Swiss Healthcare and Pharmaceutical Market 2014

2014

Swiss Healthcare and Pharmaceutical Market

Editor’s notice 1st edition, published in 2014 by

Interpharma Association of research-based pharmaceutical companies in Switzerland Petersgraben 35 P.O. Box 4009 Basel Phone: 061 264 34 00 Email: info@interpharma.ch The content of the brochure can also be found on the website of Interpharma at www.interpharma.ch.

Readers are free to download and use the charts in their latest version for their own purposes provided the sources are properly quoted.

Interpharma editorial team: Samuel Enderli, Sara Käch, Carolin Lorber, Heiner Sandmeier Cover picture: © Getty Images

© Interpharma, 2014 Basel Copying of the brochure is encouraged provided the sources are duly quoted.

Swiss Healthcare and Pharmaceutical Market 2014

Contents Public Health The Swiss healthcare system . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Life expectancy in Switzerland and other countries . . . . . . . . . 11 The two main causes of death . . . . . . . . . . . . . . . . . . . . . . . . . 13 Deaths caused by cancer . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Comparison of cancer survival rates in Europe . . . . . . . . . . . . 17 Resources in health service . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Healthcare costs broken down by services . . . . . . . . . . . . . . . 21 Cost of healthcare according to services . . . . . . . . . . . . . . . . . 23 Healthcare costs by international standards . . . . . . . . . . . . . . . 25 Funding streams in the health system . . . . . . . . . . . . . . . . . . . 27 Price indices of healthcare . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 Health insurers: number of people insured and forms of insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 Benefits of mandatory health insurance by cost category. . . . . 33 Public Opinion Satisfaction with the health service . . . . . . . . . . . . . . . . . . . . . 35 Attitude towards cost-cutting measures . . . . . . . . . . . . . . . . . . 37 Pharmaceutical Market Pharmaceutical market in Switzerland . . . . . . . . . . . . . . . . . . .

Pharmaceutical market by reimbursability . . . . . . . . . . . . . . . .

Generics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Sales outlets by turnover and inventory . . . . . . . . . . . . . . . . . .

Biotech and gene tech products . . . . . . . . . . . . . . . . . . . . . . .

Market share of medicines by indication area. . . . . . . . . . . . . .

Market share of foreign companies . . . . . . . . . . . . . . . . . . . . .

Approval of medicines / number of approved medicines . . . . . .

2

39 41 43 45 47 49 51 53

Medicines in the Specialties List (SL) . . . . . . . . . . . . . . . . . . . .

Composition of the price of a medicine . . . . . . . . . . . . . . . . . .

Prices of medicines: foreign-price comparison . . . . . . . . . . . . .

Price comparisons of European states . . . . . . . . . . . . . . . . . . .

Switzerland as reference country . . . . . . . . . . . . . . . . . . . . . . .

Economic Impact Trade balance of pharmaceutical products . . . . . . . . . . . . . . .

Pharmaceutical trade balance compared with other countries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Workplace productivity and employees in the pharmaceutical industry / overall economy . . . . . . . . . . .

Key figures of Interpharma companies in Switzerland . . . . . . .

Key figures of Interpharma companies worldwide . . . . . . . . . .

Interpharma companies: spending on R&D worldwide and sales, research and exports in Switzerland. . . .

Swiss innovation system compared with other countries . . . . .

Research and Development Pharmaceutical patents at the European Patent Office. . . . . . .

Funding of R&D in Switzerland . . . . . . . . . . . . . . . . . . . . . . . . .

Scientific impact by country. . . . . . . . . . . . . . . . . . . . . . . . . . .

Laboratory animal statistics . . . . . . . . . . . . . . . . . . . . . . . . . . .

Clinical research in Switzerland . . . . . . . . . . . . . . . . . . . . . . . .

55 57 59 61 63

64 67 69 71 72 74 77

79 81 83 85 87

Appendix Important contact addresses for further information . . . . . . . . 88

3

Public Health The Swiss healthcare system Governance of the health system Switzerland is characterized by a highly federalist structure with its federal government, cantons and communes or municipalities, which are each responsible for different functions. The principle of subsidiarity also plays an important role, according to which public services that can be provided at a given political level should not be undertaken at a higher level or instance. Consequently the federal level is comparatively lean.

Responsibility for the provision and funding of healthcare lies mainly with the 26 cantons, also in fields that are regulated by the federal government. Therefore, the federal state’s competencies are limited. The cantons maintain and, together with the mandatory health insurance, co-finance hospitals and nursing homes, which they also supervise. Most hospitals are owned or controlled by cantons and municipalities. The cantons secure healthcare by means of hospital planning, emergency and rescue services.

Together with the federal government and local municipalities, they are responsible for prevention and the promotion of health.

The cantons also monitor licensing for medical and paramedical professions and finance the training of doctors through the cantonal universities. Furthermore, they assess and adjust premium reductions for economically vulnerable persons. At cantonal level, the cantons can autonomously implement and enforce the laws and ordinances enacted by the federal government. The federal provisions are partly supplemented by cantonal implementation laws. The cantons have autonomy in the implementation and 4

enforcement of the law. Responsibility for this implementation lies with the health ministers, who are members of the cantonal executive. The health ministers of all the cantons together form the Swiss Conference of the Cantonal Ministers of Public Health (GDK) that promotes cooperation and common policies between cantons. However, it is not a deliberative body but largely a forum that seeks to facilitate consensus building. The conference and the Health Minister at federal level regularly meet within the framework of the permanent platform of the Swiss National Policy Dialogue for Health and discuss health policy issues.

At federal level, the Federal Council (the executive) and Parliament (the legislative) draw up and enact laws and ordinances that are later to be implemented by the cantons. Together with the latter, the Federal Office of Public Health (FOPH), which is attached to the Federal Department of Home Affairs (FDHA), is responsible for the development of national health policy. The responsibilities of the FOPH also cover, for example, the supervision of mandatory health insurance and decisions on the reimbursement and the prices of medicines. The control and monitoring of epidemics and infectious diseases as well as the monitoring of research in humans also fall within its remit. A further function of the FOPH lies in the area of prevention and efforts to combat addiction. It also regulates university medical and healthcare professions. It also represents the health policy interests of Switzerland on international bodies and vis-Ă -vis other states.

5

The 2,300 or so municipalities implement responsibilities delegated by cantons, e.g. the provision of nursing and home care (Spitex).

They do this either alone or – depending on their size – in conjunction with other municipalities. They are also partially involved in federal and cantonal prevention activities.

Financing healthcare In Switzerland, mandatory health insurance, the basic social insurance, is regulated by the Health Insurance Act (LAMal), which came into force in 1996. The basic principle consists in guaranteeing that all persons resident in Switzerland have access to good medical care. In the event of an illness, the basic health insurance ensures that the cost of medical treatment is covered. Since 1996 everyone living in Switzerland has been required to conclude a basic health insurance. Everyone is individually insured and is free to choose his or her health insurer from around 60 privately organized health insurers that offer basic insurance coverage. The health insurers have to accept everyone regardless of health and age. Monthly per capita premiums are payable for all persons. The level of the premium depends on where the person lives and also differs from one health insurer to another, but within these differences the level is the same for each age group and for both sexes.

The premiums are also not dependent on income. The insured persons pay all their premiums themselves. There are no employer contributions. Economically vulnerable people can request a premium reduction, which is paid by the Federation and the canton in which they live. Besides the basic health insurance, cantons co-finance hospital and nursing home costs. These two payers account for the majority of healthcare expenditure, but also outof-pocket costs – either through cost-sharing or directly from a person, e.g. for non-reimbursed medicines – contribute signifi6

cantly to the health system. All services (incl. medicines) included in the catalogue of benefits are fully covered by the mandatory health insurance and are subject to a co-insurance of 10% with an annual cap.

The catalogue of benefits covered by the mandatory insurance is quite extensive by comparison with other countries: The insurance covers most outpatient and inpatient procedures, maternity benefits and those medicines that the FOPH includes in the so-called Specialties List (SL). Procedures and methods used in complementary medicine are also covered to some extent. The insurers may offer different models (HMO, Managed Care etc.). Insured persons have a wide choice at their disposal with regard to the deductible and have the option every year of changing their health insurer or the insurance model or deductible within their insurance.

Supplementary health insurance plans also exist. They can be concluded on a voluntary basis and cover benefits that are not covered by the mandatory insurance. Since the benefits catalogue of mandatory health insurance is very comprehensive, however, supplementary health insurance plans primarily cover benefits regarding greater freedom for example in the choice of doctor or hospital or certain methods used in complementary medicine.

Top-up insurance of this kind is usually offered by insurers that also offer mandatory insurance.

Delivering health services The Swiss healthcare system allows patients to see a specialist directly (free choice of doctor). But normally the family doctor or general practitioner (GP) is the first point of contact when there are medical problems. If the GP cannot treat the disease, the patient is referred to a specialist and/or a hospital. Specialists work both in 7

their own private practices and also in hospitals. In most cantons, both are allowed to dispense medicines themselves from their own practice-based pharmacy. In other cantons, prescription medicines can only be obtained in pharmacies on medical prescription.

Since 2012, all patients in Switzerland have been free to choose their hospital. The hospitals are financed both by the cantons and by the mandatory health insurance. By comparison with other countries, the separation of hospitals into an inpatient and an outpatient section occupies a special position. In the outpatient section treatments are fully covered by the mandatory insurance. In the case of inpatient hospital treatments, however, 45% of costs are covered by the mandatory insurance and 55% by the cantons.

Since 2012 these treatments are financed via case-based payments according to diagnostic related groups (DRG) that also include the cost of medicines as well as diagnostic and therapeutic services, unless otherwise negotiated. Most hospital doctors and health professionals are salaried, whereas GPs and specialist doctors working in ambulatory care settings are paid on a fee-for-service basis.

Approval of medicines Since Switzerland is not a member of the European Union, it has its own drug regulatory authority and is not affiliated to the European Medicines Agency (EMA). The Swiss agency Swissmedic is responsible for the approval of new medicines and for monitoring of the pharmaceutical market in Switzerland. Swissmedic works closely with foreign agencies. Medicines are not automatically covered by the mandatory insurance once marketing authorization has been granted. Before reimbursement is possible, pharmaceutical companies first have to apply to the FOPH for inclusion in the 8

SL and to provide evidence that the medicines are effective, suitable and efficient. Prices are determined by means of therapeutic referencing and a comparison with prices in other countries. Once medicines have been included in the SL, prices are reviewed every three years. For non-reimbursed medicines, companies are free to price their medicines as they wish.

9

Highest life expectancy worldwide In Switzerland, life expectancy at birth is more than 82 years for the overall population. In no other OECD country is the life expectancy higher.

