Sandoz CEO: Switzerland could save millions on medicines

Richard Saynor is Chief Executive Officer (CEO) for Sandoz, a global leader in generic and biosimilar medicines. Bloomberg Finance Lp

Sandoz chief executive Richard Saynor says Switzerland could save millions on medicine if it made greater use of generic medicine.  

But the Alpine nation rarely prescribes generic drugs, the term used for medicine that contains the same chemical substance as a brand-name medicine protected by patents.  

“Switzerland could save hundreds of millions of francs every year on medicines if it switched more,” Saynor told the Tages-AnzeigerExternal link newspaper published on Wednesday.

The generic drug industry, he noted, produces 80% of all drugs worldwide, at 25% of the cost of the original manufacturer. “In Switzerland, generics and biosimilars only have a market share of around 25%,” he added. “In Europe it is around 70% and in the US 90%. With today’s margin system, medical practices and pharmacies in Switzerland earn more the more expensive the medication is. This disincentive drives up costs.”

Sandoz, one of the world’s largest manufacturers of generic medicines and a biosimilars drug maker, is a spin-off of Swiss pharma giant Novartis. It went public on Wednesday with shares opening at CHF24 ($26.05), valuing the company at CHF10.3 billion on its first day of trading, according to Reuters. Sandoz, however, is not listed in the Swiss leading index SMI for the time being.

Affordable drugs

The problem of affordable access to drugs has come into sharp focus in Switzerland, where health insurance premiums are already high and set to rise in 2024 by an average of 8.7%.

“Generics provide massive cost relief for healthcare systems, which in turn creates more space to finance innovative new active ingredients in the pharmaceutical industry,” said the CEO.

Generic drugs can hit the market only after the patents on the original drugs expire. In Switzerland, like the US, patents last two decades.

Biosimilars are copies of biological drugs and tend to be more expensive than generics in part because they require more rigorous safety and effectiveness studies to launch on the market. They are a clear strategic focus for Sandoz, according to the CEO. “We now have 25 biosimilars in the pipeline, and in the next eighteen months we plan to launch 5 biosimilars for blockbuster drugs in the US and Europe,” he told the newspaper.

Expanding in Europe

Sandoz is investing 250 million euros to expand its antibiotics capacities in Europe, where a sudden uptick in demand has caught many off-guard. “During the pandemic, the need for antibiotics more than halved,” he said. “Now it has more than doubled. No supply chain could have managed this in the short term… At Sandoz, we predicted a recovery in demand and decided to invest heavily in new facilities.”

Sandoz, the CEO noted, is one of few in the Western world still producing antibiotics on a global scale. “Antibiotics today come primarily from China and India, which can produce much more cheaply with different environmental standards and lower labor and energy costs,” he noted.

The company already has research and production sites in Germany, Austria and Slovenia. Slovenia, he noted is significantly cheaper than Switzerland, and Sandoz has become one of the largest employers to the Central European country. “Working with the government there is very easy,” he said. “In Austria, the government supported us with 50 million euros to expand our antibiotic production.”

In Switzerland, the company plans to move its offices off the Novartis campus to the Basel train station. Some Novartis employees have also moved to Sandoz.