3 questions to our new Board members: David Traub, Managing Director of Novartis Pharma Schweiz AG

Switzerland has long been seen as an attractive location for the pharmaceutical industry. This is currently changing – where do you see an urgent need for action?

I’m convinced that the Swiss system for setting medicine prices has to be thoroughly and urgently revised.
Access to medication is already limited in Switzerland in comparison to international standards: Of the innovative medicines approved by the EMA between 2019 and 2022 for example, only half as many medications are reimbursed as standard in Switzerland when compared to Germany.¹
This situation could worsen even further – despite the fact that innovative medicines over the past 20 years have made sure that some diseases once akin to death sentences can now be well treated. At the same time, medicines are not the cost drivers in the Swiss healthcare system but have remained constant at 12% of healthcare expenditure.²
As well as patient care, the business location is also eroding. The increasingly unpredictable market conditions mean that, more and more, Switzerland is losing its attractiveness as a leading global location for pharmaceuticals. This process has to be stopped. 

What do you think the modernization of the pricing system should look like?

I have a clear idea of that: the basis should still be the therapeutic cross-comparison and the price comparison with other countries. In future, though, it will be crucial for the therapeutic cross-comparison that the choice of the comparative treatment is made on the basis of clear and comprehensible scientific-medical criteria. The currently practiced selection based on often purely economic criteria does not reflect the fundamental concept of a therapeutic cross-comparison. For example, innovative, targeted treatments are compared in terms of price with non-specific chemotherapeutics from the last millennium, even though patients receiving the new treatments live significantly longer.
With international price comparisons, we urge that the referenced foreign prices now take into account the purchasing power of the individual countries. Of course, treatment in a country with high purchasing power such as Switzerland has to cost more than in a country with less purchasing power – as is the case with other goods. The WHO also recommends taking into account the purchasing power when setting external reference prices.³
Finally, the benefits of a medicine for patients, for the healthcare system and for society should also be considered in the future. A structured benefit assessment with clear criteria has to be introduced, as has long been the case in other countries.

What’s your position on the introduction of volume discounts currently under discussion?

In recent years we’ve seen various initiatives to reduce costs in the healthcare sector, particularly in terms of drug prices. More than CHF 1.5 billion is already being saved annually due to recurring measures.⁴ Further measures in an already difficult environment are dangerous and have to be approached with extreme caution.
The widespread introduction of cost impact models, meaning volume discounts, is currently under discussion. The discounts of up to 50% on sales proposed by the FOPH come close to a penalty tax for innovation. It also sends out the signal that innovations are no longer valued in Switzerland, and as a result, Switzerland is further losing its attraction as a business location.  This is why we reject this proposal. 

1. Press release:Availability of medicines: Switzerland is losing ground – Interpharma ↩︎
2. iph_panorama_2024_3_D_web.pdf, p.13 ↩︎
3. 9789240011878-eng.pdf, p.8 ↩︎
4. Cost containment package 2: A highly dubious record – Interpharma ↩︎