The average life expectancy of a newborn infant in Switzerland has steadily increased since the beginning of the last century. It is thanks to improved hygiene, a higher standard of living and good-quality healthcare that we have seen such a marked increase. In 2012 life expectancy at birth stood at 84.7 years for women and 80.5 years for men. The difference between female and male life expectancy that widened in the second half of the 20th century has narrowed in the last few years. At the beginning of the 1990s, life expectancy for women was still above seven years longer than for men. After this, male life expectancy rose more steeply than female life expectancy, resulting in a narrower difference between the sexes. In 2012 this difference was around four years.

10

Life expectancy compared with other countries Life expectancy of total population at birth (in years), 2011

78

82.8 82.7 82.7 82.2 81.9 81.3 81.1 81.1 80.8 79.9 78.7

79

80

81

82

83

© Interpharma

CH IT JP FR SE NL AT GB DE DK US

Source: OECD Health Data 2013.

Mean life expectancy at birth In years 85

84.7

80

80.5

70 60

45 1900 Men

1920

1940

1960

1980

© Interpharma

50 2000 2012

Women

Source: Swiss Statistical Encyclopedia, Federal Statistical Office, 2013.

11

Most common causes of death: Diseases of the circulatory system and cancer Diseases of the circulatory system (ischemic heart disease, cerebrovascular diseases, etc.) are the most common cause of death in Switzerland, followed by cancer. In some comparative countries, such as Denmark, the Netherlands, France and Japan, the exact reverse is the case. In 2011, 232 of 100,000 people in Switzerland died of a disease of the circulatory system. This mortality rate is almost half what it was in 1990. In the other comparative countries, similar levels of decline have been reported. This is due amongst other things to innovative medicines and a healthier lifestyle.

In the case of cancer, the number of deaths has likewise fallen in the last 20 years, albeit less sharply than in the case of cardio­ vascular disease. In 2011, 181 of 100,000 people in Switzerland died of cancer. In 1990, there were over 28% more deaths from cancer. This marked decrease is the biggest reduction seen in all the comparative countries. The reason for the decrease is to be found in better, modern treatment options and – in many types of cancer – early diagnosis of disease, which increase the chances of a cure.

12

The two main causes of death Deaths per 100,000 population (standardized rates) 2011 or nearest year available AT DE SE¹ US¹ IT¹ GB¹ CH¹ NL DK FR² JP

598.7 607.9 517.6 479.8 469.3 523.8 447.9 432.7 544.7

293.0 241.9 279.6 237.6 280.7 226.3 254.2 211.9 259.2 207.1 257.4 205 259.3 202.4 250.2 193.6 215.1 189.1 207.9 183.9 253.5 181.5

100

200

300

n Diseases of the circulatory system 2011 n Diseases of the circulatory system 1990

400

500

600

700

n Cancer 2011 n Cancer 1990

Source: OECD Health Data 2013.

¹ 2010 data. ² 2009 data.

13

© Interpharma

DK NL GB¹ FR² IT¹ DE AT US¹ SE¹ JP CH¹ 0

314.4 310.2 209.8 261.2 256.0 248.7 232.3 217.2 211.9 184.6 314.6 170.7 349.2

Cancer as second most common cause of death In Switzerland, cancer is the second most common cause of death. The mortality rate varies from one type of cancer to an­­­other. Internationally there are considerable differences in cancer mortality, both overall and also between different types of cancer.

On the one hand this may be related to the prevailing living conditions that either favor or tend to prevent certain types of cancer.

On the other hand, however, prevention, early diagnosis and access to modern treatment, such as antibody therapies, also play an important role.

Marked differences in mortality are apparent over time. In breast cancer, for example, the mortality rate in 1990 stood at 44.8 of 100,000 women. It had thus decreased by 36% in 2010. In the framework of early detection programmes for breast cancer, the cost of mammography screening in Switzerland has been covered by health insurers since 2009, provided the investigation is carried out as part of a programme with quality assurance and in women with an increased risk for breast cancer in the family history. Until now, mammography programmes have been introduced in Cantons Bern, Basel-Stadt, Fribourg, Geneva, Graubünden, Jura (includ­ing the Bernese Jura), Neuchâtel, St. Gallen, Thurgau, Vaud and ­Valais. In all other cantons mammography screening is done in consultation with the doctor.

14

Deaths caused by cancer Deaths per 100,000 population (standardised rates)¹, 2011 or nearest year available NL DK US³ GB³ FR² IT³ DE AT CH³ JP SE³

57.8 55.9 53.7 50.4 42.5 42.1 41.0 37.2 35.6 35.5 31.7

DK SE³ CH³ GB³ NL FR² AT DE US³ IT³ JP

49.9 49.7 40.8 37.3 36.3 31.6 31.4 31.3 24.8 23.3 13.9

DK NL GB³ DE FR² CH³ IT³ AT US³ SE³ JP

34.7 32.8 30.4 30.0 28.8 28.3 27.5 26.0 24.5 23.2

10

20

30

40

50

60

n Respiratory organs n Prostate n Breast Source: OECD Health Data 2013.

¹ In prostate and breast cancer the rates refer to 100,000 men and women respectively. ² 2009 data. ³ 2010 data.

15

© Interpharma

14.2

0

Differences in access to innovative cancer treatments Thanks to new diagnostic opportunities and medicines such as modern antibody treatments, cancer in many cases today can be diagnosed earlier, treated better or even cured altogether.

In Europe, there are substantial differences in access to new cancer treatments and in waiting times for new medicines. This has an impact on the survival rate of cancer patients, because prompt access to new treatment options and medicines is important for the success of treatment in cancer. Thus the relative 5-year s足 urvival rate is much higher for many types of cancer in Switzerland than it is in other European countries. These rates are lower particularly in East European countries such as Poland.

The relative 5-year survival rate indicates the mortality of people with cancer compared with the mortality of people without cancer.

This measure thus takes into account the fact that only part of the mortality among cancer patients is attributable to cancer, because a certain mortality is also to be expected among people without cancer. A value of 100% means that mortality in people with 足c ancer is just as high as mortality in people without cancer. A rate of 61% as in the case of colorectal cancer in Switzerland is thus to be understood as showing that the proportion of people with colorectal cancer surviving for five years after diagnosis corres足 ponds to 61% of the expected proportion of survivors in the total population without colorectal cancer. The likelihood of people with cancer still being alive five years after diagnosis is reduced by 39% compared with the population without cancer.

16

Comparison of cancer survival rates in Europe Relative 5-year survival rates (in %)

FR SE IT CH NL DE AT DK GB PL

86.1 86.0 85.5 84.6 84.5 83.6 82.1 81.5 79.3 71.6

DE CH AT SE IT FR NL DK GB PL IT CH DE AT FR SE NL GB DK PL

32.4 31.6 31.3 31.0 26.3 21.7 20.4 17.0 16.0 15.6

0

n Breast cancer

20

40

60

80

100

n Colorectal cancer n Stomach cancer

Source: Cancer survival in Europe 1999–2007 by country and age: results of EUROCARE-5 – a population-based study, Roberta De Angelis et al., The Lancet Oncology, Volume 15(1), 2014.

17

© Interpharma

62.2 61.4 61.2 61.1 60.8 59.7 58.1 53.6 51.3 46.7

Healthcare industry as a major employer In Switzerland, around 351,000 people work in the healthcare industry, including the pharmaceutical sector. This is around one in twelve of the working population. Overall, Switzerland has a well-equipped healthcare system, although there are regional 足 differ足ences in the healthcare provided. For example, certain rural regions suffer from a shortage of doctors, while in the urban centres there tends to be a surfeit of general practitioners and specialists. There is also a very high density of small hospitals, which offer little specialization and a wide range of medical services.

By comparison with other countries, there are differences in the structure of medical care. Switzerland has a relatively low density of general practitioners compared with neighbouring countries: for every million inhabitants in Switzerland there are only 1,056 g 足 eneral practitioners, whereas there are far more in Austria, France and Germany. Since doctors are also allowed to dispense medicines directly in many cantons of Switzerland, the density of pharmacies is comparatively low.

18

Resources in health service Per million inhabitants, 2011 (or next available year) AT

Practicing dentists Hospitals Practicing pharmacists

CH

DE

FR

IT

UK

US

1,594 1,056 1,600 1,612

971

805

299

2,421 2,159 2,223 1,797 3,174 1,940 2,165 564

521

801

657

–

32

38

40

41

19

693

532

619

1,100

–

528

– 19

665

–

Source: OECD Health Data 2013, conversion in relation to population by Interpharma.

19

© Interpharma

General medical practitioner Specialist medical practitioner

Medicines as a proportion of healthcare costs: 9.2% While Switzerland has one of the most expensive healthcare 足systems in the world, it also offers high-quality outcomes. The cost of the healthcare system has increased by 5.3% compared with 2011 and amounted to around 68 billion Swiss francs in 2012. The cost increase was thus higher than in the previous five years, when the average annual growth amounted to 4.3%. Healthcare costs in 2012 also grew more strongly than economic output: its share of gross domestic product rose from 11% in 2011 to 11.5% in 2012.

The cost of medicines as a proportion of healthcare costs fell from 9.4% in 2011 to 9.2%, after stabilizing at just over 10% for several years before eventually falling below 10% for the first time in 2010.

In particular, more intensive price reviews of medicines already established in the Specialties List (SL) led to a sharp fall in the index of drug prices.

Over a prolonged period, expenditure on health goods as a share of healthcare costs has also shown a marked decline: whereas spending in this sector amounted to 24.4% of healthcare costs in 1960, it had fallen to 10.9% in 2012.

In contrast to the cost of medicines, which as a share of healthcare costs has remained stable and even fallen in recent years, the cost of outpatient and inpatient care has increased substantially. Compared with 2011, too, spending especially in the inpatient care sector showed an above-average increase of 7.1%. At the same time, new treatments are improving the quality of life and increasing the chances of a cure and sur足v ival. Today, six of ten people with cancer are still alive five years after the initial diagnosis.

20

Healthcare costs broken down by services Total costs 2012¹: CHF 68,012 million (100%) n Inpatient care2

46.2% (CHF 31,403 million) n Outpatient care

33.1% (CHF 22,494 million) n Medicines³

9.2% (CHF 6,248 million)

n Other services

5.0% (CHF 3,448 million)

© Interpharma

n Prevention

6.5% (CHF 4,418 million)

Source: Costs and funding of healthcare, Federal Statistical Office, 2014.

1

Provisional data.

2

Including medicines.

3

At retail prices, excluding hospital.

Health cost trends by services Services as a proportion of healthcare costs (in %) 100 80 60 40

0

1960

1970

1980

Prevention / administration Healthcare goods / medicines

1990

2000

20121

Outpatient care Inpatient care

Source: Costs and funding of healthcare, Federal Statistical Office, 2014.

1

Provisional data.

21

© Interpharma

20

Healthcare costs show greatest increase in the outpatient sector In 2012, the cost of inpatient treatments amounted to around 31.4 billion Swiss francs, whereas the cost of outpatient treatments amounted to 22.5 billion francs. Expenditure on medicines stood at 6.2 billion francs, while administration generated costs of almost 3 billion francs, and 1.4 billion francs went on prevention.

