With the Trump administration imposing tariffs of up to 39 percent on Swiss goods (recently reduced to 15 percent), the pressure on Switzerland’s most influential industrial sector – pharmaceuticals – has undoubtedly intensified. Yet the industry continues to wield a super-size effect on the local economy, contributing up to a tenth of the national GDP and supporting a staggering quarter of a million jobs nationwide once auxiliary functions such as logistics and academic research are factored into the equation.
Indeed, according to scienceindustries, a business association representing more than 250 firms with a local footprint, Swiss exports of chemicals and pharmaceuticals rose by more than 10 percent in 2024 hitting a new record of CHF 149 billion (USD 184 billion). This is tantamount to more than half of the country’s entire exports, with immuno-biologics alone accounting for a whopping 18.5 percent.
At the same time, FDI flows into the sector have continued unabated with Urs Indermühle, managing partner and life sciences sector leader for Europe West at EY perceiving “significant international company formation across the Swiss pharma landscape, both in terms of R&D-focused operations and commercial organisations,” as multinational drug developers continue to expand their in-country footprints and new market entrants establish local affiliates.
“Currently, the pharma industry is generating roughly CHF 4.4 billion (USD 5.4 billion) in annual sales in Switzerland but investing close to CHF 9 billion (USD 11.1 billion) in R&D locally over the same period,” notes René Buholzer, CEO of Interpharma, an association grouping together innovative drug developers. “On top of that, our members are paying an estimated CHF 5 billion (USD 6.2 billion) in taxes per annum across the three levels of government: federal, cantonal, and municipal. In other words, we are investing significantly more into the country than we actually earning here,” he points out.
Sustained Investment
What, then, are the underlying drivers of such a phenomenon? Biopharma’s enthusiasm for continuing to invest in Switzerland “is underpinned by the confluence of various critical factors,” according to Dana Vigier, VP and Central and Northern Europe Area Head at Alexion, a United States incorporated rare disease specialty player whose parent company is the Anglo-Swedish biopharma, AstraZeneca. “In our opinion, Switzerland offers a unique blend of stability and innovation intensity: encompassing a favourable regulatory, policy and fiscal environment, while simultaneously providing ready access to top-notch human capital, technological infrastructure, and collaboration opportunities,” she elaborates.
Hence the reason why the company has determined to make Zug the site of their European and international headquarters. “Essentially, our Swiss offices have been rendered responsible for directing all company business outside the US and Japan, which equates to a substantial operational commitment,” she confirms.
Carl-Michael Simon, country manager for mid-size markets at Argenx, a global immunology company committed to improving the lives of people living with severe autoimmune diseases agrees that the Swiss market offers a somewhat unique value proposition. “What is exceptional is that it combines the presence of major pharmaceutical players with a vibrant biotech and scientific research community attracted by policy pragmatism, tax benefits, regulatory clarity, and the ability to tap into a remarkably deep, diverse and multi-sectoral talent pool,” he explains.
Market Access
When it comes to domestic pharma consumption, with a population size of barely nine million, Switzerland’s reputation for easy access and innovation friendliness coupled with a high-performance, efficient health system have long been essential to the market’s overall appeal.
“For us, the Swiss market stands out for being a forward-thinking, enlightened environment with early access to innovative treatments and efficient pathways to bring medicines to patients quickly. Most of the main stakeholders from across the regulatory spectrum appear genuinely committed to delivering value to patients, and that alignment is frankly a key reason why Switzerland continues to function as such an effective and responsive market at a time when certain other peer markets are encountering difficulties,” opines Stuart Head.
Bairbre Hickie, general manager at iconic Japanese drug developer Takeda, agrees. “Not only is there universal healthcare with mandatory insurance for everyone, but policymakers have implemented early access pathways and adopted a patient-first approach, which is something we really appreciate,” she affirms. “An excellent example of this is Article 71a of the Health Insurance Ordinance, a mechanism that allows patients in need to access therapies early, under certain criteria, in specific locations, which is the sort of workaround solution that other European countries should learn and benefit from,” she opines.
“The great benefit of Article 71a is it provides a route to market for treatments that are still in the development pipeline but where there is genuine unmet need,” concurs Head. As such, it enables the introduction of promising new options within the context of a supportive system that ensures that patients can receive relief promptly,” he details.
