Switzerland’s healthcare system is at a crossroads. Although still one of the world’s bastions of biopharmaceutical innovation, the country’s domestic healthcare environment is under increasing pressure from rising costs, mounting drug shortages, and a regulatory environment that is slow to adapt. What role could pharmacies and the off-patent industry play in digging Switzerland out of a looming crisis?
Pharmacists: A Bolstered Role
As healthcare costs continue to soar globally, the role of pharmacists is rapidly evolving to meet demand, particularly in areas of patient counselling, medication management, and preventive care. In Switzerland, where the number of primary care physicians is declining, pharmacists could be a key part of the solution.
“There is a pressing need for task shifting, particularly to pharmacists and nurses, to alleviate the burden on primary care physicians,” says Martine Ruggli, president of Swiss pharmacy association Pharmasuisse. Global health organisations, including the WHO, have noted that task shifting can reduce healthcare costs and improve outcomes while studies from the Swiss Federal Office of Public Health confirm that delegating duties to pharmacists could save millions. However, legislative and reimbursement hurdles are slowing up the process
“Swiss pharmacies have proactively prepared for this shift by enhancing their competencies, allowing them to dispense prescription-only medications and provide in-depth patient counselling,” continues Ruggli. “However, the significant hurdle of being unable to bill insurance for these essential services persists forcing patients to bear the full cost. This limitation poses a major obstacle to fully realizing the potential of pharmacies within the healthcare framework.”
She adds, “The healthcare system must fully embrace and utilize the extensive expertise of pharmacists. We are highly educated, easily accessible, and uniquely positioned to act as a primary gateway into the healthcare system. The value that pharmacists bring is profound, as evidenced during the COVID-19 pandemic. Throughout this crisis, pharmacists were the constant—remaining open, administering vaccines, conducting tests, and providing essential care when other parts of the healthcare system were overwhelmed.”
Generics: Untapped Potential
In response to escalating healthcare costs Swiss health authorities have increasingly recognised the value of generics and biosimilars. This has led to several strategic changes aimed at boosting their share of a pharma market that has historically been heavily skewed towards innovative drugs.
Recent reforms include adjusting distribution margins to eliminate financial disincentives for prescribing lower-cost drugs, a crucial step given that self-dispensing physicians—who account for about a third of Swiss healthcare professionals—previously benefited from prescribing more expensive medications. Additionally, the policy now allows pharmacists to switch from original drugs to generics and biosimilars more freely
However, the economic and regulatory hurdles are immense. Swiss generics remain 60 percent more expensive than in neighbouring European countries, stymied by a system that benefits higher-cost innovative drugs. The recent adjustments to distribution margins for lower-cost drugs have made generics even more expensive. According to Lucas Schalch, managing director for generic industry association Intergenerika, “low-cost drugs have seen a dramatic increase in public prices, negating many of the intended savings”.
For Ruggli, it is the generics sector itself that needs to rethink its pricing strategies. “Swiss generics are still more expensive than elsewhere in Europe, despite the fact that most are not produced domestically. This has led to ongoing debates, especially in the context of the current global medicine shortages, about the sustainability and fairness of the pricing model.” Schalch pushes back, stating that “Despite the perception that drugs produced abroad should be cheaper, the costs associated with local distribution, quality control, and compliance with regulations mean that prices here cannot be aligned with those of other countries.”
Biosimilars: Green Shoots of Progress
In the biosimilar field, where copycat drugs provide lower-cost alternative to expensive biological originators, there has been significant progress. “Several measures have been implemented to promote the adoption of biosimilars,” says Schalch. “The new distribution margin system is one such measure. Pharmacists are now allowed to switch patients from original drugs to biosimilars, similar to the process for generics. Additionally, the introduction of a 40 percent copayment as of January 1st has incentivized patients to choose more affordable alternatives, including biosimilars.”
He continues, “Another crucial development has been the streamlining of reimbursement procedures. Previously, when a physician switched a patient from an original drug to a biosimilar, a new approval from the health insurance provider was required, adding unnecessary administrative complexity. Now, if the original drug has already been approved for reimbursement, the transition to a biosimilar can occur without any additional paperwork.”
Supply Challenges
Like other countries in Europe, Switzerland’s lack of domestic generic medicine manufacturing was shown up during the COVID-19 pandemic and in many cases led to supply shortages. Additionally, pricing pressures risk creating a situation whereby Switzerland is unable to secure the supply of essential products.
“While the push towards reducing drug prices has been effective in controlling costs, it has led to challenges, particularly in drug supply,” explains Schalch. “The pressure to lower prices has compelled many manufacturers to relocate production to countries like India and China to sustain profitability. This shift has exposed vulnerabilities in the supply chain, which became evident during the pandemic when export restrictions disrupted access to critical drugs. Switzerland is currently grappling with severe supply issues, notably in areas such as antibiotics.”
The decentralised nature of Swiss healthcare is exacerbating this issue. “Drug shortages are a critical global issue, and Switzerland is additionally challenged due to its small population and status outside the European Union,” begins Ruggli. “This situation is further complicated by the fact that, in Switzerland, the responsibility for ensuring the security of drug supply predominantly lies with the Cantons—except for a few vital medications managed by the federal government. This decentralised structure hinders effective coordination, as Cantons lack the possibility to negotiate directly with the EU.”
“PharmaSuisse is actively advocating for a centralization of this responsibility, proposing that the Swiss Confederation assume control over the supply of all medications,” suggests Ruggli. “This would enable more streamlined negotiations with European entities and other countries, essential for securing a reliable drug supply.”
Schalch adds that greater international collaboration is key. “Switzerland, given its size, cannot tackle these challenges in isolation,” he states. “We must actively engage with other nations, particularly within the European community, to develop collective solutions. This might involve participating in joint initiatives or forming strategic alliances that ensure Switzerland’s inclusion in global supply chains. However, this is complicated by Switzerland’s non-membership of the EU, which can limit our influence in these discussions.”
Regulatory Reform: Need for Speed
Both Ruggli and Schalch agree that Swiss healthcare regulations are evolving at a glacial pace. Reforms that would allow pharmacies to expand their services, or incentivise generics and biosimilars, often stall in lengthy parliamentary processes. Ruggli remarks that “despite being in discussion for eight years, critical legislative reforms remain uncertain due to political gridlock”.
Schalch adds that even when new legislation is passed, it often does not have the wished-for effect. “While the distribution margin reform aimed to encourage the use of generics and biosimilars by correcting the previous system’s bias toward more expensive drugs, the unintended consequence is that increased margins on low-cost drugs will eventually nullify these savings—a fact that seems to have been overlooked.”
Looking to the future, Schalch suggests that a minimum price for medicines is crucial to ensuring market supply. “The current pricing model in Switzerland, which operates on a continuous downward trend, risks making drugs so inexpensive that it jeopardises their supply. We need to advocate for a minimum price to reverse this unsustainable trend.” Ruggli agrees on this point, noting that “we need to avoid driving drug prices too low, as this could discourage pharmaceutical companies from maintaining a presence in Switzerland, further aggravating supply issues.”
Whether Switzerland can maintain its reputation as a global leader in healthcare while ensuring that its system remains accessible and sustainable for future generations is still unclear. Yet if the country can strike a balance between lowering drug price costs and creating a welcoming environment for investment (as well as better leveraging its network of expert pharmacists), hope will not be lost.
