Healthcare System in Switzerland| Drug pricing and reimbursement | iPharmaCenter
- Badari Andukuri
- Mar 9
- 4 min read
Updated: Mar 9
Overview of Switzerland Healthcare System
Switzerland has an effective healthcare system and is considered as a mandatory private social health insurance system. The Health Insurance Act (HIA) makes it mandatory for citizens to buy health insurance. The Federal and the Cantonal governments provide the subsidy to low-income individuals.
The administration of the healthcare is divided at federal, cantonal and at municipal levels.
In Switzerland healthcare, cantonal bodies play a major role.
Federal government responsibilities: It is responsible for financing. The revenues are obtained from mandatory health insurance and other social insurances. It is also responsible for maintaining the quality and safety of pharmaceuticals and medical devices, encouraging the research.
Cantonal bodies: There are 26 cantons in Switzerland which are responsible for licensing providers, coordinating the hospital services and providing the subsidy for premiums.
Municipalities: They are responsible for long terms of care and other supporting systems.
The funding for healthcare is through private insurance
Decision makers of Switzerland Healthcare System
Federal council: It consists of 7 members. They are elected by United Federal Assembly and their term is 4 years.
Federal Department of Home Affairs: Federal Councilor is the head of the FDHA. It is responsible for the Swissmedic/Swiss Agency for Therapeutic Products (SATP), public health and social insurance.
Federal Office of Public Health: It is part of the Federal Department of Home Affairs and has key responsibilities including
The final decision for pricing and reimbursement
Health system regulation
Regulates the distribution margin between wholesalers and pharmacies
How new medicines reach patients in Switzerland?
In Switzerland, a medicine must clear two main hurdles before it becomes both marketable and reimbursable under compulsory health insurance.
First, Swissmedic reviews the product and may grant marketing authorization. Second, the Federal Office of Public Health (FOPH) decides whether the medicine belongs on the List of Pharmaceutical Specialties (SL), which determines if and how it is reimbursed by basic health insurance.
Role of Swissmedic and the FOPH
Swissmedic evaluates the quality, safety, and efficacy of new medicines and issues marketing authorisations.
Only after this step can the FOPH assess whether a product should be reimbursed through the SL.
Inclusion in the SL requires a positive judgment on medical value and an agreement on a maximum reimbursable price.
What is the drug pricing and reimbursement process in Switzerland?
The SL is the core reimbursement list for outpatient medicines that are paid for by compulsory health insurance.
When deciding whether a product should be listed, the FOPH typically considers three overarching dimensions (often abbreviated as EAE):
Effectiveness: Does the medicine offer clinically meaningful benefit for the approved indication?
Appropriateness: Is the therapy suitable and consistent with accepted medical practice and treatment guidelines?
Economic efficiency: Is the cost justified in relation to the therapeutic benefit and available alternatives?
How Switzerland sets medicine prices?
When a product is added to the SL, the FOPH sets a maximum reimbursable price for basic health insurance. To do this, it relies on two main reference mechanisms.
Internal reference pricing: The medicine is compared with other reimbursed treatments for the same indication, looking at therapeutic benefit and current prices in Switzerland.
External reference pricing: The FOPH benchmarks the price of the same medicine against prices in a defined group of European countries.
On top of that, conditions or restrictions (for example, limitation to specific patient groups, mandatory outcome documentation, or time‑limited listing) can be applied to ensure that the criteria of effectiveness, appropriateness, and economic efficiency remain fulfilled over time.
What is the impact of medicine costs on health insurance premiums?
Spending on outpatient medicines represents a sizeable share of total basic health insurance expenditure in Switzerland. When high‑priced, innovative medicines are added to the SL, aggregate drug spending can rise faster than other cost components. Since insurance premiums largely follow underlying healthcare costs, rapid growth in drug expenditure exerts upward pressure on the premiums paid by insured persons.
How to get access to not‑yet‑approved or not‑listed medicines in Switzerland?
In exceptional situations, a patient may urgently need a life‑saving treatment that is not yet authorised by Swissmedic or not yet listed on the SL. In such cases, Switzerland allows case‑by‑case reimbursement pathways. Under defined conditions, health insurers can cover the cost for individual patients even when the product is not generally reimbursed. This mechanism aims to prevent avoidable delays in access to therapies for serious or life‑threatening diseases.
Why reimbursement negotiations can take time in Switzerland?
Even though the formal processing times of Swissmedic and the FOPH are often comparable with other European regulators, patients and clinicians may still experience delays before a medicine is effectively reimbursed. Several factors contribute:
Companies sometimes file for authorisation and reimbursement in Switzerland later than in larger markets, given the smaller population and commercial volume.
For rare diseases, where patient numbers are limited, firms may focus even more on large jurisdictions first.
Pricing negotiations can be protracted if the initial price expectations of the manufacturer are substantially higher than what the authorities consider compatible with economic efficiency.
Also read: Roche's petrelintide showed benefits but early results show inferior benefits over Lilly's eloralintide
What are the ongoing reforms to improve pricing and access?
Switzerland is in the process of updating its rules and processes to better balance rapid access to medicines with financial sustainability:
New measures allow reimbursement of certain medicines to start as soon as Swissmedic approves them, under defined conditions, so that coverage can begin at the earliest possible moment.
Parliament has adopted cost‑containment packages that foresee a modernisation of price‑setting rules, more flexible models (such as outcome‑based or time‑limited agreements), and additional tools to keep expenditure under control while preserving access.
The FOPH is working with stakeholders from the pharmaceutical industry and health insurers to implement these changes in regulations and ordinances.
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