Also noteworthy is the collaborative posture of the approval, pricing, and reimbursement authorities. “Not only are the regulatory frameworks clear and stable, but the authorities are universally accessible, welcoming and collaborative, providing an excellent foundation for multi-stakeholder engagement,” reveals Alexion’s Dana Vigier.
In these aspects, even compared to the European Union’s EMA, Switzerland is in some ways ahead of the game. “We have provisions for confidential pricing and data-based assessments, tools that many European countries lack,” concedes Interpharma’s René Buholzer.
Political Tides
That being said, some market insiders fret that Switzerland’s competitive advantage of easy access is slowly being eroded. “In recent years, we have gradually been falling behind in international comparisons of timely access to new therapies. The EFPIA W.A.I.T Indicator, for instance, indicates that Switzerland is the only high-performance market registering a negative trend: basically, we’ve slipped to more or less seventh place, which brings us alarmingly close to countries with far fewer resources,” warns Buholzer.
“It’s true that the wait times for many innovative treatments are increasing a little with each passing year, but I believe the majority of the Swiss population are not yet really aware of this because the process has been gradual,” concedes Bairbre Hickie. “Despite paying high premiums for insurance, most local patients do not necessarily realise that the wait for certain treatments is longer than in some neighbouring countries,” she notes.
Some market insiders blame these changes on a tilt in political strategy towards greater emphasis on cost-efficiency. “For a while now, under the incumbent administration, we’ve been observing a shift to a cost containment approach for innovative medicines, and this trend, if allowed to continue risks slowly undermining the value and long-term stability of the system,” regrets Michele Ravara, general manager at AbbVie.
“While we appreciate that fiscal responsibility is a prerequisite for maintaining a sustainable healthcare system, it’s crucial that this doesn’t come entirely at the expense of innovation. We’ve witnessed other jurisdictions, initially known for high-quality healthcare, adopt a narrower view of medicines as a mere cost and once that happens, it’s difficult to reverse the trend and recover again so we certainly don’t want to risk Switzerland heading into that sort of negative direction,” he argues.
Nonetheless he sees it as an ominous sign that, “though last year the pharmaceutical market grew by 3.5 percent, the lion’s share of that growth derived from generics and biosimilars, with innovative medicines lagging behind.”
Much of this perceived cost cutting seems to be occurring almost by stealth. “We have a dedicated team focused on market access and pricing, yet much of their work lately has been reactive with the emphasis upon defending the reimbursement status of products that have long been in use and are still relied upon by patients and physicians alike,” laments Lewis Pearson, country manager at Viatris. “These are not obsolete treatments. They are established therapies with proven value and, in many cases, no direct alternatives exist,” he insists. “Nonetheless, they are increasingly subject to full health technology assessments (HTAs), as if their relevance and efficacy must be revalidated.”
Then there is much debate about possible shortcomings in benchmarking of the current standard of care. “We are finding that the Federal Office of Public Health (FOPH) sometimes uses outdated comparators, like 1970s chemotherapy treatments in oncology, as benchmarks. These older treatments may not accurately reflect the current standard of care. From a clinical perspective, this doesn’t make sense, as it can undervalue the true benefit of newer, more effective treatments,” remarks Ravara. “If only Switzerland were to align its pricing assessments with modern, clinically relevant comparators, it would result in a much fairer and more accurate valuation of innovative medicines,” he believes.
Others question whether the prevailing cost containment measures are strictly necessary at all. “While recurring annual savings of around CHF 1.5 billion (USD 1.85 billion) have been achieved on drug expenditure and this is presented by some policymakers as a roaring success, Switzerland is now spending less on innovative medicines as a share of GDP than the United States, despite being a wealthier country. Our prices are comparable to or below those in Germany and, in purchasing-power terms, we probably rank as the lowest in Europe,” reminds Buholzer.
“The current administration frequently resorts to reference pricing, where the sticker price of medicines is compared to the fee designated in other countries. However, the challenge here is that Switzerland possesses a very different economic context compared to many peer countries,” agrees Ravara. “With its low taxes, high salaries, and greater purchasing power, comparing Swiss prices directly to European neighbours with significantly lower salaries and taxation doesn’t always provide a fair comparison. By rebalancing to adjust for purchasing power, we could ensure that the pricing system is more equitable and reflective of Switzerland’s unique economic standing and needs,” he affirms.
