The market

Expenditure on medicines at the expense of compulsory health insurance has risen continuously in recent years and is thus placing an increasing burden on public health budgets. Costs have risen particularly sharply in the areas of immune disorders, cancer therapy, infectious diseases and blood coagulation. Personalised medicine is becoming increasingly dominant, such as that provided by novel cell and gene therapies for blood cancer or rare diseases. In order to ensure that patients continue to have access to the best possible treatment, sufficient financial resources must be made available for a high-quality healthcare system. The efficient use of generics can already open up considerable resource potentials today.

The market for drugs eligible for health insurance can be roughly divided into a patent-protected and patent-free area. In terms of value, the patent-protected drugs dominate, whereas in terms of volume, the patent-free drugs dominate. As soon as there is competition between the original and at least one generic drug at the level of the active ingredient and indication, this segment is addressed as an off-patent market capable of producing generic drugs. This market has grown steadily in recent years and now generates manufacturer sales of CHF 1.262 billion (share = 33.1 percent) and public sales of

CHF 2.045 billion (share = 37.5 percent). The 2,408 billion daily doses sold correspond to a market share of 55.3 percent. Within this segment, generics will occupy the main position from the introduction of the differentiated deductible in 2006.

Generics are cost-effective therapy alternatives to proven active ingredients whose patent protection has expired. The active ingredient corresponds to that of the original preparation and must have the same product properties. In terms of quality, safety and efficacy, the same high standards apply as for the original preparation. Generic medicinal products may only be marketed in Switzerland if they have received approval from the drug authority, Swissmedic, as a preparation with a known active substance and if the bioequivalence or dose linearity with the original or reference product has been verified and confirmed.

In order for a preparation to be reimbursed by the health insurance companies at all, it must be included in the list of specialities by the Federal Office of Public Health. A generic drug is only considered to be economical if it is significantly cheaper than the original preparation. Depending on the level of turnover, the required price difference at the level of the factory selling price is between 20 and 70 percent and depends on the form of administration, dosage and package size. On average, the difference ex-factory is around 36 percent; at the level of the retail price, the difference is 29 percent.

In 2019, generics approved for health insurance companies will be sold in Switzerland for 1,104 million Swiss francs, 3.2 percent more than in the previous year. In the same period, consumption rose to 1,612 million daily doses, an increase of

4.3 percent. Thus, the market for generic drugs approved by the health insurance companies has once again developed more dynamically than the reimbursement market as a whole. The growth of generics is largely determined by the expiry of active ingredient patents. Generics are now available for 299 active ingredients or fixed combinations of active ingredients, four more than a year ago.

With one exception, the nine active ingredients that have expired are either small sales volumes for which further marketing is no longer worthwhile or substances that have now been replaced by other, often more effective treatment methods. For one active ingredient combination, the sale of the generic drug had to be suspended due to a ruling by the Federal Patent Court.

The strong concentration on a few suppliers is particularly striking. Four companies account for around 86 percent of sales, and in numerous indications with predominantly small prescription volumes the number of suppliers is limited to one or two marketing authorisation holders. This circumstance is also reflected in the traditionally high barriers to market entry, in particular the restrictive legal requirements, the strong fragmentation of therapeutic demand and the specific regional conditions.

With market shares of 20 percent by value and 37 percent by volume, the generics quota in Switzerland is roughly on a par with Belgium, France or Austria, but does not come close to that of most other European countries. It should be noted, however, that health care systems, approval procedures, wage and living costs, market size and patient preferences vary widely. In Switzerland, freedom of choice, treatment benefits and service quality are particularly important.

In recent years, payers have benefited in particular from the expiry of patents on high-turnover active ingredients. Direct savings from generic substitution increased to 457 million francs in the year under review, 405 million francs of which were achieved within the substitution groups alone. Most of the savings are concentrated on a few cost-intensive active ingredients.

The efficiency gains could have been even greater if generics had been consistently prescribed instead of the more expensive original medicines. Further savings of up to 182 million francs could have been achieved. Experience from abroad, on the other hand, shows that under real therapeutic conditions, only about 80 to 90 percent of all possible daily doses can be replaced by generics. At present, the average substitution rate is around 69 percent.

The evaluation of generic launches over the last two years shows that high-revenue active ingredients with a considerable price advantage over the original product are substituted particularly quickly, while products with a rather low-cost active ingredient, small market size or a narrow therapeutic range are only slowly replaced.

The combination of oxycodone and naloxone (original Targin) with opiodal action as well as the cholinesterase inhibitor rivastigmine (Exelon Patch) are gradually being substituted with generics. The transdermal form of administration is particularly suitable for the treatment of mild to moderate dementia of the Alzheimer type. Three active ingredients are already achieving high substitution rates shortly after patent expiry. The protease inhibitor darunavir (Prezista) is used in combination with other active ingredients for the treatment of HIV infection. It has the highest daily costs among the newly generic active ingredients. Tamsulosin in combination with dutasteride (Duodart) is indicated for the treatment of benign prostate hyperplasia, while the combination of the active ingredients simvastatin + ezetimib (Inegy) is used for the treatment of primary hypercholesterolemia. Not least because of the higher prevalence, their rapid replacement is to be assessed positively.

In the next three years, the active ingredient patents for numerous drugs will expire or lose their data protection. A sales volume of around 235 million Swiss francs at ex-factory prices, excluding hospitals, will be affected. These include several high-turnover drugs, including Revlimid (2022), Lucentis (2021) and Zytiga (2021).