Since the Health Insurance Act (LAMal) was introduced in 1996, costs have increased in all areas. The greatest increase occurred in the outpatient sector, especially in the last few years. Compared with 2011, outpatient costs in hospital have shown the greatest increase at 13%.

Compared with the previous year, spending on medicines increased by around 195 million francs (+3.2%). The increase was slightly higher for medicines dispensed in pharmacies and drugstores, at 3.5%, than for medicines dispensed directly by the doctors (+2.6%). The cost of medicines dispensed in pharmacies and drugstores as a proportion of overall costs has fallen by one percentage point since 1996. By contrast, the cost of medicines dispensed by doctors increased slightly by 0.1 percentage point as a proportion of overall costs.

22

Cost of healthcare according to services Type of service (in CHF millions) 1996

2000

2010

2011

2012

Inpatient treatment1

17,744 19,787 28,364 29,325 31,403

– Acute2

11,310

12,140 16,600 16,984 18,540

– Chronic

4,429

5,195

8,137

8,604

9,027

– Others 3

2,006

2,452

3,627

3,737

3,836

10,933 12,926 20,335 21,268 22,494 5,306

6,183

8,901

9,277

9,613

– Hospitals

1,423

2,150

4,852

5,192

5,868

– Dentists

2,682

2,845

3,790

3,827

3,886

– Physiotherapists

506

569

793

811

834

– Psychotherapists

125

149

212

220

228

– Spitex

773

889

1,585

1,734

1,848

– Other paramedical services

118

141

201

208

216

Other services 5

2,002

2,263

3,291

3,439

3,448

Medicines 6

3,808

4,642

6,055

6,053

6,248

– Pharmacies and drugstores

4,350

2,812

3,298

4,207

4,204

– Self-dispensing doctors

996

1,345

1,848

1,849

1,898

Prevention

967

1,014

1,471

1,443

1,449

2,015

2,210

2,979

3,037

2,969

Administration Total

37,469 42,843 62,495 64,566 68,012

Source: Costs and funding of healthcare, Federal Statistical Office, 2014.

Including medicines.

Including psychiatry.

3 Including rehabilitation.

4 Excluding medicines.

5 Laboratory tests, radiology, therapeutic apparatus, transport and ambulance service.

6 Cost to social insurance schemes, including private insurance plans, and to private households.

1 2

23

© Interpharma

Outpatient treatment – Doctors 4

High proportion of inpatient care Inpatient care in Switzerland was responsible for the largest share of total healthcare costs in 2011 at more than 45%. Outpatient care accounted for around 30% of total spending. Medicines accounted for less than 10%. By international standards, almost all other countries spent less on inpatient care. By contrast, medi足 cines were responsible for a much lower proportion of spending in S 足 witzerland at less than 10% of healthcare costs than in the benchmark countries (AT, BE, DE, FI, FR, IT, JP, SE and US).

If healthcare spending is compared with healthcare costs abroad (OECD countries), Switzerland lies in sixth place at 11% of gross domestic product (GDP) behind the USA, the Netherlands, 足G ermany, France and Canada. In the USA, healthcare spending in 2011 amounted to 17.7% of GDP. In the Netherlands, the country with the highest healthcare spending in Europe as a proportion of GDP, this value was around 6 percentage points lower.

24

Healthcare costs by international standards Services as a proportion of total healthcare costs (in %), 2011

0

20

40

60

80

100

n Inpatient care n Outpatient care n Medicines

© Interpharma

IT CH BE AT JP¹ FR FI DE SE US

Source: OECD Health Data 2013.

¹ Data for 2010.

Development of healthcare spending Healthcare spending as a proportion of GDP (in %) 18

17.7

15 12

11.9 11.6 11.3 11.0 9.4

9 6 3 1980

US NL

1990 DE FR

1

2000

2011

© Interpharma

0 1970

CH GB

Source: OECD Health Data 2013.

1

Data for 1991 not available.

25

Private households cover more than 60% of healthcare costs The healthcare costs of around 68 billion Swiss francs are covered through various channels. In 2012, more than 60% was financed by private households. The largest proportion was paid into the social insurance systems. Around a fifth was used to pay directly for benefits that were not covered by the insurance (out-of-pocket payments). More than 32% was financed directly by the public purse (federal, cantonal and municipal).

More than 40% of the costs accrued are paid by the social insurance schemes. Federal, cantonal and municipal authorities pay slightly more than 20% of costs. Most of this is paid by the cantons to inpatient facilities (14%), which are financed both by the cantons and through the premiums. This is evident in the flow of payments.

The new hospital financing scheme, according to which the cantons have to cover at least 55% and the health insurers at most 45% of hospital costs, came into force at the beginning of 2012.

26

Funding streams in the health system

Out-ofpocket

F

G

B

Private insurers and others

C

Social insurance schemes

E

State

J

H

A Private households (CHF 41,706.9 m) B Companies (CHF 4,332.7 m) C Communes (CHF 2,945.6 m) D Cantons (CHF 15,174.9 m) E Federal authorities (CHF 3,852.4 m)

D

F Prevention / administration (CHF 3,852.8 m) G Retail trade (CHF 5,549.1 m) H Outpatient care providers (CHF 20,631.6 m) J Hospitals and social medical institutions (CHF 37,271.8 m)

Source: Cost and funding of healthcare, Federal Statistical Office, 2014.

© Interpharma

A

27

Price index for medicines steadily falling Since the introduction of the Health Insurance Act (LAMal) in 1996 the hospital index has shown the biggest increase at more than 21 points. The price index of medical services has remained stable since 1996, whereas the price index for medicines has steadily and substantially fallen. In 2013, it lay well below all the other healthcare indices at around 66 points. This development is attributable above all to the price comparison for new reimbursable medicines with the average price in economically comparable states of Europe (AT, DE, DK, FR, GB and NL). The prices of medicines in Switzerland have thus fallen in line with those in the reference countries. Newly launched medicines in Switzerland today are no more expensive than in other European countries that are com足par足 able with Switzerland.

The price index for medicines includes around 200 medicines in the ten biggest-selling treatment categories. It shows price trends over the years, but does not provide any information on the development of the volume of benefits actually claimed and the launch of new medicines.

The European comparison shows that prices for health services in Switzerland have remained practically unchanged since 2005. In the Netherlands and Great Britain, however, prices over the same period have increased more than 25 percent.

28

Price indices of the health system in Switzerland Index: 1996 = 100 120

121.1 115.1 111.5 103.9 100.1

110 100 90 80 70

66.2

1998

2000

2002

Hospitals Dentists

2004

2006

2008

2010

Consumption Healthcare

2013

© Interpharma

60 1996

Doctors Medicines

Source: Consumer Price Index, Federal Statistical Office, 2014; conversion of index by Interpharma on the basis of 1996.

Price indices of the health system compared with other countries Harmonized Index of Consumer Prices, subindex of Health (Index: 2005 = 100) 130

132.2 126.2

120 118.0 112.6 110.8

110

104.5

100

98.6

2006

NL GB Quelle: Eurostat, 2014

2007 AT FR

2008

2009

2010

DK DE

2011

2012

2013 © Interpharma

2005

CH

29

Marked increase in alternative insurance models

In 2012, a total of 61 privately organized health insurers offered mandatory health insurance, the basic social insurance, in 足Switzerland. All people living in Switzerland can thus choose from a wide variety of health insurers, which they are also free to change every year. The insurers are required to accept all persons, regardless of their health, age or gender. Since the law on mandatory insurance came into force in 1996, there has been a sharp reduction in the number of insurers. In addition, the trend is now away from a large number of insurers with a small number of insured members to a small number of insurers with a large number of insured members.

Most insurers offer their clients a variety of insurance models. They choose a deductible according to which the level of monthly premiums is calculated. The higher the deductible, the lower the premium. Only when this is exceeded does the health insurer pay, although the insured person still has to pay 10% of costs up to a maximum of 700 francs himself. The insured persons pay all premiums themselves. There are no employer contri足butions. Besides the classical insurance models, alternative insurance models are also popular. They now account for more than half of insurance agreements concluded. In these models, the insured person commits to always seeing a defined service provider (e.g. general practitioner) first, in return for which he or she pays lower premiums.

30

Number of insurers according to number of insured members Number offering mandatory health insurance 80

90

40 14

1–5,000

14

8

20

5,001– 10,000

13

10,001– 50,000

6

50,001– 100,000

18

100,001– 500,000

3

5

More than 500,000

Number of insured persons

2012

1996

12

3

1996 2000 2005 2010 2011 2012

Total recognized insurers

159

110

90

86

69

67

Health insurers (mandatory insurance)

145

101

85

81

63

61

© Interpharma

0

Source: Mandatory health insurance statistics, Federal Office of Public Health, various years.

Insured members broken down by type of insurance

g

g

a b c e f

d

n Standard deductible

22.8%

n Selectable deductible f a Deductible CHF 500 b Deductible C HF 1,000 e c Deductible C HF 1,500 d Deductible C HF 2,000 d e Deductible C HF 2,500

20.7% 8.8% 1.4% 4.5% 0.7% 5.3%

c types of insurance1 56.5% n Other f with standard deductible 20.9% b g with selectable deductible 35.6% a

Ordentl.

Franch.

Source: Mandatory health insurance statistics 2012, Federal Office of Public Health, 2014.

1

HMO models, gatekeeper models, bonus insurance etc.

31

© Interpharma

Adult insured members 2012: 6,444,468 (100%)

Medicines as a reduced proportion of costs As in past years, outpatient treatment accounted for the highest gross benefits paid out under mandatory health insurance in 2012.

It accounted for 48% of total benefits. At 30.2% the benefits for inpatient treatment accounted for the second highest share, followed by medicines with a share of 21.8% – compared with 2011, this proportion fell by 0.1 percentage point. In all three areas costs increased versus 2011, although the growth in costs for outpatient care was above average at 3.7%. The total costs of mandatory healthcare increased by 2.9% in 2012. In 2011 the growth was slightly lower.

Mandatory health insurance benefits according to cost categories Total benefits 2012: CHF 25,901 million (100%)

n Outpatient1 48.0% n Inpatient 2 30.2%

© Interpharma

n Medicines 3 21.8%

Source: Mandatory health insurance statistics 2012, Federal Office of Public Health, 2014.

1 3

Excluding medicines hospital outpatient. 2 Including medicines.

Excluding inpatient treatment.

32

Mandatory health insurance benefits according to cost categories Cost categories (in CHF millions)

2008 2009 2010 2011 2012

Outpatient 10,484 10,866 11,374 11,873 12,431 – Doctor

5,104

– Hospital1

2,763 2,919 3,218 3,443 3,671

5,227

5,325

5,566

5,806

– Laboratory

687

692

697

749

794

– Physiotherapy

573

592

623

636

655

– Spitex

496

531

563

583

628

– Aids and articles

375

392

418

382

377

72 73 73 74 76

– Others²

416 439 461 439 425

Inpatient 3

7,106 7,402 7,524 7,600 7,821

– Hospital

5,258

5,481

5,593

5,696

5,937

– Nursing home

1,784

1,858

1,894

1,847

1,846

64

63

37

57

38

– Others Medicines 4

5,132 5,388 5,395 5,458 5,649

– Doctor

1,619

– Pharmacy

3,020 3,136 3,134 3,169 3,253

– Hospital outpatient Total

492

1,697 555

1,620 611

1,621 669

1,663 732

22,722 23,656 24,292 24,932 25,901

Source: Mandatory health insurance statistics, Federal Office of Public Health, various years.