Some stakeholders even take issue with the much-lauded Article 71a access pathway as they see it as symptomatic of underlying structural frailties within Switzerland’s market access model. “While Article 71a and other analogous mechanisms presently play an invaluable role in bringing care to those with unmet needs, it’s important to look beyond those pathways becoming the default process. To achieve truly equitable access and security for vulnerable groups you cannot be always depending on such fixes over the long run,” argues Carolin Hillebrand, country manager for Switzerland and regional alliance lead at Neurim Pharmaceuticals, an Israeli neuroscience drug discovery and development company that has done much to advance paediatric therapies for sleep conditions.
Regulatory Fine-Tuning
Raimund Bruhin, Executive Director of Swissmedic, the national regulator, however, sees such concerns as overblown, and points to considerable progress in fine-tuning the country’s regulatory and approval frameworks to make them fit for the future.
For a start, he believes that Swissmedic’s freshly won status as one of first three WHO-listed regulatory authorities in the world, shall reap dividends in “positioning the body as a globally-respected reference authority” which should, “in turn, open the door to further regulatory harmonization, streamlining and accelerated access.”
“Already we have been realizing much benefit from our participation in the Access Consortium which has developed into a significant international collaboration, bringing together the authorities from Switzerland, Canada, Australia, Singapore, and the United Kingdom to accelerate the approval of medicines across multiple continents,” he argues.
“For companies selecting Switzerland as their primary approval market, the Consortium now offers considerable time savings and enhanced flexibility by providing access to a broad market of over 150 million potential patients and having this kind of heft simultaneously makes us more attractive as a first-in-line launch market,” he claims.
Moreover, Bruhin stresses that, for all the conjecture about cost containment, Swiss approval timeframes still remain among the best in the world. “According to the latest statistical findings from the Center for Innovation in Regulatory Science (CIRS) which serves as the primary reference point for comparing regulatory authorities around the world, our performance actually compares favourably to the European Medicines Authority (EMA)… For standard procedures, the average approval time for new active substances last year at Swissmedic came in at 441 days, compared to 453 days at EMA, although the United States Food & Drug Administration (FDA) ranked number one with an average of just 333 days,” he reveals.
In striving to make up the gap, however, Switzerland’s regulatory and reimbursement apparatus, must upgrade their Health Technology Assessment (HTA) capabilities and better harness real-world evidence, especially with regard to the onset of advanced biologics and precision medicines such as cell and gene therapies. “The harsh reality is that our electronic patient record development significantly lags behind countries like France and Germany at the present moment. The fundamental challenge lies in our highly fragmented healthcare system, rather than a lack of political willpower or desire,” reflects EY’s Urs Indermühle.
“Switzerland is indeed highly fragmented, with 26 cantonal health authorities, which makes national-level coordination rather challenging,” adds Nasri Nahas, CEO of Lausanne-based life sciences community, Biopôle. “For common conditions, a catchment area of half a million people might suffice. But for rare or highly specific conditions, you require a critical mass of data that only national integration properly provide, especially inan era when personalised healthcare is the name of the game.”
His organisation has therefore been working hard to facilitate the development of nationwide infrastructures to render clinical and research data interoperable, and federate patient data across care facilities, including university hospitals. “The goal is to bring together clinical records, genomic data, proteomics, and much besides,” he confirms.
Nonetheless, many stakeholders retain faith in Swiss policymakers’ abilities to maintain a pragmatic balance between healthcare quality and economic viability. “Switzerland has long been regarded as a well-regulated and economically sound healthcare market, but like in many economies, we are seeing a gradual shift toward more regulation as the apparatus struggles to adapt to the demands of advances in medical science. While the framework remains comparatively liberal, the growing administrative burden does not always automatically translate into clear benefits for patients, and an element of structural reform will be required,” opines Marc Wannhoff, the CEO of Doetsch Grether, a local consumer health powerhouse that originated over one and a quarter centuries ago as a pharmacy in Basel.
“Our political structure – grounded in direct democracy – encourages consensus and collective action in identifying solutions that ultimately end up benefiting all sides. I am optimistic that the country shall manage to sustain its distinctive balance of rigour and flexibility in approval and reimbursement decision making,” he believes.
Boom time for Generics
Meanwhile, the Swiss generics market has been enjoying a much-needed shot in the arm following a radical reform of distribution margins and co-payments. Pharmacists in Switzerland were first granted substitution rights in the early 2000s, accompanied by a modest fee the first time a patient was switched from an originator to a generic. This worked reasonably well for short courses of treatment such as antibiotics or analgesics, but had little effect on long-term therapies like statins, where the incentive was paid only once and then lost its impact.
