the official reimbursement decision has been issued by the FOPH. Arguments for reevaluation could be e.g. price adjustments or additional data. A second reconsideration application is possible with new evidence.

Generics, Co-Marketing products and new forms with identical price levels get reimbursement by an abbreviated process without FDC assessment within about 7 weeks. A Generic is included in the SL if its ex-factory price is 10 to 60% lower (effective 2012) than its Swiss reference product after patent expiry and external price referencing (international benchmarking). The percentage in price decrease depends on the sales volume of the Swiss reference product. Co-payment is 10% for on-patent and economic off-patent drugs. However, co-payment is 20% for off-patent drugs with prices 20% higher than the average price of the lower third of available off-patent drugs of one particular active. This precondition is reassessed on a yearly basis (so called dynamic differentiated co-payment).

Drugs may be reimbursed outside an official indication/ limitation or outside the SL under the following conditions: the drug must offer a vital benefit to treat a fatal disease if no alternative treatment is available. This kind of reimbursement needs prior approval by a health insurer; price will be negotiated and set by the health insurer.

» TO TOP

DATA REQUIREMENTS

  • Preliminary or final market authorization by the SATP
  • Swiss and foreign physicians drug prescription information
  • Key facts form including:
    • Summary and justification of the application sorted by effectiveness, cost-effectiveness and appropriateness
    • Summary of the 3 most relevant clinical papers which are part of the reimbursement application
    • Substance and relevant formulation patent expiry date including EP-Number
  • Comparative effectiveness (internal price referencing or therapeutic benchmarking)
    • Comparison with existing therapies
    • Request for and justification of an innovation bonus
  • Justification of pack size
  • External price referencing (international benchmarking)
    • Certified ex-factory prices and approved indications from Germany, UK, Denmark, Netherlands ,France and Austria
  • CTD module 2 nonclinical and clinical overviews
  • The three most significant clinical papers from recognized Journals e.g. NEJM
  • Declaration of refund for excessive pricing
  • If available:
    • Epidemiological data
    • Number needed to treat (NNT)
    • Pharmacoeconomic studies

» TO TOP

ACRONYMS

  • Federal Council: Der Bundesrat
  • FDHA (Federal Department of Home Affairs): EDI (Eidgenössisches Departement des Innern)
  • CSSH-N (Committee for Social Security and Health of the National Council):
    SGK-NR (Kommission für soziale Sicherheit und Gesundheit des Nationalrates)
  • CSSH-S (Committee for Social Security and Health of Council of States):
    SGK-SR (Kommission für soziale Sicherheit und Gesundheit des Ständerates)
  • FOPH (Federal Office of Public Health): BAG (Bundesamt für Gesundheit)
  • FDC (Federal Drug Commission): EAK (Eidgenösische Arzneimittelkommission)
  • OSHI (Organization of Swiss Health Insurers): santésuisse (Branchenverband der schweizerischen Krankenversicherer)
  • FSO (Federal Statistical Office): BFS (Bundesamt für Statistik)
  • SL (Positive List of Pharmaceutical Specialties): SL (Spezialitätenliste)
  • SATP (Swiss Agency for Therapeutic Products): swissmedic (Schweizerisches Heilmittelinstitut)
  • LTP (Swiss Law on Therapeutic Products): Schweizerisches Heilmittelrecht
  • HIA (Health Insurance Act): KVG (Bundesgesetz über die Krankenversicherung)

SUGGESTED READING

  • OECD and WHO survey of Switzerland’s health system. OECD 2006.
  • Achieving better Value for Money in Health Care. OECD Health Policy Studies, OECD 2009.
  • Value for Money in Health Spending. OECD Health Policy Studies, OECD 2010.
  • Paris V and Docteur E. Pharmaceutical pricing and reimbursement policies in Switzerland.
    OECD health working papers no. 27 (2007).
  • Health in Switzerland, National Health Report 2008. Available at http://www.obsan.admin.ch
  • Health Care System in Transition – Switzerland. European Observatory on Health Care Systems (2000).
    Available at http://www.euro.who.int
  • Herzlinger RE & Parsa-Parsi R. Consumer-Driven Health Care: Lessons from Switzerland. JAMA 2004; 292(10):1213-1220.
  • Reinhardt UE. The Swiss Health System: Regulated Competition Without Managed Care.  JAMA 2004;292(10):1227-1231.
  • Olsted Teisberg E. Opportunities for Value-Based Competition in Swiss Health Care.” July 10, 2008.
    Available at http://faculty.darden.virginia.edu/teisberge/publications.htm

» TO TOP

USEFUL LINKS

Health Information Sources:

National Information Sources:

» TO TOP

REFERENCE

  1. Paris V, Docteur E. Pharmaceutical pricing and reimbursement policies in Switzerland.
    OECD health working papers no. 27 (2007).
  2. Tsung-Mei Cheng. Understanding the “Swiss watch” function of Switzerland’s health system. Health Aff. August 2010: 29(8), 1442-1451. (Interview with Thomas Zeltner M.D. former head of the FOPH)
  3. The Swiss health system: structure, service providers, the health insurance act. FOPH 2nd revised edition December 2005. FOPH publication number: BAG KOM 10ext05010.
  4. FMH- Ärztestatistik 2009. Schweizer Ärztezeitung 2010: 91 (11), 431-.435

Note: Please refer to useful links above. Official statements and wording may have been used in part.

AUTHORS & CONTRIBUTORS

Author: Kurt R. Müller, PhD, MSc, BBA;  pharmaLevers  K.R. Müller Consulting, Switzerland

» TO TOP


Global Health Care Systems Main Page