“Ticking time bomb”: why the generic drug lobby demands a minimum price for medicines

The drug Marcoumar is a blood thinner that 50,000 patients in Switzerland take every day. Anyone who has ever had a heart attack or suffered from atrial fibrillation relies on the drug to prevent blood clots.

A pack of 100 of the drug costs 19.25 francs in the pharmacy. The manufacturer receives 9.60 francs, the so-called factory price. That’s 9.6 cents per tablet.

This cheap pill reduces healthcare costs and is gentle on patients’ wallets. Nevertheless, the preparation for Lucas Schalch is an impressive example of what goes wrong on the price front of already cheap medicines.

“Over the past ten years, the Federal Office of Public Health has reduced the price of Marcoumar by more than 50 percent. Almost no manufacturer is willing to supply the product at this price,” says the director of the Intergenerika Association. Marcoumar has been experiencing a supply bottleneck since August last year. According to the Federal Office for National Economic Supply, it is currently “available for limited supply.”

For Lucas Schalch, there is a direct connection between falling prices and the current supply shortages at Marcoumar: “With its current pricing policy, the federal government actually wants to reduce healthcare costs. In fact, it drives up costs. It continually lowers the prices of already very cheap medicines and therefore causes supply bottlenecks,” says Schalch. This can be seen again with the heart medicine Marcoumar: Until it is available in sufficient quantities, doctors often have no choice but to prescribe more expensive alternative products.

Rising costs and declining quality of care are not the only problem. In the longer term, a persistent supply crisis could have far-reaching consequences. The list of antibiotics that cannot be supplied is constantly growing. Because doctors have to switch to broad-spectrum antibiotics, the risk of resistance increases. Price also plays a role here. Daniel Roth, head of the pharmaceutical company A. Menarini, recently said this to CH Media:

The mechanism that Schalch criticizes works as follows: Every year, the BAG checks every third medicine on the so-called specialty list to see whether the current price is still justified. All preparations on the list are reimbursed by health insurers as part of the mandatory basic insurance.

In a three-year cycle, officials evaluate each drug for effectiveness, usefulness and cost-effectiveness. Last year, the federal government reduced the prices of approximately 60 percent of the preparations analyzed by ten percent. This should result in savings of approximately 120 million francs.

The Intergenerika Association is now calling for a move away from this rigid mechanism. He questions minimum prices for low-priced medicines. Because every year the federal government also reduces reimbursements for medicines that are already quite cheap in its revision. “The downward price spiral must end. This puts our supply at risk.” says Schalch.

Such a price ceiling could soon be possible. Parliament is currently discussing a differentiated study into the three categories of effectiveness, expediency and cost-effectiveness. If this passage passes, the federal government would have more leeway. When asked, the BAG writes: “There would then be the possibility of refraining from a review of the economic viability or a price reduction of medicines that meet certain criteria and are relevant for an adequate supply of the Swiss population,” says spokeswoman Gabriela Giacometti . Once the legal basis is available, the criteria can be established.

The Federal Office for Public Health shows a certain willingness to negotiate. It recognizes “that for medicinal products whose ex-factory prices are already very low, price reductions would make sales unprofitable for the marketing authorization holder”. In such cases it makes sense to refrain from further price reductions.

For the new cabinet led by Federal Councilor Elisabeth Baume-Schneider (SP), the price debate remains a balancing act. The country faces the task of curbing the explosion in healthcare costs. And to do this, it imposes price discounts on drug manufacturers. Because price comparisons regularly show that generic medicines in this country cost twice as much as abroad, the BAG is also pushing for cost savings here.

At the same time, the federal government wants to promote the sale of such copycat drugs. Anyone who has insisted on the original medicine since the beginning of this year has had to pay 40 percent of the price themselves. The association Intergenerika, which represents manufacturers such as Sandoz and Mepha, estimates the annual relief from their counterfeit drugs at 700 million francs. The additional potential amounts to another 300 million francs.

The Minister of Health faces a dilemma: If the country accepts minimum prices for generic drugs, premium payers will continue to pay significantly more for them than abroad. In return, at least that’s what manufacturers promise, the supply crisis could be alleviated. On the other hand, if Baume-Schneider jettisons minimum prices, costs will fall. Meanwhile, the price spiral continues downwards – and the list of unavailable medicines could become longer and longer. (aargauerzeitung.ch)