Nonetheless, “a real turning point in the fortunes of generics drug developers arrived last year following a change to the laws governing distribution margins” according to Richard Hummel, country director and general manager at Accord Healthcare, a subsidiary of India’s generic behemoth, Intas Pharmaceuticals. “Previously, prescribers and pharmacists earned more by dispensing originators, which created a structural disadvantage for generics and biosimilars. In oncology, this was particularly impactful as prices are higher than in many other therapeutic areas. By introducing a uniform margin across originators, the reform removed this disincentive and immediately boosted uptake. Generics benefited too, but the effect was most dramatic for biosimilars, where the original products are substantially more expensive,” he recounts.
This shift has also changed the nature of generics players’ interactions with healthcare professionals. “Instead of being dominated by price, conversations now focus on product benefits and features, such as the room-temperature stability of our pegfilgrastim, which reduces wastage and brings tangible advantages for both pharmacists and patients,” enthuses Hummel.
Another measure – higher co-payments for originator medicines – was simultaneously introduced. “While its effect in areas like oncology is limited, as out-of-pocket contributions are capped per year and patients with cancer typically exceed that threshold quickly. Even so, the policy plays an important educational role by reminding patients of the value of alternatives,” believes Hummel.
Thanks to these interventions, generic drugmakers have been registering a massive upswing in business performance. “In 2024, we outperformed global growth locally thanks to the 40 percent co-pay rule and equal margin system, which have effectively helped to level the playing field. These changes drove generic penetration from 64 percent to 69 percent within the space of merely a few months,” reports Alexander Salzmann, country president at Sandoz.
He now predicts a more typical long-term growth rate of around one to two percentage points annually but identifies significant new market opportunity for biosimilars. “Biosimilar penetration in Switzerland remains relatively low at about 37 percent, despite their proven efficacy and safety. The 2024 regulatory change allowing substitution at pharmacy level represents a major opportunity to improve this. Essentially, pharmacists in Switzerland can now propose a biosimilar even when the prescription specifies the originator,” he notes.
Differentiated Business Strategies
To be properly successful in the highly competitive Swiss marketplace, generics players still need to be astute with their business strategies, however, and demonstrate a large degree of differentiation.
“The retail generics market here is dominated by a few major players, leaving limited scope for new entrants. Rather than replicate what others already do well, we have chosen to concentrate our efforts on areas where we can deliver clear value to healthcare professionals – and ultimately to patients: branded products, hospital injectables, and targeted hospital generics that address unmet clinical needs,” confides Viatris’ Lewis Pearson.
Likewise, Accord has decided to eschew segments such as antibiotics, cardiovascular, or diabetes that are already well covered and highly competitive. “Unlike long-established players, we did not attempt to build a broad portfolio across every therapeutic category. Instead, oncology generics now account for the majority of our in-country business which is split evenly between hospitals and retail, and we also identify our biosimilars portfolio as an increasingly important growth lever,” reveals Hummel.
What has further distinguished the company’s strategic approach has also been a commitment to products that deliver clear value beyond cost thus reflecting the new policy landscape. “Our leading biosimilar offers stability for up to 15 days at room temperature, which is a considerable advantage in practice. Whether in hospitals or in patients’ homes, interruptions to the cold chain can lead to expensive wastage; our formulation mitigates that risk and has been widely appreciated. Another example is our parenteral cytostatics in big vial format, which reduces the workload of hospital pharmacists and lowers the amount of cytostatic-contaminated waste requiring specialised disposal. These kinds of practical innovations have strengthened our reputation as a partner attuned to real-world needs,” he proudly explains.
Sandoz, for its part, has been leveraging its strong name recognition as an iconic domestic player formerly associated with Swiss icon, Novartis, to amass scale and breadth. “We’re proud to be the second-largest pharmaceutical company in Switzerland across all categories, not only in generics and biosimilars. This strong foothold reflects our ambition to be the most attractive partner across all channels, including pharmacies, self-dispensing doctors, and hospitals,” affirms Alexander Salzmann.
“Our winning strategy centres upon maintaining an exceptionally broad portfolio, effectively becoming a one-stop shop for our partners. We’re heavily investing in our pipeline, aiming to launch generic versions of approximately 80 percent of originator small molecule products losing exclusivity, alongside biosimilars where feasible. To put this into perspective, one in every eight medicine packs dispensed in Switzerland comes from Sandoz: necessitating meticulous supply chain management, which is an area that we are confident we hold competitive advantage and can excel in,” he affirms.
