Phantom drug discounts: billions lost and little savings for patients (cross-border guide)

Context

In a nutshell

• The service providers keep most of the discounts obtained on the purchase of medicines,
• Patients and sickness funds don't see any real savings,
• The CDF severely criticizes the work of the UFSP.

Key facts

• Discounts obtained: CHF 743 million per year,
• Discounts actually transferred: CHF 88 million,
• Withheld discounts: CHF 655 million,
• Pharmaceutical industry: capital advantages of approximately CHF 743 million per year are granted to service providers,
• CDF: estimates that the pharmaceutical industry has granted benefit providers capital advantages of around CHF 743 million per year.

The Federal Finance Control rejects the supervision of the Federal Office of Public Health (FOPH), arguing that the discounts granted by the pharmaceutical industry remain largely in the pockets of doctors, hospitals and pharmacies, without translating into real savings for patients and sickness funds. The CDF severely criticizes the work of the UFSP, speaking of a 'vast, complex, ineffective and opaque' system.

The CDF report highlights that benefit providers keep most of the discounts obtained on the purchase of medicines to themselves, while patients and sickness funds see no real savings. The CDF estimates that the pharmaceutical industry has granted benefit providers capital advantages of around CHF 743 million per year. However, of such

Operational details

The CDF highlights that approximately half of the total amount was withheld in a partially unlawful manner or without adequate consideration. The CDF report claims that manufacturers pay around 98 million a year to doctors and pharmacies for advertising campaigns, calling such payments' sometimes disproportionate '.

The CDF admits that its estimates are subject to considerable uncertainty due to the opacity of the sector and the lack of up-to-date data. The last cognitive study on the subject dates back to 2009, when the material advantages (such as consultancy, sponsorship of research or participation in conferences) were estimated at 1.2 billion francs per year.

According to CDF data, drugs are among the most expensive products in the Swiss pharmaceutical sector, with a price increase of 20% compared to 2009. This has led to increased costs for patients, with an average saving of only CHF 12 per year for a treatment.

The CDF has identified some examples of “ghost” discounts on drugs in Switzerland. For example, an antihypertensive drug was sold at 10 francs per pack, while the list price was 5 francs. The manufacturer then stated that the price had been "discounted" by 50% to incentivise sales.

Another example was found in the canton of Zurich, where a drug against depression had been sold for 15 francs per package, while the list price was 8 francs.

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Key points

The Federal State Council (FSC) criticized the non-application of regulations on pharmaceutical discounts by the Federal Statistical Office (FSO). According to the CSF, the FOPH has never imposed any criminal sanctions since 2020, despite ongoing proceedings. The CSF argues that the FOPH should verify all service providers, not just those who have signed specific agreements.

The CSF recommends that the FOPH should transfer the discounts actually obtained to patients and sickness funds. In addition, the CSF argues that the pharmaceutical industry should be more transparent about the discounts granted and that service providers should be required to pass on the discounts obtained to patients and sickness funds.

According to a 2022 report by the FOPH, Swiss service providers received discounts totalling CHF 2.5 billion in 2020. However, only 10% of these discounts were passed on to patients and sickness funds. The rest was retained by the service providers.

In the Canton of Ticino, for example, service providers received discounts totalling CHF 150 million in 2020. However, only 5% of these discounts were passed on to patients and sickness funds.

Failure to apply the regulations on pharmaceutical discounts also has financial consequences for the Swiss State. According to a 2020 CSF report, the failure

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Source: tio.ch