As at the start of 2015, three different versions exist of the revised Swiss Therapeutic Products Act, which will change the law on discounts and incentive systems for those falling within its scope.
Key questions which remain unanswered are: First, whether the revised provisions will only be applicable to (prescription) drugs or also to medical devices; and secondly, to what extent discounts and incentive systems will be permissible. For medtech companies it will be particularly important to closely monitor future developments in 2015 since, should the revised provisions also be applicable to medical devices, the medtech industry will be faced with a new set of legal rules which will have considerable impact on the distribution and marketing of medical devices.
The current legislation on rebates and incentive systems in the Swiss Therapeutic Products Act entered into force on 1 January 2002 and has kept pharmaceutical companies and lawyers busy ever since. This legislation is currently undergoing a revision, which is supposed to enter into force on 1 January 2016. At the moment, however, there are still some uncertainties with respect to the scope of the revised legislation and whether it will only be applicable to drugs – similar to the current legislation – or also to medical devices.
Art. 33 of the Therapeutic Products Act currently prohibits pharmaceutical manufacturers from granting, and medical persons from accepting, material beneits, if such beneits are likely to influence a medical person’s prescription or dispensing behaviour. Permitted are: (a) material beneits of modest value (up to CHF 300) and which are related to the medical or pharmaceutical practice; and (b) commercially and economically justified discounts which are directly relected in the price. This provision has been said to be unclear and unsuitable for the effective targeting and prevention of incentives offered by pharmaceutical companies to doctors and pharmacists.As a result, there has been legal uncertainty which has led to several administrative and criminal proceedings, not only against pharmaceutical companies, but also against doctors and pharmacists.
The aim of the current revision is to provide more clarity on the admissibility of discounts and incentive systems in the therapeutic products industry. In 2012, the Swiss Federal Council issued draft legislation that would have led to a prohibition of all kinds of discount and rebate systems for prescription drugs, unless such rebates would have been fully passed on to the patients. Additionally, the draft contained far-reaching transparency and disclosure obligations which would have required doctors and pharmacists to disclose their commercial ties with pharmaceutical and medtech companies.
In mid-2014, the Swiss National Council changed the draft considerably. According to the National Council, the provision regarding discounts and incentive systems shall not only apply to (prescription) drugs but also to medical devices – which would constitute a significant expansion compared to the current legislation. On the other hand, the National Council deviated from the Federal Council’s position that discounts shall not be allowed at all and defused the far-reaching transparency and disclosure obligations foreseen in the Federal Council’s draft. Discounts and incentive systems would, in the National Council’s opinion, still be possible but should be made transparent in the books and records of the pharmaceutical and medtech companies as well as in those of the doctors and pharmacists.
In November 2014, the second chamber of the Swiss Parliament, the Council of States, also deliberated over the revision of the Therapeutic Products Act, the draft of the Federal Council and the changes decided by the National Council. In accordance with the Federal Council but contrary to the views of the National Council, the Council of States decided to limit the applicability of the provisions regarding discounts and incentive systems to prescription drugs only. Additionally, the Council of States further amended the requirements for admissible discounts and incentive systems. Contrary to the recommendation of the National Council and in accordance with the approach of the Federal Council, the Council of States decided to apply the transparency obligations to all therapeutic products (i.e. drugs and medical devices).