Medication rebates leave patients and insurers short by CHF 320 million

An SRF report says hospitals and doctors pass on only part of the medication discounts they receive, leaving patients and health insurers short by an estimated CHF 320 million each year, according to the Swiss Federal Audit Office.

The federal government is currently conducting six investigations into unlawful benefits in medication purchasing. Those under investigation include a pharmaceutical company that allegedly paid a medical practice around CHF 70,000 for advertising purposes.

Discounts and other benefits must generally be passed on by pharmacists, doctors and hospital managers. They may retain part of them under certain conditions, including for research, consulting, advertising or quality improvements. These amounts must be disclosed transparently.

Christoph Kilchenmann, deputy director of the health insurers’ association Prio Swiss, said awareness of the rules had increased and more discounts were now being passed on. However, he added: “We assume that by no means all discounts have been passed on.”

Hospitals deny that they are unlawfully enriching themselves. Dorid Djelid, communications chief of the hospital association H+, said around one quarter of hospitals had an agreement with the federal government. Under those agreements, part of the discounts is passed on while some is retained for quality improvements that are intended to benefit patients.

Djelid said the administrative effort involved was not worthwhile for every hospital, including some psychiatric clinics.

Among doctors who dispense medication, around one in six has a similar transparency agreement. Pharmacies do not yet have such an agreement. Martine Ruggli, president of the pharmacists’ association Pharmasuisse, said the association recommended that pharmacies either accept no discounts or pass them on in full until an agreement was in place.

The agreement is expected to be ready next year. Pharmacies would then be allowed to retain around half of their discounts if they used the money to improve quality or safety. Pharmasuisse says pharmacies currently pass on 2.3 percent of discounts, estimated at CHF 60 million a year, and have done so annually since 2001.

The Federal Audit Office said transparency agreements improved oversight but called for more checks on organisations that do not report the discounts they receive. The amount at stake exceeds CHF 300 million a year, equivalent to around one percent of all health insurance premiums.