Excluding medicines.

C ompany contributions to HMOs, complementary medicine, ergotherapy, speech therapy, health insurance benefits covering dentists, transportation and rescue costs.

3 Including medicines.

4 Excluding inpatient treatment.

1 2

33

© Interpharma

– Chiropractic

Public Opinion High degree of satisfaction with the health system Eighteen years after the Health Insurance Act (LAMal) came into force, the health system as a whole enjoys a high degree of acceptance among the Swiss public, 81% of whom have a fairly positive to very positive impression of the system. This is the ­highest approval rating ever recorded and suggests that there are currently no grounds for further major reforms in the health system without clearly discernible benefits to patients or customers.

The view of the electorate is that the ideal health system in ­S witzerland should allow freedom of choice and provide highquality services and benefits in sufficient quantity. At the same time, more and more voters would like a health system that is more state oriented. Those sections of the population who advocate a clearer market-oriented focus on the part of the service providers account for slightly more than half the electorate at 51%. The proportion of the electorate that approved of a market-oriented health system steadily increased from 2003 onwards until it reached a maximum of 75% in 2010, since when it has declined.  

34

Taking stock of the Health Insurance Act Proportion of electorate (in %), 2014 “Taking stock of the health system 18 years after the enactment of the LAMal, is your impression of the health system in Switzerland…?”

70 60

61

50 40 30 20

20 9

1

0

n Very negative n Fairly negative

9

n Don’t know /

© Interpharma

10

n Fairly positive n Very positive

no answer

Source: Health Monitor 2014, gfs.bern (N = 1,210), 2014.

More market or more state Proportion of electorate (in %), 2013 “What kind of a health system would you like in Switzerland? Would you like a health system in Switzerland where the market rules more than the state or where the state rules more than the market?”

25 20

21

21 17

12

5 0

n Very heavily market oriented n Heavily market oriented n Largely market oriented n Neither nor

4

7

n Largely state oriented n Heavily state oriented n Very heavily state oriented

Source: Health Monitor 2014, gfs.bern (N = 1,210), 2014.

© Interpharma

15 10

18

35

Access to new medicines should be ensured Unhindered access to new medicines is important to the Swiss: 62% of the electorate would not on any account want to be deprived of this access. There continues to be a substantial lack of understanding, for example, when it comes to restrictions in cancer medicine.

By contrast, three other cost-cutting measures were no longer taboo: Thus a slender majority of 51% welcomed a cutback in the catalogue of benefits in order to reduce costs. However, for 46% of respondents this depends on the level of cost reduction. At 62% a clear majority would also be prepared to do without a free choice of hospital for cost reasons. Here, too, the proportion of those who make this dependent on the level of cost reduction is relatively high at 52%. Finally, 60% of respondents said they would accept a restriction on the freedom of treatment in order to cut costs.

Here again, however, the willingness to accept such restrictions was dependent on the level of cost reduction for a high 54% of respondents.

36

Attitude towards cost-cutting measures Proportion of electorate (in %), 2013 “Which of the following measures would you be prepared to accept if it led to a reduction in costs in the health system? Please say whether you would be prepared to accept it whatever the cost reduction, would be prepared to accept it depending on the scale of cost reduction, or would not be prepared to accept it on any account.”

No free choice of hospital No free choice of doctor Reduction in catalogue of benefits No freedom of treatment Restricted access to new medicines 20%

40%

60%

n Whatever the cost reduction n Depending on the scale of cost reduction

80%

100%

n On no account n Don’t know / no answer

Source: Health Monitor 2014, gfs.bern, (N = 1,210), 2014.

37

© Interpharma

0%

Pharmaceutical Market Slight downturn in pharmaceutical market in 2013 In Switzerland, medicines are dispensed in pharmacies, hospitals, drugstores and, in certain cantons, also by doctors. Non-prescription medicines may be sold in drugstores, while prescription medicines can only be dispensed in the other outlets. The pharma足 ceutical market in Switzerland declined by 0.1% in 2013 compared with the previous year, falling to 5.077 billion Swiss francs. In 2012 a growth of 2.2% was still recorded.

The fact that there was a decrease in the value of the market despite the further growth in population, the growing proportion of the older generation and the wider range of medicines is due to price-cutting measures, especially for patent-protected 足medicines, the promotion of price competition for non-patented products and consequently strong growth of generics.

The number of packs sold increased by 1.0% to 209.8 million units.

As a result of price cuts, the market is expected to stagnate in the coming two years, despite the launch of new and innovative medi足 cines.

38

Pharmaceutical market in Switzerland by value Market volume 2013: CHF 5,077.2 million (at ex-factory prices, 100%)

n Pharmacies

51.7% (CHF 2,625.5 million) n Self-dispensing doctors

24.4% (CHF 1,236.6 million) n Hospitals

22.5% (CHF 1,140.7 million)

© Interpharma

n Drugstores

1.4% (CHF 74.4 million)

Source: Interpharma with database IMS Health Switzerland, 2014.

Pharmaceutical market in Switzerland by volume Market volume 2013: 209.8 million packs (100%)

n Pharmacies

57.2% (119.9 million packs) n Self-dispensing doctors 19.2% (40.2 million packs) n Hospitals 19.6% (41.0 million packs)

© Interpharma

n Drugstores

4.0% (8.7 million packs)

Source: Interpharma with database IMS Health Switzerland, 2014.

39

Most medicines are reimbursed

More than 56% of all medicine packs sold in Switzerland were reimbursable in 2013. Most of these were prescription-only medicines. Around a quarter of all reimbursable medicines were not prescription drugs. But these products are only reimbursed through the mandatory health insurance if a medical prescription is provided. If no such prescription is provided, these medicines can be sold freely, but patients then have to pay the full price themselves.

In the case of medicines not reimbursed through the mandatory health insurance, more than a third were prescription-only medicines. These include, for example, contraceptives. Most of the medicines not reimbursed were non-prescription products. Many of these non-reimbursable products are covered to some extent by the optional top-up insurance plans.

In terms of value, around 81% of the total pharmaceutical market consisted of reimbursable medicines in 2013, most of which were prescription-only products at the same time. Non-reimbursed products accounted for less than one-fifth of total pharmaceutical sales. Because of the diverse price-cutting measures, the market for reimbursable medicines shrank 0.4% compared with the previous year. This decrease is greater than that of the market as a whole, which shrank 0.1%. In terms of volume, reimbursable medi足 cines showed a 1.1% increase in 2013 compared with 2012.

40

Pharmaceutical market by reimbursability according to value Market volume 2013: CHF 5,077.2 million (at ex-factory prices, 100%) n Reimbursable products

81.2% (CHF 4,124.7 million) n Prescription only

76.6% (CHF 3,888.9 million) n Over the counter

4.6% (CHF 235.8 million)

n Prescription only

8.6% (CHF 437.7 million) n Over the counter

10.2% (CHF 514.8 million)

© Interpharma

n Non-reimbursable products

18.8% (CHF 952.5 million)

Source: Interpharma with database IMS Health Switzerland, 2014.

Pharmaceutical market by reimbursability according to volume Market volume 2013: 209.8 million packs (100%) n Reimbursable products

56.6% (CHF 118.8 million packs) n Prescription only 42.2% (CHF 88.5 million packs) n Over the counter 14.5% (CHF 30.3 million packs)

n Prescription only 16.1% (CHF 33.8 million packs) n Over the counter 27.2% (CHF 57.1 million packs) Source: Interpharma with database IMS Health Switzerland, 2014.

41

© Interpharma

n Non-reimbursable products

43.4% (CHF 91.0 million packs)

Strong growth of generics market Reimbursable generics achieved sales of 584.4 million Swiss francs in 2013. Compared with the previous year, the growth amounted to 6.7%. In terms of volume, generics showed an 8.1% increase. The value of the generics market has quadrupled since 2003.

In the generics-eligible market, the proportion of generics has increased in the last few years. This market includes both generics and also original products whose patents have expired, but for which no generics exist as yet. In addition, there are also original products for which there are no generics because, amongst other reasons, the price is already so low that they are not financially attractive for generics producers. The market volume of this product group amounted to around 539 million francs in 2013.

In the case of the 20 biggest-selling active ingredients whose patents have expired, generics accounted for more than 75% in terms of volume in 2013. Thus, three of four counting units (tablets, capsules etc.) sold were generics. In 2005, only around one in two units took the form of a generic. One reason for the marked increase in the proportion of generics between 2005 and 2006 lies in the introduction of the differentiated co-payment rule. According to this rule, the insured person makes a co-payment amounting to 20% of the cost of the original product, but only 10% in the case of generics. In the generics-eligible market as a whole, generics accounted for around 57% of volume.

42

Generics market Generics market (in CHF millions, at ex-factory prices) 600 500

584.4

400 300

100

141.4

0 03

04

05

06

07

08

09

10

11

12

13

© Interpharma

200

Source: Interpharma with database IMS Health Switzerland, 2014.

Generics-eligible market Generics-eligible active ingredients, top 20 (by value), defined on a monthly basis Generics as a proportion of the generics-eligible market (in %, on the basis of counting units1)

100 80

29.7

28.9

28.4

29.3

29.1

27.6

28.0

24.4

70.3

71.1

71.6

70.7

70.9

72.4

72.0

75.6

2006

2007

2008

2009

2010

2011

2012

2013

49.7

60 40

0

50.3

2005

© Interpharma

20

n Generics n Originals whose patents have expired and

for which generics exist

Source: Interpharma with database of IMS Health Switzerland, 2014.

1

Number of tablets, capsules, millilitres etc. sold.

43

Pharmacies remain the most important sales outlet

Pharmaceutical sales in pharmacies fell slightly in 2013 compared with the previous year. The 1,757 pharmacies in Switzerland (includ足ing Liechtenstein) accounted for 51.7% of medicines sold in terms of value. They were thus the most important sales outlet for medicines. Mail-order pharmacies are becoming increasingly important. Drugstores saw a decrease in sales compared with the previous year.

In Switzerland, doctors are also allowed to dispense medicines directly to their patients in certain regions. In 2013, there were 6,236 practitioners in Switzerland with a patient pharmacy, also known as self-dispensing (SD) doctors. This group thus accounted for around 40% of all medical practitioners. Since the sale of 足medicines by SD doctors is regulated differently from one canton to another, the proportions of self-dispensing differs between regions. The density of pharmacies also varies from one canton to another. The cantons with a high proportion of SD doctors (Baselland and Zug) generally show a much lower density of pharmacies compared with the other cantons. The sharp increase in 2010 is due to the fact that, since 2010, the data has been gathered according to cantonal regulations. Moreover, a new source of data has been in use since 2011. The figures from 2009 to 2011 are therefore only comparable with each other to a limited extent.