Biosimilars, such as Etanercept (from July 2018) and Adalimumab (from November 2019) for the treatment of rheumatic diseases and psoriasis, are considered to have particularly large savings potential, the parathyroid hormone analogue teriparatide for the treatment of osteoporosis with a high risk of bone fracture, the monoclonal antibodies rituximab (from September 2018) and trastuzumab (from October 2019) or the haematopoietic growth factor pegfilgrastim (from November 2019) in the field of oncology.

For 2019, the daily therapy costs for generics will average 68 centimes at reimbursement prices, which is lower than ten years ago. This trend is also reflected in the price index for generic drugs eligible for health insurance. Compared to the base year 2003, prices have fallen by 40.3 percent, a development that applies to almost all important generics markets.

Generics play a rather subordinate role in the outpatient and inpatient hospital channel. With manufacturer sales of

76.7 million francs, they account for a modest share of only 5.6 percent. This figure is even slightly lower, as cost-intensive and patent-protected drugs in particular have grown disproportionately.

After a two-year break, the Federal Office of Public Health has resumed the periodic review of the conditions for inclusion in the list of specialities in 2017. Together with the other measures, such as the increase in the price difference between original generic drugs or the stricter conditions of the differentiated deductible, these have led to further substantial savings in the healthcare sector. In the last two years, a total of CHF 63.5 million has been spent on generics alone.

The regulatory authorities, the Federal Council, the FDHA and the FOPH have pushed ahead with various reform projects to control expenditure on medicines, and others are planned, such as the introduction of a reference price system or the extension of the right of substitution to all specialities with the same active ingredient, applying the principle of cost-effectiveness. As a result of the consistent low-price policy, the situation regarding supply availability and production outsourcing could become even more acute, thus impairing security of supply.

As a rule, bottlenecks also mean rising prices and margins, but this is not foreseen by government price regulation. If the companies are no longer able to produce at cost-covering levels, the products will no longer be offered and will have to be replaced by other, possibly more expensive therapies. Frequent drug changes, however, unsettle patients, can have a negative impact on their state of health or slow down the healing process. The increasing lack of essential medicines in primary care will also have an impact on other areas of the healthcare system.

The pharmaceutical industry has long been internationally organized. Markets with high demand and those with a high willingness to pay are usually served more quickly with innovative or scarce medicines. Despite simplified approval procedures for expired patents, parallel imports from the EU to Switzerland will remain the exception rather than the rule.

The introduction of a reference price system and its optimisation potential should be well considered. The envisaged configuration in combination with external referencing and a price link to the original is considered problematic and has not yet been implemented in any European country. In addition, the system is increasingly controversial in terms of cost efficiency and sustainability. Especially in health care systems with high quality standards, losses in freedom of therapy and security of supply are not easily accepted. Countries such as Austria, Norway or Sweden have deliberately decided against a reference price system or suspended it after a short period of time. This was replaced by adapted and administratively simplified solutions.

In September 2018, an alliance of important players from the healthcare industry presented alternative proposals for “well-functioning healthcare”. The measures listed, such as exploiting the potential of generics, adjustments in pricing and price setting, promotion of the distribution of biosimilars, strengthening treatment adherence and preventing waste, could save around CHF 500 million.

Alternative proposals are also presented in the regulatory impact assessment commissioned by SECO and the FOPH. These include a revision of the current pricing procedures for generics and expired patents, mandatory generic substitution/prescription of active ingredients or the promotion of competition by reducing the number of regulations governing the approval of drugs. The extent to which these proposals correspond to the expected cost savings or are able to compensate for them will be evaluated in a supplementary report initiated by the Commission for Social Security and Health.

Source reference:
The data, analyses and calculations have been selected and performed with the greatest care. Unless other sources are listed, the calculations are based on IQVIA’s sell-in data on the retail market permitted for health insurance funds and the FOPH’s list of specialities.

«Nicht nur Ärzte und Apotheker stehen in der Pflicht, in der Therapie wenn immer möglich Generika einzusetzen – auch die Patientinnen und Patienten sollen ihren Beitrag leisten und mitreden.»

Beobachter

Zahlen zu Generika in 2018

Millionen Franken Einsparungen durch Generika

Millionen Franken Wert an kassenzulässigen Generika verkauft

Milliarde Franken Einsparungen insgesamt (direkt und indirekt)

Markt-Zulassung

Ein Generikum muss zuerst bei der Schweizer Arzneimittelbehörde Swissmedic geprüft werden. Swissmedic erteilt die Registrierung (Marktzulassung), wenn die wissenschaftlichen und medizinischen Anforderungen erfüllt sind. In einem zweiten Schritt wird ein Antrag um Kassenerstattung gestellt. Die Kassenzulässigkeit wird vom Bundesamt für Gesundheit (BAG) erteilt, wenn das Generikum je nach Marktgrösse bis zu 70% günstiger ist als das Originalpräparat. Bei Nischenpräparaten, das heisst bei Originalen mit einem Jahresumsatz von 4 Mio. CHF oder weniger, beträgt der verlangte Abstand 20%.

Substitution

Gemäss der gesetzlichen Grundlage im Eidgenössischen Krankenversicherungsgesetz (KVG) Art. 52a Substitutionsrecht können Apotheker oder Apothekerinnen Originalpräparate der Spezialitätenliste durch die billigeren Generika dieser Liste ersetzen, wenn nicht der Arzt oder die Ärztin beziehungsweise der Chiropraktor oder die Chiropraktorin ausdrücklich die Abgabe des Originalpräparates verlangen. Voraussetzung sind das Einverständnis der Patientin oder des Patienten und die Information der verschreibenden Fachperson.