Efforts to cut American drug prices could cost Swiss health-insurance premium payers hundreds of millions of francs a year, a new study finds.
Drug prices in Switzerland are among the world’s highest. In America, they are higher still. The American government wants pharmaceutical companies to charge less for new medicines. For firms such as Roche and Novartis, lower prices in their biggest market threaten profits.
Drugmakers are responding by demanding higher prices elsewhere. A study by ETH Zurich and the University of Zurich finds that, if Switzerland and other countries give way, Swiss health-insurance premium payers could face hundreds of millions of francs in extra costs each year.
Switzerland needs to consider how it will deal with this pressure from the USA, says Kerstin Vokinger, a co-author of the study.
America wants most-favoured nation treatment: access to drugs on the best terms available elsewhere—more on this. It is comparing its prices with those in a group of reference countries, including Switzerland. Higher prices in those countries could therefore allow drugmakers to charge more in America.
That creates a perverse incentive. If a country refuses to pay more, a company may find it more profitable to withhold a drug there than to risk a lower American price.
No country wants low prices to cost its patients access to new medicines. The result, Ms Vokinger warns, could be competition among countries to pay more or risk missing out.
How America will set drug prices remains unclear. But the threat is already shaping the debate. A low price in a small nation may affect revenue in the US. Switzerland may have to accept higher prices or risk losing access to new drugs.
Drugmakers are already using this argument in price negotiations, according to the Federal Office of Public Health. The office rejects an across-the-board increase, however: whether America’s pricing models will remain in force over the long term is uncertain.
Ms Vokinger also cautions against overstating Switzerland’s influence. Swiss prices are not currently low enough to determine the American benchmark, she says. They would become relevant only if prices in other reference countries rose.
Ms Vokinger, a lawyer and physician, urges Switzerland to work with other countries on a response. Her study suggests that intense competition to retain access to medicines could leave American prices unchanged while pushing them up elsewhere. Drugmakers would gain; American patients would not.
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