44

Sales outlets by turnover In CHF millions, at ex-factory prices 2,625

2,500 2,000

2 122

1, 500 1,237

500 0

896

1,141

723 113

03

74

04

05

06

07

08

Pharmacies Self-dispensing doctors1

09

10

11

12

13

Hospitals Drugstores

© Interpharma

1,000

Source: Interpharma with database IMS Health Switzerland, 2014.

Sales outlets by inventory Number of self-dispensing doctors1, pharmacies, drugstores and hospitals

7,000 6,236

6,000 5,000 4,000

3,835

3,000 1,000 0

1,757

1,662 758

561

592

335

03

04

05

06

Pharmacies Self-dispensing doctors1

07

08

09

10

11

12

13

Hospitals Drugstores

Source: Interpharma with database IMS Health Switzerland, 2014; Cegedim Switzerland SA, Zurich branch, 2014.

1

Doctors with their own pharmacy are described as self-dispensing doctors.

45

© Interpharma

2,000

Successful use of biotech and gene tech products Unlike classical chemical compounds, most active ingredients that are produced in genetically modified organisms using biotechnological methods are substances that are complex, large and highmolecular-weight proteins. In 2013, around 30% more medicines from biotechnological production were dispensed than five years ago. Their value at ex-factory prices amounted to 918 million Swiss francs.

Biotechnologically produced medicines are being successfully used for the treatment of severe or life-threatening diseases such as multiple sclerosis and blood disorders and especially for cancer and diabetes. Precisely in the field of oncology, there is a steady increase in the proportion of gene tech products. Gene technology methods today are used not only in the production process itself, but also in the research and development of almost every new medicine.

A particular feature of biopharmaceuticals is that it is not possible to produce generics with absolutely identical active ingredients.

After the patent has expired, similar copies of the highly complex biopharmaceuticals, known as biosimilars, may be approved. A special procedure has been established for these approvals, in which tests of efficacy and tolerability have to be carried out in the laboratory and in clinical studies. However, the producer of bio足similars requires a smaller programme of studies for regulatory approval than has to be provided by the original producer.

46

Market of biotech and gene tech products Market development (in CHF millions, at ex-factory prices) 1,000 918

800 600 400

0 15 90

92

94

96

98

00

02

04

06

08

10

13

Š Interpharma

200

Source: Interpharma with database IMS Health Switzerland, 2014.

Indications for biotech and gene tech products

n Cancer n Rheumatic diseases n Multiple sclerosis n Eye diseases n Diabetes n Hematopoiesis n Vaccines n Growth hormones n Others

33.3% 20.6% 13.3% 6.9% 6.6% 5.4% 3.8% 2.8% 7.3%

Source: Interpharma with database IMS Health Switzerland, 2014.

47

Š Interpharma

Market volume 2013: CHF 918 million (at ex-factory prices, 100%)

Medicines for diseases of the central nervous system sold the most In 2013, medicines for diseases of the central nervous system had the biggest market share at 15.4%. This category includes anal­ gesics, medicines for diseases such as epilepsy and Parkinson’s and also treatments of mental disorders (hallucinations, delusions and depression). Analgesics formed the biggest group in this category.

The second biggest market share was achieved by cancer medicines at 12%. These include classical cytostatic agents, which are used in chemotherapy, so-called monoclonal antibodies, which are used alone or in combination with chemotherapy, and also various other products used in cancer therapy.

In third place, with a market share of 10.7%, followed medicines for cardiovascular diseases. These include, for example, drugs for the treatment of high blood pressure, varicose veins, heart failure and cardiac arrhythmia.

48

Market share of medicines by indication area

n Central nervous system n Cancer n Cardiovascular n Infections n Respiratory system n Digestive system n Hematopoiesis n Musculoskeletal system n Urogenital system n Skin n Sensory organs n Others

15.4% 12.0% 10.7% 10.5% 6.4% 5.9% 5.1% 4.7% 4.6% 3.7% 3.3% 17.7%

Source: Interpharma with database IMS Health Switzerland, 2014.

49

Š Interpharma

Market volume 2013: CHF 5,077.2 million (at ex-factory prices, 100%)

A third of medicines from Swiss pharmaceutical companies Almost a third of medicines sold in Switzerland in 2013 came from companies with headquarters in Switzerland. At ex-factory prices, this corresponded to sales of more than 1.6 billion Swiss francs.

The big companies with Swiss headquarters include e.g. Novartis, Roche and Actelion. In addition, there are also numerous small and m 足 edium-sized pharmaceutical companies.

More than two-thirds of all medicines sold in Switzerland were produced by companies with headquarters abroad, amounting to sales of more than 3.4 billion francs last year. Companies with headquarters in the USA achieved the biggest sales here, accounting for more than 29% of the Swiss market.

Products of foreign pharmaceutical companies also have to be registered in Switzerland. This work and also their launch onto the Swiss market are handled by the Swiss subsidiaries of these companies or independent Swiss importers.

50

Market share of foreign companies

n Switzerland n Other countries n USA n Germany n Great Britain n France n Scandinavia n Japan n Italy n Benelux n Others

32.2% 67.8% 29.4% 10.3% 9.5% 5.6% 2.5% 2.5% 1.1% 0.9% 6.0%

Source: Interpharma with database IMS Health Switzerland, 2014.

51

Š Interpharma

Total sales in 2013: CHF 5,077.2 million (at ex-factory prices, 100%)

Fewer approved medicines All medicines either available in Switzerland or intended for export from Switzerland have to be approved by the Swiss Agency for Therapeutic Products Swissmedic. The applicants have to provide extensive documentation for the approval. This documentation must show evidence of, amongst other things, efficacy, quality and safety, as well as identity, purity and content of the active ingre­ dient of the medicine. The entire approval procedure usually takes 330 days. In 2013, 26 medicines with new active ingredients were approved. In the case of medicines for life-threatening diseases, fast-track procedures, that usually take 140 days are also possible. In 2013, four applications were processed using the fast-track procedure.

In 2013, the number of medicines approved by Swissmedic increased by 0.9% over the previous year and amounted to a total of 8,424 human and veterinary medicines. Viewed over a ­prolonged period, the overall number of approvals declined substantially. In 1990, this number stood at 10,119 units – almost 1,700 more than is the case today.

On the basis of the benefit/risk ratio, Swissmedic classifies human and veterinary medicines according to different dispensing categories. In 2013, categories A and B (prescription only) accounted for around 67% of all approved medicines.

52

Number of approved medicines in Switzerland 2000

2011

2012

2013

7,224 7,948 7,812 7,726

Veterinary medicines

890 678 690 698 8 ,114 8 , 626 8 , 502 8 , 424

Total approved medicines

Š Interpharma

Human medicines1

Source: Annual reports, various years, Swissmedic.

1

H uman medicines, allergens, biotech medicines, homeopathic medicines, vaccines, herbal medicines, radiopharmaceuticals and other product categories.

Dispensing categories over time Medicines by dispensing category1 (in %) 50 45.5

40 30

23.8 21.0

20 10

7.8

1.9

1995

2000

2005

2010

2013

A: Dispensed once on medical or veterinary prescription B: Dispensed on medical or veterinary prescription C: Dispensed after consultation with medical professional (pharmacies)2 D: Dispensed after specialist consultation (pharmacies and drugstores)2 E: Dispensed without specialist consultation2

Source: Annual reports, various years, Swissmedic.

C ertain products are assigned to more than one dispensing category and have therefore been counted more than once (pack size or dose).

2 O ver the counter.

1

53

Š Interpharma

0 1990

Growing number of reimbursable medicines In Switzerland, only medicines included in the so-called Specialties List (SL) drawn up by the Federal Office of Public Health (FOPH) are reimbursed through the mandatory health insurance. The FOPH decides on inclusion in the SL based on the recommen足 dations of the Federal Medicines Committee and stipulates the maximum price for reimbursement. The defining criteria for this are the efficacy, suitability and cost-effectiveness of the medicine concerned.

The cost-efficiency is determined based on a comparison with prices abroad. A therapeutic cross-comparison is also made with medicines in the same indication or with a similar mechanism of action. If an innovation premium is claimed, this must be justified by evidence of increased efficacy or a better risk profile (fewer side effects). It is explicitly laid down in the ordinance to the Health Insurance Act, because Switzerland has an interest in offering a research-friendly environment.

The scope of the SL has increased in the last few years, partly also because there are more and more generics and generics produ足 cers are required to offer all the pack sizes offered with the original product. At the end of 2013, the SL included a total of 2,871 products in 9,563 packs. Around 92% of these were prescription only (categories A and B), and the remaining 8% were available without prescription (categories C and D). These non-prescription medicines are only reimbursed if they have been prescribed by a doctor.

In 2013, around 41% of all SL packs were generics, as were more than 61% of the packs newly included in the SL in 2013.

54

Reimbursable medicines by dispensing category Total reimbursable medicines 2013: 9,563 packs1 (100%)

n List A: 2,297

(24.0%)

n List B: 6,511

(68.1%)

211

(2.2%)

n List D:

517

(5.4%)

Š Interpharma

n List C:

Source: Federal Office of Public Health, 2014, as at 31.12.2013.

1

27 packs (0.3%) could not be assigned to a list. These comprised pens, Diskhalers and baby food.

1995 2011 2012 2013

Number of products

2,255

2,788 2,844 2,871

Number of packs

5,383

9,319

9,378 9,563

Source: Federal Office of Public Health, 2014, as at 31.12.2013.

55

Š Interpharma

Medicines in the Specialties List (SL)

The price of a medicine is not a market price In Switzerland, the price to the public of a reimbursable medicine (maximum price that is reimbursed by the social health insurance) is not determined on the free market, but is set by the state. It is made up of the sales and marketing portion of the overall cost, the ex-factory price, the sales tax and the value-added tax. The ex-factory price is established on the basis of a therapeutic cross-comparison and a foreign-price comparison. In the case of the former, the cost of the product is compared with that of medi足 cines already approved in a similar indication or with the same mode of action. The foreign-price comparison looks at the prices in countries with economically comparable structures in the pharma足ceutical sector (Austria, Denmark, France, Germany, Great Britain and the Netherlands).

The Swiss Agency for Therapeutic Products Swissmedic levies a sales tax. This is payable for every pack sold and is dependent on the ex-factory price. It amounts to 5 Swiss francs per pack at most and accounts for more than 50% of the income of Swissmedic.

For every medicine, a sales and marketing surcharge is imposed by law. For prescription-only medicines up to an ex-factory price of 880 francs a surcharge of 12% is imposed, and for more expensive medicines the surcharge is 7%. In addition, a price-related surcharge is levied for every pack. For reimbursable OTC medicines a surcharge of 80% is imposed without a surcharge per pack.

