The internal reference pricing (IRP) relates to the price comparison of drugs that treat the same medical condition. In Switzerland, the Federal Office of Public Health (FOPH) announced that it limits the IRP to drugs with the same effective strength. This practice concerns a large number of drugs. With this PharmaCircular, we would like to keep you abreast of the practice of the Federal Office for Public Health regarding the periodical re-evaluation of drug pricing in Switzerland.

Before including a drug in the List of Special–ties (Spezialitätenliste, SL) and every three years thereafter, the Federal Office of Public Health (FOPH) examines whether a drug meets the legal requirements for such listing, in particular whether the drug is effective, appropriate, and economically efficient.  A drug’s economic efficiency is acknowledged if the treatment is offered at the lowest possible costs. Pursuant to the Swiss Federal Supreme Court, evaluating the economic efficiency requires considering different cost-benefit ratios. For this purpose, the FOPH evaluates the internal and external reference pricing (IRP and ERP respectively). The results of both methods are given equal weight.

Treatment of the same medical condition

For the IRP, the FOPH relied on the same indication or mechanism of action, thus requiring that the drugs' indications or mechanisms of action were not substantially different.

As of 1 March 2017, the FOPH compares the costs per day or per treatment for drugs that are not only included on the List for Specialties but also used for the treatment of the same medical condition. In assessing whether a drug is a treatment alternative, the FOPH relies on either Swissmedic’s marketing authorization or the approved SmPC. The FOPH does not consider unapproved indications.

IRP limited to the same effective dose?

In the course of the triennial review of the economic efficiency, the FOPH declared that only drugs with the same potency, i.e., the effective strength, will be considered for the IRP. This declaration has great practical significance and affects a large number of drugs, including statins, angiotensin-II-receptor antagonists, ACE blockers, corticosteroids or proton pump inhibitors. For all these categories, there are drugs with different effective doses.

The potency, or effective dose, is the amount of a drug that produces a therapeutic response or desired effect in some fraction of the subjects taking it. The different effective dose does not limit the physician's treatment choice. To the contrary: drugs with different effective doses within the same drug category can both enhance the treatment options and comply with a specific patient’s needs. For many drug categories, there are schedules that inform a physician about the application of drugs with different effective doses.

A comparable situation exists regarding the duration of action. Drugs may not only be distinct as to their effective dose but also to the length of time that a particular drug is effective.

Example with proton pump inhibitors

The practical consequences of the FOPH's practice are easily demonstrated with proton pump inhibitors.

Ingredient

Brand

ED

Pantoprazol

Pantozol

20-40 mg

Omeprazol

Antra

20 mg

Esomeprazol

Nexium

20 mg

Lansoprazol

Agopton

30 mg

Rabeprazol

Pariet

20 mg

Dexlansoprazol

Dexilant

30 mg

Source: University hospital Basel of 11. January 2016.

To evaluate the economic efficiency of Dexilant®, several drugs can be used for treating gastroesophageal reflux disease or heartburn. The same effective dose, however, has only Agopton®. With the limitation to Agopton®, other drugs are excluded from the comparison even if they are admitted for the treatment of the same disease.

The FOPH's limitation to drugs with identical effective doses or durations of action does not correspond to the situation where the physician must evaluate the treatment options. Physicians are trained to evaluate among drugs with a different effective dose or duration of action. These differences do not alter the indication.

For the IRP’s relevance, it is essential which drugs are included in the cost-benefit-comparison. According to the purpose of the IRP, all drugs used for the treatment of the same medical condition must be included in this comparison. To facilitate its review, the FOPH limits the comparison to drugs with the same effective dose or the same duration of action. Such proceeding not only diminishes the IRP’s relevance but also contradicts the intention of the law makers to compare the cost-benefit-ratio regarding all treatment alternatives. Hence, this practice is not compliant with the essence of the periodic drug pricing re-evaluation.