Pharma closes ranks over parallel imports

Some drugs are almost twice as expensive in Switzerland as in the EU Keystone

The Swiss pharmaceutical industry has stepped up its campaign against lifting a ban on parallel imports of patented drugs, saying such a move would bring few benefits.

But some politicians and consumer groups counter that removing restrictions would reduce high drug prices and health-care costs.

According to the Organisation for Economic Cooperation and Development (OECD), drug prices in Switzerland are 40 per cent higher than in many other countries.

But imports of cheaper patented drugs from other countries – parallel imports – are not allowed in Switzerland. Patented drugs make up 60 per cent of the Swiss market, according to the OECD.

At a seminar earlier this week, Interpharma, which represents the interests of the Swiss pharmaceutical industry, warned that parallel imports would not bring down prices.

No benefits

Citing a recent study by the London School of Economics on parallel imports in the European Union, the organisation said that the main beneficiaries would be importers and not patients or health-care services.

“If you look at Europe, what remains at the end for the patient is very limited,” said Silvio Gabriel, head of the Europe, Middle East and Africa regions at Novartis.

“In Germany it’s only [a saving of] three per cent; in the UK it’s one per cent. So we can’t use the argument that we would save a lot of money or reduce prices,” Gabriel told swissinfo.

Gabriel added that one of the main concerns was that drug companies would lose revenue currently channelled into research and development, one of the core activities of larger pharmaceutical concerns.

He added that this would be harmful for Switzerland, which has a large pharmaceutical sector.

“If you don’t make savings, then why jeopardise a very good place for research and production, and for the pharmaceutical industry,” said Gabriel.

Bernd Schips, professor at the Federal Institute of Technology in Zurich, added that there was also the danger that manufacturers would base themselves elsewhere if the ban were lifted.

Controversial

The question of whether to allow parallel imports is a controversial one. After ordering two studies on the subject, the government recently decided to maintain the status quo.

But consumer groups are calling on the government to come to an agreement with the EU to make parallel imports easier. In the EU, a drug can be traded freely once it has been licensed within the bloc.

So far the EU has been unwilling to discuss such a move.

But this does not deter the consumer lobby, which has been actively campaigning for parallel imports for some time.

“It is a well-known fact that health costs rise every year because there has been an increase in the number of medications and expensive medications that are being prescribed,” said the head of the Swiss consumers’ association, Jacqueline Bachmann.

She said that allowing parallel imports from EU countries would make a significant contribution towards lowering health costs in Switzerland – among the highest in Europe.

Giving it a go

Bachmann also added that parallel imports should be given a go to see whether they would lower costs.

“It can’t really be that all the profits go into the pockets of the parallel importers – competition is such that it would adjust the market so that parallel imported medications really are cheaper,” she said.

For Bachmann, the main obstacle to parallel imports of patented medications is the country’s strong pharmaceutical lobby.

“ [It] is keen to keep the ban on parallel imports on the grounds that development and invention of new medications is very expensive. But we have patent protection for this,” she told swissinfo.

“That is no reason why parallel imports should remain banned.”

swissinfo, Isobel Leybold-Johnson

In brief

Parallel imports of patented medication are not allowed in Switzerland.

But such imports are allowed for drugs where the patent has run out.

Parallel imports are patented or branded goods imported from cheaper countries and sold without the consent of the owner of the intellectual property rights.