In the case of non-reimbursable medicines, pricing is determined by competition.

56

Composition of the price of a medicine Pharmaceutical benefits according to LAMal Value-added tax (2.5%) Retail price (according to Specialties List, SL) 1

Sales and distribution costs

Production costs (logistics, infrastructure, personnel) Capital costs

Sales tax Foreign price comparison (AT, DE, DK, FR, GB, NL) based on ex-factory prices © Interpharma

Ex-factory price

Therapeutic cross-comparison Source: Federal Office of Public Health.

The relation between retail price and ex-factory price can be found at www.spezialitaetenliste.ch)

1

Marketing surcharges (categories A and B, without LOA1) + price-related surcharge

+ surcharge per pack (in CHF)

0.05 – 4.99

12%

4.00

5.00 –10.99

12%

8.00

11.00 –14.99

12%

12.00

15.00 – 879.99

12%

16.00

880.00 – 2,569.99 7% 60.00

from 2,570.00

0%

240.00

Source: Federal Office of Public Health.

1

Service-based remuneration.

57

© Interpharma

Ex-factory price

(in CHF)

Prices of medicines have fallen further The joint foreign-price comparison of the pharmaceutical industry and health insurers for 2013 shows that the price-cutting mea­s­ ures in Switzerland are having an effect. The price difference in the 200 biggest-selling patent-protected original products is ­narrowed further versus the comparable average abroad. At an exchange rate of 1.27 Swiss francs to the euro the price difference amounted to 5%, whereas in 2012 it stood at 12%. At that time the exchange rate was 1.29 francs to the euro. The last few years have seen a convergence with the prices of reference countries.

The Swiss National Bank has applied a minimum exchange rate of 1.20 francs to the euro to combat speculative forces on currency exchange markets. In the last few years, the strength of the franc has led to approximately a 20% increase in costs for Switzerland’s pharmaceutical hub, which is hugely important for the economy.

The price review by the Federal Office of Public Health (FOPH) is carried out every three years and also when the indications for a product are widened. However, only downward price adjustments are possible. Therefore the price differences versus other countries will be reduced further.

The consumer price index of Eurostat measures price trends over a prolonged period. It shows that the prices of medicines in Switzerland have fallen substantially in the last few years. By contrast, the prices of medicines have risen in the reference countries, except in the Netherlands and France.

58

Comparison of drug prices Switzerland vs other countries Top 200 original products 6-countries basket (exchange rate CHF / EUR: 1.27)

AT

NL

79

93

DK

60

79

94

95

100

80

103

115

120

100

FR

GB

40 20 CH 6-countries DE basket

© Interpharma

0

Source: Joint foreign-price comparison by santésuisse, vips and Interpharma, February 2014.

Harmonized Consumer Price Index Pharmaceutical products (index, 2005=100) 120

119.6 117.5 110.1 107.8 101.9 99.4 98.4

110 100 90 80

73.2

2006

DE DK

2007 AT FR

2008 GB NL

2009

2010

2011

2012

2013

Average of 6 reference countries CH

Source: Eurostat, 2014.

59

© Interpharma

70 2005

Price comparison with other countries An essential component when the prices of reimbursable medicines are set is the price comparison with other countries. Since 2010, prices have been compared with those in Austria, Denmark, France, Germany, Great Britain and the Netherlands. The foreignprice comparison is brought to bear both when a price is set for the first time as part of the process of inclusion in the specialties list (SL) and also when all medicines that have already been included in the SL undergo a price review every three years. In accordance with the law, the drug prices in this review are primarily assessed on the basis of the prices in other countries. In addition, the cost of research and development is also considered during the period of patent protection. This price review was introduced at a time of stable exchange rates.

Since May 2012, following a decision by the Federal Council, a tolerance margin of 5% has been applied in the triennial review of medicines from the SL versus prices abroad. Before this the tolerance margin was 3%. However, this increase only marginally absorbs the massively increased costs in Switzerland resulting from the overvalued Swiss franc. This poses a problem against the background of the huge economic importance to Switzerland of its pharmaceutical hub.

60

Price comparisons of European states

AT GB

BE SE

ES

DK NO

PT

FI CH

NL

FR

IT

DE IE

Official price comparison with all EU states Official price comparison with selected EU states

GR Unofficial price comparison with selected EU states Unofficial price comparison with all EU states No price comparison Š Interpharma

Switzerland Official

Source: IMS Health; EFPIA.

61

International impact of Swiss pharmaceutical regulation Both in industrialized countries and in emerging nations, the 足prices of Swiss medicines form part of the reference basket that is used to determine prices in those countries. The way in which prices are set using prices from reference markets varies from country to country. In some cases, the lowest price is used, and in other cases an average or median price is used. On the basis of international price referencing, any change in Swiss prices of medicines has a global impact.

A 10 percent reduction in price would lead to a global decline of almost 1,108 million Swiss francs in sales for the industry. Of this, around 515 million francs would be lost in Switzerland, more than 470 million in industrialized countries and over 122 million in emerging nations. In other words, international price referencing has the effect of doubling the global impact of any price reduction in S 足 witzerland. Apart from the impact on prices, this can also influence company decisions on the launch of innovative medicines and lead to delays in the introduction of products on the Swiss market. With a substantial price reduction in Switzerland, it is possible that the market launch in Switzerland would be considerably delayed.

62

Switzerland as reference country

BE PO

TW

KR

FI

RU HU

SK

BR CH OM

TR BH TU

SA

LB

JO

EG

IR

CA

Average of basket prices Other basket prices (e.g. median)

Š Interpharma

DZ Lowest basket prices

Source: The international impact of Swiss drug regulation, Charles River Associates, study on behalf of Interpharma and Novartis, March 2013.

63

Economic Impact Pharmaceutical sector as driver of the export industry Despite the continuing crisis in the eurozone in 2013, the pharmaceutical industry managed to hold its ground as a driver of exports for the Swiss economy. Compared with the previous year, exports rose 3.6% to more than 66 billion Swiss francs. They thus accounted for around a third of Switzerland’s export volume. The export surplus for pharmaceutical products likewise increased compared with the previous year, albeit not to the same extent (+0.3%). It amounted to 37.2 billion francs. The most important export market for pharma­c eutical products remains Europe.

Development of pharmaceutical trade balance Pharmaceutical trade balance (in CHF billions) 70

66.6

60 50 40

37.2

30

29.4

20

0 1990 Export

1995 Surplus

2000

2005 Import

Source: Foreign Trade Statistics, Federal Customs Administration, 2014.

64

2010 2013

© Interpharma

10

Export of pharmaceutical products Export volume 2013: CHF 66.6 billion (100%) =^ 33% of all Swiss exports

EU total

n Rest of Europe 3.6% n US 15.2% n JP 4.0% n Brazil, Russia, India, China, Mexico, Turkey, Korea 9.4% 53.5% n Other countries

14.3%

© Interpharma

n DE 14.0% n IT 8.3% n FR 5.3% n GB 4.6% n Rest of EU 21.3%

Source: Foreign Trade Statistics, Federal Customs Administration, 2014.

Import of pharmaceutical products Import volume 2013: CHF 29.4 billion (100%) =^ 17% of all Swiss imports

EU total

n Rest of Europe 0.5% n US 11.4% n JP 1.8% n Brazil, Russia, India, China, Mexico, Turkey, Korea 5.2% 79.7% n Other countries

1.4%

Source: Foreign Trade Statistics, Federal Customs Administration, 2014.

65

© Interpharma

n DE 18.6% n IT 12.8% n FR 3.0% n GB 6.0% n Rest of EU 39.3%

High export surplus In 2012, Switzerland posted an export surplus of 34.7 billion Swiss francs for pharmaceutical products. This has steadily grown in the last few years. Comparison with the rest of Europe shows that ­S witzerland occupied a leading position with this result not only relatively, but also in absolute terms. The neighbouring countries, for example, showed much lower export surpluses, and in Italy the trade balance was actually negative. The USA and Japan also show a negative trade balance.

Switzerland’s positive trade balance demonstrates the high degree of competitiveness of its pharmaceutical industry. Switzerland is the country with the largest export surplus of pharmaceutical products not only in Europe, but also worldwide. Yet it is not only an important production centre, but also a major research hub.

66

Pharmaceutical trade balance compared with other countries In CHF millions1, 2012 34,755 24,127

20,000

21,501

10,000

8,406 7,883

5,351

0

3,144 2,225 1,092 –2,541

–10,000 –20,000

–19,032 –22,469

CH

IR

DE

BE

GB

FR

NL

DK

AT

IT

JP

US

Source: UN Comtrade database, 2014; conversion to CHF by Interpharma.

1

According to SITC 54 Classification.

67

© Interpharma

30,000

High workplace productivity and major employer The pharmaceutical industry is one of the most productive sectors in Switzerland. Workplace productivity has risen steadily since 1990 with the exception of a few years. In 1990, it amounted to 171,000 Swiss francs, while in 2012 it was almost three times as high at around 488,000 francs. Workplace productivity in the pharma足c eutical industry was thus almost four times higher in 2012 than that in the economy as a whole. While overall productivity has risen 2% a year since 1990, productivity in the pharmaceutical industry increased by an average of 5.3% per annum over the same period. Workplace productivity is defined as the nominal gross value added in francs per employee.

The pharmaceutical sector is a major employer in Switzerland.

Thus in 2012, a total of around 39,500 people were directly employed in pharmaceutical companies, which corresponds to 0.8% of all Swiss employees. Indirectly, another 130,300 or so people are employed in the supply sector providing services to the pharmaceutical industry. In total, therefore, more than 169,800 people earn their livelihood either directly or indirectly in the phar足ma足c eutical sector. This corresponds to 3.5% of all employees in Switzerland. The number of those directly employed in the industry has steadily increased since 1995 and is now 76% greater than it was then. In the economy as a whole the growth has been around 20% over the same period.

68

Workplace productivity pharmaceutical industry / overall economy In CHF per employee 500,000

488,165

400,000 300,000 200,000 123,965

170,955 83,725

0 1990

1995

2000

Overall economy

2005

2012

Pharmaceutical industry

© Interpharma

100,000

Source: Polynomics; BAK Basel Economics; Federal Statistical Office, 2013.

Number of employees pharmaceutical industry / overall economy Growth in the number of employees in the pharmaceutical industry and the overall economy (in 1,000) 4,800

48

39.5

40 32

3,200 2,400

4,783.6

24.9

24

1,600

16

800

8

0 1990

1995

Overall economy (left axis)

2000

2005

0 2012

Pharmaceutical industry (right axis)

Source: Polynomics; BAK Basel Economics; Federal Statistical Office, 2013.

69

© Interpharma

4,000

4,048.9

High level of research investments in Switzerland In 2013, the Interpharma companies spent more than six billion Swiss francs on research and development (R&D) in Switzerland.

These high financial investments in Switzerland underline the importance as a research centre and testify to the driving concept of inno­vation within the companies. In the research and development process the research-based pharmaceutical companies bear the full risk of research themselves.

