Interpharma Publishes Comprehensive Snapshot of 2007 Swiss Drug Market

In 2007 the Swiss drug market grew by 6.5% year-on-year (y/y) by value to 4.5 billion Swiss francs (US$4.37 billion), according to a report published by the Swiss pharmaceutical association Interpharma. Market growth was driven by innovative medicines launched in 2006 and 2007. By value, the 2007 Swiss drug market grew slightly ahead of the worldwide market, which expanded by 6.2% y/y. In the meantime, the market grew by 4.0% y/y by volume to 195.1 million packages. The national healthcare system covered 79% of the total spending on drugs, a 7.2% y/y increase to 3.5 billion francs. The over-the-counter (OTC) and generic markets grew slower than the market average by value. Pharmacies sold 2,396-million-francs worth of medicines in 2007, equivalent to a 53.5% market share. In comparison, dispensing practitioners sold 1,120 million francs, hospitals 872 million francs, and drug stores 92 million francs of medicines.

Ranking of spending by therapeutic classes remained unchanged from 2006. The most money is spent on treatments for central nervous and cardiovascular system diseases. Immunosuppressant, oncology and anti-HIV drugs fuelled growth in their respective therapeutic areas. Thirty-five innovative drugs were approved by the national drug regulator Swissmedic in 2007, of which 10 were fast-tracked.

In 2007 31.2 % of medicines sold in the country were manufactured domestically. Switzerland exported 51.1-billion-francs worth of pharmaceutical products in 2007, bringing the trade balance to 27.9 billion francs. In effect, 25% of all Swiss exports are medicines.

Outlook and Implications

The Swiss pharmaceutical market has roughly grown in line with the global market in 2007. The most striking figure is the generic growth rate, which in 2007 stood at 5.7% by value, down from 53.1% in 2003, 30.0% in 2004, 41% in 2005, and 46.4% in 2006. The generic market growth by value took a nosedive in 2007 and is expected to remain low over 2008. Indeed, since 1 January 2008, generics need to be priced 40% cheaper than their branded equivalent in order to be admitted onto the positive reimbursement list. This measure will contain generic growth by value in the years to come.

On the other hand, innovative medicines are likely to keep performing well in the country. Market growth by value is fuelled by the launch of newer and more expensive treatments. The uptake of innovative medicines is high in Switzerland and new drugs often hit the Swiss market well before they hit other European markets. The Swiss view is that those drugs tend to be cost-efficient as they save money on in- and out-patient care down the line. Another reason for the strong innovative medicines uptake in the country is the government's determination to remain a research and development (R&D) hub. The pharmaceutical industry drives the domestic economy as it indirectly employs over 118,000 people and invests 21% of its sales revenue into R&D. As a counterpart, the country does all it can to foster a pro-industry environment and this involves speedy medicine uptake and a friendly pricing and reimbursement environment. The country also grants more patents than its European counterparts in a bid to boost innovation and bans parallel imports of patented medicines.

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