Cost point and prices
Price advantage of generics
Generic drugs are considerably cheaper than brand name drugs. Depending on the medicine, dosage and package size, generics can be 20% to 70% cheaper than their brand name counterparts.
The introduction of a variable co-payment as of 1 January 2006 (20% for brand name drugs, 10% for generics) was an initial driver of the growth of the generic drug market. However, a later change to the law allowed brand name drug manufacturers to “buy” their way into the lower co-payment category, massively slowing the growth of generics. Many brand name drug producers reduced their prices to that of a theoretical generic drug, circumventing the higher co-payment. This one-time price reduction allowed their products to qualify for the same 10% co-payment category as generics. In 2011, a change in variable co-payment regulations limited this privilege to a period of two years. www.medikamente.concordia.ch
How are prices for generics determined?
After the patent for a brand name medication expires, an international price comparison and a therapeutic cross-comparison are made, with both being weighted equally. The Swiss drug price is then adapted to the European price level. The generic drug price is based on the price of the Swiss brand name drug following its adjustment to the European price level. This means that the prices of Swiss generics are also determined by a comparison with European drug prices, albeit indirectly. When introduced to the market, Swiss generics must be cheaper than their brand name counterparts; depending on the case, this price advantage can be up to 70%. For generic equivalents of brand name products with a small annual turnover of CHF 4 million or less, the generic only needs to be 20% cheaper.
Cheapening of medicines – a risk for patients?
The Federal Council would like to reduce the cost of medicines. It wants to introduce so-called reference prices for patent-free medicines. Today doctors have the freedom of choice to prescribe the most suitable medicine.
In future, health insurances are supposed to decide to what extent medicines are reimbursed. If the doctor and patient choose a more expensive medicine, the patient pays the difference from their own pocket or else must accept a cheaper medicine. Doctors, pharmaceutical companies and patients are concerned about a cheapening of medicines and are taking a stand against it.