In addition to R&D spending, the Interpharma companies in Switzerland also invested more than a billion francs in plant, such as technical apparatus, machines and the equipment of buildings and production facilities. Both categories of investment are reflected in high staffing levels. The pharmaceutical industry is thus a mainstay of Switzerland’s economy.

Many Interpharma companies are organized as regional companies in Switzerland and are therefore unable to report certain key figures for Switzerland, even though they invest in Switzerland.

70

Key figures of Interpharma companies in Switzerland Sales² (CHF m)

R&D³ (CHF m)

PP&E investments (CHF m)

Actelion

27

320

19

1,020

Novartis

322

3,215

507

11,610

Headcount

Roche

281

2,034

490

8,826

AbbVie

110

–

–

110

Alcon

86

–

–

–

Amgen

–

–

–

310

159

–

–

136

–

–

–

300

Boehringer Ingelheim

55

–

–

–

Bristol-Myers Squibb

121

–

–

91

Bayer Healthcare Pharmaceuticals Biogen Idec

Gilead

110

0

0

23

Janssen-Cilag

152

32

40

1,560

Merck Serono

74

498

33

882

Pfizer

300

–

–

195

Sanofi

188

–

–

150

31

–

145

318

100

116

36

1,100

2,116

6,215

1,270

26,631

UCB Vifor Pharma Total

© Interpharma

Pharmaceuticals Switzerland, 2013 1

Source: Interpharma, 2014.

Novartis excl. Alcon, Vaccines & Diagnostics, Sandoz and Consumer Health; Roche excl. Diagnostics; Janssen-Cilag Switzerland incl. Crucell Switzerland; Sanofi Switzerland incl. Helvepharm and Genzyme.

2 Prescription-only medicines. Amgen and Biogen Idec do not publish any figures on sales in Switzerland. Bayer, Pfizer, Sanofi and Vifor Pharma are IMS figures.

3 R&D spending of Bayer Healthcare Pharmaceuticals in Switzerland go through Bayer Healthcare Pharmaceuticals Berlin; R&D figures for Switzerland are not published by AbbVie, Alcon, Amgen, Biogen Idec, Boehringer lngelheim, Bristol-Myers Squibb, Pfizer and Sanofi.

1

71

High global expenditure on research and development In 2013, the 17 Interpharma companies invested almost 47 billion Swiss francs worldwide in the research and development of medicines and new treatments. This corresponds to more than 19% of their sales. These reinvestments in research and development are above average compared with other companies in the sector.

Key figures of Interpharma companies worldwide Sales² (CHF m)

R&D (CHF m)

in % sales

PP&E investments (CHF m)

Operating profit (CHF m) Headcount

Actelion

1,784

405

22.7%

21

482

2,394

Novartis

29,855

6,712

22.5%

1,626

8,690

65,262

Roche

36,304

7,683

21.2%

1,294

16,108

55,183

AbbVie

17,382

2,641

15.2%

–

5,240

25,000

Alcon

10,496

939

8.9%

–

1,232

25,494

Amgen

16,866

3,785

22.4%

642

5,439

20,000

Bayer Healthcare Pharmaceuticals

13,761

2,034

14.8%

–

–

38,000 6,500

6,394

1,390

21.7%

278

1,761

Boehringer Ingelheim

13,614

3,055

22.4%

–

–

–

Bristol-Myers Squibb

14,676

3,342

22.8%

–

2,311

28,000 6,000

Biogen Idec

9,618

1,887

19.6%

170

2,737

Janssen-Cilag

Gilead

26,066

5,385

20.7%

793

8,506

–

Merck Serono

7,312

1,453

19.9%

186

1,097

15,712

Pfizer

44,388

–

–

–

–

–

Sanofi

33,518

5,027

15.0%

–

–

92,842

4,200

1,054

25.1%

292

848

8,732

475

116

24.4%

36

269

1,955

286,709

46,908

19.4%

5,338

UCB Vifor Pharma Total Source: Interpharma, 2014.

72

54,720 391,074

© Interpharma

Pharmaceuticals worldwide, 2013 1

Key figures of Interpharma companies worldwide Sales (CHF m)

R&D (CHF m)

in % sales

PP&E investments (CHF m)

Operating profit (CHF m) Headcount

Actelion

1,784

405

22.7%

21

Novartis

53,679

9,131

17.0%

2,932

482

2,394

Roche

46,780

8,700

18.6%

2,458

12,526

85,080

AbbVie

17,382

2,641

15.2%

–

5,240

25,000

Alcon

10,496

939

8.9%

–

1,232

25,494

Amgen

16,866

3,785

22.4%

642

4,711

20,000

Bayer Healthcare Pharmaceuticals

49,393

2,927

5.9%

2,653

8,612 135,696

3,919 113,200

6,394

1,390

21.7%

278

1,761

6,500

Boehringer Ingelheim

17,581

3,429

19.5%

1,498

2,642

47,492

Bristol-Myers Squibb

14,676

3,342

22.8%

–

2,311

28,000

9,972

1,887

18.9%

170

2,737

6,000

66,079

7,584

11.5%

3,332

14,338

127,600

Merck Serono

13,142

1,848

14.1%

500

1,485

38,154

Pfizer

47,824

6,191

12.9%

–

20,399

78,000

Sanofi

40,530

5,867

14.5%

–

–

112,128

4,200

1,054

25.1%

292

848

8,732

663

116

17.5%

36

269

1,955

417,441

61,236

14.7%

14,812

Biogen Idec

Gilead Janssen-Cilag

UCB Vifor Pharma Total

83,512 861,425

Source: Interpharma, 2014.

¹ N ovartis excluding Alcon, Vaccines & Diagnostics, Sandoz and Consumer Health; Roche excluding Diagnostics; Bayer figures are IMS data; global sales of Janssen-Cilag products go through the Johnson & Johnson Group, to which Janssen-Cilag Switzerland belongs; Sanofi incl. Helvepharm and Genzyme. ² Only prescription medicines.

73

© Interpharma

Group (all divisions) worldwide, 2013

Major investments in Switzerland as a research hub In 2013, the Interpharma companies Actelion, Novartis, Roche, Gilead, Merck Serono and Vifor Pharma spent 6,183 million Swiss francs on research and development (R&D) in the field of ­p harmaceuticals in Switzerland. This corresponds to 33.8% of their global R&D spend. In 2012 they spent around 200 million francs less. In the USA, the companies invested 7,818 million francs in R&D. The high levels of investment in pharmaceutical research and development in Switzerland and the USA underline the importance of these two research centres.

Interpharma companies: spending on R&D worldwide Global R&D expenditure of Interpharma companies1, 2013: 18,273 Mio. CHF (100%)

n Switzerland 33.8% =^ CHF 6,183 million n Rest of Europe 13.6% =^ CHF 2,486 million n USA 42.8% =^ CHF 7,818 million n Japan 5.1% =^ CHF 922 million © Interpharma

n Others 4.7% =^ CHF 864 million

Source: Interpharma, 2014.

¹ B ased on data for R&D in pharmaceuticals from Actelion, Novartis, Roche, Gilead, Merck Serono and Vifor Pharma. The other Interpharma companies do not break down their R&D investments by country and were therefore not included.

74

Interpharma companies in Switzerland: sales, research and exports In CHF billions, 2013 70

66.6

60 50 40 30 20

0

2.1

Sales

6.2

Research and development

Š Interpharma

10

Export

Source: Interpharma, 2014; export trade statistics, Federal Customs Administration, 2014.

75

Switzerland leads in innovation ranking According to the European innovation index, Switzerland is European champion in innovation. The particular strengths of Switzerland lie amongst other things in the number of scientific publications in international journals and their citability, patent applications and income based on licences and patents abroad. High em-足 ployment quotas in knowledge-intensive activities and the high proportion of new graduates are further particular features of Switzerland. Public sector spending on research and development (R&D), however, is around the European average; 60% of R&D spending comes from the private sector. The European innov足ation index is drawn up with reference to 25 indicators. The data comes primarily from 2010 and 2012.

Despite the relatively good position of Switzerland by European standards, recent developments give some cause for concern.

Compared with other countries, for example, Switzerland has fallen behind in clinical research. A master plan to strengthen biomedical research and technology, which the Federal Council approved in December 2013, is aimed at reinforcing the global competitiveness of Switzerland as a research centre and of the Swiss pharmaceutical industry.

76

Swiss innovation system in comparison with other countries

0.61

0.60

0.59

0.57

0.55

NL BE GB

0.61

0.63

LU

0.63

0.65

0.5

0.68

0.71

0.6

0.75

0.7

0.73

0.8

0.84

Innovation index 2013

IE

AT

IS

FR

EU

0.4 0.3 0.2

Š Interpharma

0.1 0.0 CH SE DK DE

FI

Source: Innovation Union Scoreboard 2014, European Union, 2014.

77

Research and Development Patent protection promotes medical advances Patents allow exclusive commercial use of an invention during the 20-year period of patent protection. In return, the research and development results must be made accessible to the public. Third parties can be excluded from the commercial use of the patented invention and the use can be licenced for a fee. In the case of medicines the period of patent protection is reduced de facto to 15 years at the most because of the time it takes to develop the medicine and gain regulatory marketing approval. As a result of patent protection, the investments made in research and development are protected and incentives created for further innovations, because the development new medicines is time-consuming and expensive, and the pharmaceutical companies are sole bearers of the risk of research. In addition, the manufacturing process of a medicine is relatively easy to copy. Against this background, 足patent law, which protects biotechnological inventions, is of ut足 most importance for pharmaceutical and biotech companies in Switzerland. Besides protecting the actual invention, the protection of data from preclinical and clinical trials required by the health authorities (first applicant protection) makes sure that no other company can refer to and use this data during the period of protection following market approval.

Precisely for a country like Switzerland, which has no raw 足materials at its disposal, knowledge and know-how are important capital.

In pharmaceutical research more than 85 patents per million employees were registered from Switzerland between 2000 and 2010.

78

Pharmaceutical patents with the European Patent Office Patent applications with the European Patent Office or via PCT¹ per million employees (in the economy as a whole), average 2000–2010

GB

FR

© Interpharma

33.3

NL

16.7

33.9

US

37.0

SE

20

43.2

52.0

40

52.0

60

85.1

80

94.5

100

0 DK

CH

DE

IT

Source: BAK Basel Economics, 2013; OECD REGPAT database, 2012.

Patent Cooperation Treaty: International agreement that allows a patent to be requested by filing a single patent application for all states that have signed up to the PCT. Duplication of counts is excluded.

1

79

Pharmaceutical industry crucial in national research and development Private industry continues to invest a great deal. In 2012, the private sector accounted for more than 60% of all investments spent.

The public sector (federal government and cantons) contributed 25% of research and development (R&D) funding, while 2% came from private non-profit organizations and from universities.

R&D play an important part in Switzerland’s private sector.