Inherently Global
Despite the Swiss marketplace’s obvious triple appeal – a rich and vibrant life science ecosystem, well capitalised and efficient healthcare apparatus, and innovation-friendly regulatory framework – its inherent size constraints pose unique challenges for homegrown pharma outfits.
“Local firms ultimately have to understand and accept that their home turf, harbouring barely eight million people, doesn’t constitute a real market in the traditional sense,” warns Nasri Nahas, CEO of Biopôle, a large life science dedicated campus in Lausanne.
“For sure it offers an absolutely exceptional innovation landscape, but with such a small domestic customer base, homegrown ventures must inevitably look beyond our borders or become acquisition targets,” he opines.
“For a Swiss entity with any kind of ambition, it at some point becomes an imperative to expand beyond domestic borders,” agrees Riccardo Braglia, executive chairman of Helsinn, a Ticino-based pharma business that originally specialised in supportive cancer care. He recalls that that his own family-owned and run company was compelled to do this from a very early stage. “The Swiss marketplace while certainly stable and reliable in terms of revenue generation, was simply not commercially significant enough on its own in our sector, so we were forced to broaden our horizons very quickly,” he recounts.
Thankfully, the ‘developed in Switzerland’ epithet confers considerable advantage when taking brands abroad. “Switzerland’s well engrained reputation for quality and manufacturing precision offers a strong foundation for maintaining credibility across global markets,” affirms Olga Lamua Olivar, general manager of Medovina AG, an eight-decade-old business that originated in Zurich and is busy building a full-cycle women’s health portfolio from menarche to menopause. “We’ve found our domestic market to be an environment that comprehensively supports not only our aspired operational standards but also the trust and confidence we have cultivated with long-standing partners,” she adds.
Such views are shared by Roch Ogier, CEO of OM Pharma which has maintained a presence in Geneva since 1937 and whose portfolio centres on bacterial lysates addressing respiratory and urinary tract infection prevention. “Switzerland provides critical quality perception benefits. When we engage with markets in China, Latin America, and other regions, Swiss origin conveys premium quality associations, particularly crucial for biotechnology products manufactured from pathogenic bacteria,” he concedes.
When it comes to the actual mechanics of how best to spread their wings, most homespun Swiss pharma firms appear to be pursuing a variety of different strategies, however. “IBSA’s international expansion has been guided by a clear principle: to grow progressively, with discipline and intention. Rather than pursuing aggressive, capital-intensive scale, we have taken a stepwise approach, beginning in Europe and extending to the US, markets that share regulatory similarities and where collaboration is more immediately accessible,” reveals Luca Crippa, Chief Commercial Officer and Chairman of the Executive Committee, when tracing the company’s evolution from modest Swiss laboratory into global pharmaceutical group. “Meanwhile, in other regions such as Asia, Latin America, and the Middle East, we have opted to work through trusted local distributors who possess the insight, infrastructure, and relationships essential for long-term success, rather than go it alone,” he confirms.
Medovina AG, for its part, operates through two distinct commercial platforms. “One-third of our business constitutes business-to-consumer channel which extends into the Asia-Pacific region via DKSH, our parent company. Through this presence, we market our proprietary products in 15 countries, from Malaysia to Australia,” explains Olivar.
“The remaining two thirds is our export-driven business-to-business channel, in which we collaborate with strong, established local partners – our so-called local heroes’ – in markets where we do not operate directly. Many of these partners are large multinational companies with proven expertise in women’s health,” she elaborates.
Helsinn, by contrast, chose to target its expansion efforts on the notoriously difficult but high value markets of the United States, Japan and China. “Rather than initially pursuing neighbouring European countries, we chose to take a bold step by entering the United States. through the acquisition of a small biotech firm. Although the decision proved strategically sound, the reality of operating in the United States has been consistently demanding. The complexities of distribution channels, hospital networks, and promotional frameworks continue to pose challenges,” admits Braglia, while adding that “nonetheless , Helsinn’s long-term presence there has elevated the group’s visibility and contributed meaningfully to its global positioning.”
He confides that “initial attempts to enter Japan were met with setbacks, largely due to underperforming partnerships until we re-engaged the market with a more disciplined strategy” revolving around successful alliances with renowned Japanese drugmakers Taiho and Ono Pharmaceuticals respectively, whereas Helsinn’s entry into China was “driven much more by regulatory necessity than commercial ambition.”
