Senso customer magazine
Issues in 2015
Why is our medication so expensive?
Medication in Switzerland is often many times more expensive than abroad. If we were to bring prices into line with other European countries, we could save millions. However, it isn't that simple. We explain why medication costs so much in Switzerland and how to get it at a lower price.
I. How does the price of a medication actually get set?
The price which you pay as a consumer for a medication covered by statutory health insurance is set by the Federal Office of Public Health (FOPH). This is made up of the ex-factory price, the sales and marketing portion of the overall cost and the applicable VAT. To set the ex-factory price, a price comparison is made with other countries (9-country shopping basket) and a therapeutic cross-comparison is performed with a similar product which is already covered by health insurance. An innovation surcharge may also be imposed.
II. We pay significantly more for medication here in Switzerland than abroad. Why is that so?
In 2014, about 5.8 billion francs were spent on medication in Switzerland under basic insurance. If prices were brought into line with those of other European countries, we could save millions. However, the health insurers are not the ones who set the prices – the government does. The Swiss medication market is highly regulated. The FOPH checks the Swiss shop price every three years based on a reference country basket. During this process, the authority compares the ex-factory prices of nine European countries. However, when comparing prices, the statutory discounts should also be taken into account, such as in the case of Germany where reductions are granted on the list price. Nevertheless, the Swiss authorities do not include the discounts in the price calculation. It is therefore entirely possible that a medication in one of these countries is much cheaper than in Switzerland.
III. Why is medication not getting any cheaper in spite of the weak euro?
The FOPH checks every three years to see if a medication is still cost-effective and the price is in line with international markets. The average monthly rate of the Swiss National Bank (SNB) for the last 12 months is used to convert the foreign prices. It currently stands at 1.12 francs per euro, but the medication on the specialities list is largely still valued based on a higher exchange rate. That is the reason why the SNB's decision to abandon its currency peg on 15 January did not immediately have any impact on prices. According to estimates, several hundred million francs could be saved with the current exchange rate of about 1.10 francs per euro. However, this can only be achieved if current practice is reviewed. Instead of merely adjusting some preparations gradually to the current price level, all medication should be checked every year.
IV. How high are the healthcare costs and what proportion thereof is attributable to medication?
In 2013, the Swiss healthcare system generated costs to the tune of about 69 billion francs. That equated to approximately 11 percent of GDP. The biggest proportion thereof, roughly 40 percent, was spent on compulsory health insurance. The government and private households each bore 20 percent of costs. The remaining 20 percent were divided up between private insurers and other social insurance companies. The proportion of medication within compulsory health insurance amounted to 5.8 billion francs which corresponds to about 9 percent of the total costs generated by the Swiss healthcare system.
V. What effect does a fixed-fee model have on medication prices?
Germany has had a fixed-fee model since 1989. These fixed fees constitute maximum price limits up to which health insurers assume the costs of a prescribed medication. If a customer insists on a more expensive medication, they have to pay the difference themselves. An exception applies to medically indicated cases in which the doctor explicitly prescribes a more expensive preparation. On the one hand, the fixed-fee model means that many pharmaceutical manufacturers reduce the prices of their medication to the set price in order to remain competitive. Patients are increasingly asking for medication which is completely covered by the health insurers. The fixed-fee model has proven to be an effective way of cutting costs abroad.
VI. How do I get my prescribed medication efficiently and at a low cost?
If you would like to purchase medication prescribed by your doctor from a pharmacy, give the pharmacist your insurance card in addition to the prescription. In this way, you can purchase the medication without using cash. The pharmacy charges the costs to us electronically and directly at a later date. We then only invoice you for your share of the costs. You can also discretely and cheaply purchase your medically prescribed medication via a mail-order pharmacy. Helsana cooperates with the following four established mail-order pharmacies: MediService, xtrapharm, Zur Rose and Rothaus Direct.
VII. Can I compare medication prices?
Yes, this option is available to you. The medication authorised in Switzerland and covered by statutory health insurance can be quickly and easily compared on the Mymedi.ch online platform. To that end, you simply enter the active ingredient or the name of the preparation in the dialogue box and confirm by pressing enter. The tool subsequently lists the prices of the original preparation and the corresponding generic medication. The associated potential savings are specified right next to the sales price. Mymedi.ch is independent and obtains the data from the official publications of the Swiss Agency for Therapeutic Products, the FOPH and the checked and officially authorised package information leaflets.
VIII. Why should I use generic medication?
It is as effective as the original preparation. It contains the same active ingredients as the original, but it is cheaper. As a policyholder, you only pay the standard excess for generic medication, i.e. 10 percent, but in some cases 20 percent for the original medication. More and more companies now produce the generic medication in addition to the original preparation. An example: Sortis, a widely used original medication used to lower the blood cholesterol level, costs 150.15 francs. The generic medication from the same company costs 76.25 francs, and the cheapest generic medication only costs 68.80 francs. The policyholder pays an excess of 20 percent at Sortis, which corresponds to 30 francs. On the other hand, the policyholder only pays 6.90 francs for the cheapest generic medication, which corresponds to an excess of 10 percent Generic medication contributes significantly to curbing costs in the healthcare system – and it does so without any loss of therapeutic effect. Estimates suggest that this could potentially save about 400 million francs per annum. There are also imitation products for biopharmaceuticals. They are called biosimilars and are also cheaper than the original.
IX. What size package should I buy?
The most expensive medication is one you don't use and store at home before throwing it out unused once the expiry date has passed. For this reason, it is advisable not to stock up on medication. Anyone who needs to take medication over an extended period should preferably buy large packages. These are generally cheaper than smaller packages per tablet and daily dose. If treatment is only provided over a short period, small packages with fewer tablets are a better option. As a rule, the doctor prescribes a small package of the preparation at the beginning of a course of therapy, in order to see how effective the medication is for you and how well you tolerate it.
Text: Andrea Hohendahl