In-house R&D spending in 2012 amounted to 12.8 billion Swiss francs. This expenditure covers all financial and human resources deployed for R&D within companies in Switzerland (production sites or la­boratories). At almost 3.8 billion francs, the pharmaceutical industry accounted for around 30% of all in-house R&D spending in Switzerland, which was thus around twice as high as the amount spent in the engineering and metal industry.

Many corporate groups are increasingly focusing their R&D spending on individual company units, while other divisions apply the results of their R&D. If this is included in the analysis, the pharmaceutical sector benefited from more than 5.7 billion francs or 45% of total in-house R&D spending in 2012.

80

Funding of R&D in Switzerland Total spending on R&D in 2012: CHF 18,510 million (100%) n Private sector

60.8%

n Federal government

15.3%

n Cantons 10.1% n Others1 1.7% 12.1%

© Interpharma

n Foreign country

Soure: R&D in Switzerland 2012, Federal Statistical Office, 2014.

Private non-profit organizations and university funds.

1

Spending on R&D in the private sector In-house R&D spending by industry Total expenditure in 2012: CHF 12,819 million (100%) n Pharmaceuticals

29.6%

n Machinery / metal

15.7%

n Research and development 14.4%

n High-tech instruments

8.0%

n Chemistry

4.0%

n Food n Others

0.5% 17.0%

Source: Federal Statistical Office, 2013.

81

© Interpharma

n I nformation and communications technology 10.8%

High awareness of Swiss research Despite the growing competition from countries that have invested massively in research and development in the last few years (especially in Asia), Swiss research is held in high regard worldwide. In terms of visibility in scientific publications between 2007 and 2011 Switzerland occupies an outstanding position, as shown in the bibliometric evaluation of research in Switzerland by the State Secretariat for Education, Research and Innovation. Of the 20 countries with the largest number of publications, Switzerland was the most productive country at 3.6 publications a year for every 1,000 inhabitants.

In a scientific publication, other publications are usually cited. The more often an article is cited, the greater its impact in the research community. Swiss publications were cited extraordinarily often between 2007 and 2011 and commanded above-average attention in the research community. First place in the world ranking by impact was taken by the USA. Switzerland occupied second place with a value 17% above the global average. While Switzerland only accounted for 1.2% of publications worldwide, these publications enjoyed high international attention.

82

Country ranking according to recognition of scientific publications 2007–2011 1

2

Life sciences

US

GB

3

4

5

Physics, chemistry and earth sciences

CH NL US DK GB

Agriculture, biology and environmental sciences

CH GB NL

Technological and engineering sciences, IT

CH US NL DK BE

CH NL FI

DK

US

© Interpharma

Research field

Source: Bibliometric evaluation of research in Switzerland 1981–2011, report of State Secretariat for Education, Research and Innovation, 2011.

Scientific impact by country Top 10, 2007–2011

DE

SE

95 90 US

CH

GB

NL

DK

BE

FI WORLD

Source: Bibliometric evaluation of research in Switzerland 1981–2011, report of State Secretariat for Education, Research and Innovation, 2011.

83

© Interpharma

100

105

CA

104

105

100

105

105

107

109

110

115

116

117

115

120

120

No biomedical research without animal experiments Even the most state-of-the-art technology is not yet able to provide an adequate picture of living organisms and the interplay between organs. For this reason, animal experiments will also remain necessary for the foreseeable future. In 2010, researchbased pharmaceutical companies in Switzerland signed up to a charter committing themselves to compliance with the highest standards of animal welfare both in law and in ethical terms. This also includes efforts relating to the 3Rs in research1. The 3R Research Foundation Switzerland2 has been supported by the research-based pharmaceutical industry for more than 25 years.

In Switzerland, all procedures and actions involving animals for experimental purposes have to be approved by the responsible authorities. Every animal experiment is evaluated by an independent committee, which also includes members of animal welfare organizations. Rats and mice were the most frequently used ­a nimals in 2012 and, together with birds (incl. poultry) accounted for more than 90% of procedures. Since 1983, the total number of animals used has been reduced by more than two-thirds from almost two million to 606,434 in 2012. Compared with the previous year, the number of animals decreased by more than 8%.

Around 37% of all laboratory animals were used in industry, 49% in universities and hospitals. Compared with the previous year, 73,014 fewer animals (−24%) were used in industry in 2012.

1 The research principle of the 3Rs is aimed achieving a reduction, a refinement and the replacement of animal experiments.

2 www.forschung3r.ch.

84

Laboratory animals in Switzerland Laboratory animals used in animal experiments requiring a permit 2,000,000

1,992,794

1,600,000 1,200,000 800,000

606,434

0 1983

1990

2000

2012

Š Interpharma

400,000

Source: Animal experiment statistics 2012, Federal Food Safety and Veterinary Office, 2013.

Laboratory animals by species

n Mice 62.3% n Rats 16.8% n Birds (incl. poultry) 11.4% n Fish 4.0% n C attle, sheep, goats, pigs, horses, donkeys, diverse mammals 3.0% n Rabbits, dogs, cats 1.0% n G uinea pigs, hamsters, other rodents 0.9% n A mphibians, reptiles, invertebrates 0.5% n Primates 0.05% Source: Animal experiment statistics 2012, Federal Food Safety and Veterinary Office, 2013.

85

Š Interpharma

Total demand in 2012: 606,434 animals

Fewer clinical trials To study the efficacy, safety and quality of new medicines, pharmaceutical companies have to carry out clinical trials before products are allowed onto the market. In these trials, studies are first carried out in healthy volunteers (Phase I), then in a small number of patients (Phase II) and finally in a larger number of patients (Phase III). Only after this can an application for marketing authorization be submitted to the medicines regulatory authority Swissmedic. Once market approval has been granted, the new medicine must be monitored in practice (Phase IV).

Every clinical trial has to be approved by the responsible ethics committee and definitively released by Swissmedic. The number of studies carried out is an indicator of the attractiveness of a research centre. In the last ten years, there has been a marked decrease in clinical research in Switzerland. Since 2004 the number of clinical trials has almost halved. This trend can be seen in all clinical trial phases, but it is especially marked in Phase I (–58%).

The master plan approved by the Federal Council in December 2013 with a view to strengthening biomedical research and technology provides for measures to counter this downward trend.

Amongst other things, the quality of training for doctors in clinical research at universities and hospitals is to be improved. The Human Research Act, which came into force at the beginning of 2014, aims at speeding up the approval procedure for clinical trials in the ethics committees.

86

Clinical studies in Switzerland Clinical trials definitively approved by Swissmedic for medicines 400 350

346

300 250 200 100 50

205 133 108

81 48 /46 30

68

0 33 03 04

05

06

07

08

09

10

11

12

© Interpharma

150

13

n Total n Phase I n Phase II n Phase III n Phase IV 1

Source: Swissmedic, 2014.

1

T he total may differ from the sum of Phase I – IV trials because Phase 0 studies and observational studies have also been included in view of their small number.

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Appendix Important contact addresses for further information

Authorities Health statistics Bundesamt für Statistik (BFS) Federal Statistical Office Espace de l’Europe 10 2010 Neuchâtel Phone 032 713 60 11, Fax 032 713 60 12 info@bfs.admin.ch, www.bfs.admin.ch Market approval and market surveillance of medicines Schweizerisches Heilmittelinstitut Swissmedic Swiss Agency for Therapeutic Products Hallerstrasse 7, Postfach 3000 Bern 9 Phone 031 322 02 11, Fax 031 322 02 12 info@swissmedic.ch, www.swissmedic.ch Authorization of medicines for reimbursement by the health insurances Bundesamt für Gesundheit (BAG) Federal Office of Public Health Schwarzenburgstrasse 165 3097 Liebefeld Phone 031 322 21 11, Fax 031 323 37 72 info@bag.admin.ch, www.bag.admin.ch 88

Professional associations Medical doctors Verbindung der Schweizer Ärztinnen und Ärzte (FMH) Swiss Medical Association Elfenstrasse 18, Postfach 300 3000 Bern 15 Phone 031 359 11 11, Fax 031 359 11 12 info@fmh.ch, www.fmh.ch Pharmacists pharmaSuisse, Schweizerischer Apothekerverband Swiss Pharmacists’ Association Stationsstrasse 12, Postfach 3097 Liebefeld Phone 031 978 58 58, Fax 031 978 58 59 info@pharmasuisse.org, www.pharmasuisse.org Druggists Schweizerischer Drogistenverband (SDV) Swiss Drugstore Association Nidaugasse 15 2502 Biel Phone 032 328 50 30, Fax 032 328 50 31 info@drogistenverband.ch, www.drogistenverband.ch

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Heath insurances curafutura – Die innovativen Krankenversicherer Association of Innovative Health Insurance Companies Gutenbergstrasse 14 3011 Bern Phone 031 310 01 80 info@curafutura.ch, www.curafutura.ch santésuisse Swiss Health Insurance Association Römerstrasse 20 4502 Solothurn Phone 032 625 41 41, Fax 032 625 41 51 mail@santesuisse.ch, www.santesuisse.ch

Pharmaceutical associations Swiss research-based pharmaceutical industry Interpharma Association of Research-Based Pharmaceutical Companies in Switzerland Petersgraben 35, Postfach 4009 Basel Phone 061 264 34 00, Fax 061 264 34 01 info@interpharma.ch, www.interpharma.ch

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Chemical, pharmaceutical and biotech industry scienceindustries Wirtschaftsverband Chemie Pharma Biotech Business Association Chemistry Pharma Biotech Nordstrasse 15, Postfach 8021 Z端rich Phone 044 368 17 11, Fax 044 368 17 70 info@scienceindustries.ch, www.scienceindustries.ch Foreign drug manufacturers Vereinigung Pharmafirmen in der Schweiz (vips) Association of Pharmaceutical Companies in Switzerland Baarerstrasse 2, Postfach 4856 6304 Zug Phone 041 727 67 80, Fax 041 727 67 90 info@vips.ch, www.vips.ch Generic manufacturers Intergenerika Haus der Wirtschaft Altmarktstrasse 96 4410 Liestal Phone 061 927 64 08, Fax 061 927 64 10 info@intergenerika.ch, www.intergenerika.ch Manufacturers of over-the-counter medicines Schweizerischer Fachverband f端r Selbstmedikation (ASSGP) Association of the Swiss Self-Medication Industry Effingerstrasse 14, Postfach 5208 3001 Bern Phone 031 381 89 80, Fax 031 381 90 01 infos@assgp.ch, www.assgp.ch 91

For emergency Help in case of poisoning, incl. by drugs Schweizerisches Toxikologisches Informationszentrum (Tox-Zentrum) Swiss Toxicological Information Centre Freiestrasse 16 8032 Z端rich 24-hour-emergency number: 145 or 044 251 51 51 Phone 044 251 66 66, Fax 044 252 88 33 info@toxi.ch, www.toxi.ch

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Interpharma Petersgraben 35, P.O. Box CH-4009 Basel Phone +41 (0)61 264 34 00 Fax +41 (0)61 264 34 01 info@interpharma.ch www.interpharma.ch