In 2023, Swiss health insurance companies hit an all-time high by spending CHF 9 billion ($10.2 billion) on medicines for compulsory health insurance, marking an almost 6% increase compared to the previous year. This rise in medication costs is attributed to a combination of demographic shifts, higher drug prices, and more advanced treatments.
Why Medication Costs Are Rising
Several factors have contributed to this increase. These include the growing number of patients, the higher volume of medication prescribed per person, and the introduction of new, often expensive therapies. According to a report by Helsana, a Swiss insurance company, the general price level of new medications has doubled in recent years. The report concluded, “A little quantity and a lot of price.”
Impact of Demographic Changes and Chronic Diseases
Switzerland’s population is aging, with the number of people over 65 growing by 2.3% in 2023, while the overall population increased by 1.7%. As people age, they require more medications, often multiple prescriptions. This increase in demand for healthcare and medication is one of the driving forces behind the surge in costs.
Cancer and Immune System Drugs: A Major Expense
Cancer treatments, including immune system drugs, accounted for nearly one-third of Switzerland’s total medication costs, amounting to CHF 2.8 billion. However, these drugs represent only 1.9% of all medication purchases. For example, the annual cost of the five most expensive cancer drugs averages around CHF 90,000 per patient.
New Diabetes and Weight Loss Drugs
Medications containing the new active ingredient semaglutide, such as diabetes drug Ozempic and weight loss product Wegovy, saw a significant rise in demand, leading to costs exceeding CHF 113 million. This marks an almost 40% increase in spending on these treatments. In total, health insurers spent around CHF 455 million on diabetes medications.
Proposed Solutions to Control Costs
To address rising costs, Swiss policymakers are considering a volume discount or rebate system, where pharmaceutical companies would provide health insurers with discounts on medicines above certain sales thresholds. This approach is supported by both Helsana and the Swiss pharmaceutical association Interpharma. However, Interpharma also advocates for faster price negotiations to ensure timely access to new medicines.
In addition, Helsana experts suggest focusing on the use of generics. Currently, generics account for two-thirds of outpatient medication costs, presenting a significant opportunity to lower overall spending.
Conclusion
With rising healthcare costs driven by demographic changes, expensive new therapies, and more frequent medication use, Swiss health insurance companies face significant challenges. However, through regulatory proposals and the increased use of generics, there is potential to control these rising costs while ensuring access to essential medications.
