Reference pricing system

What is a reference pricing system?

A reference pricing system is a rule for medicines whose patent has expired and for which several products with the same active ingredient exist. The authority sets a maximum price for each active ingredient, the reference price. The health insurer reimburses no more than this amount. If you choose a more expensive product, you pay the difference out of your own pocket. In Germany, the same principle is called the fixed-amount system (Festbetragssystem).

What matters for Switzerland: no such system applies here. The Federal Council proposed it on 21.08.2019 in its dispatch on the first cost-containment package. Parliament split the bill and rejected the reference pricing system in package 1b. The two chambers adopted the other measures of package 1b on 30.09.2022; they have applied since 01.01.2024.

So when reference prices are mentioned today, it is usually about the 2019 proposal or about comparisons with other countries. What actually applies in Switzerland is a different instrument with a similar aim: the differentiated retention fee. It does not target the reimbursement but your co-payment.

How it works

The 2019 proposal

According to the FOPH fact sheet, a reference price was to apply as soon as at least three medicines with the same active ingredient were on the List of Pharmaceutical Specialties (SL). Original products, co-marketing medicines, generics and biosimilars would have been affected. The FOPH would have calculated the reference price from the price abroad minus a reduction depending on the market volume of the active ingredient. The Federal Council justified the proposal by stating that generics in Switzerland cost more than twice as much as in the FOPH’s nine European reference countries. A study commissioned by the FOPH estimated the possible savings at CHF 310 to 480 million.

What applies today

Since the version of 01.01.2024, Art. 38a of the Health Care Benefits Ordinance (KLV) has governed the differentiated retention fee. For each active ingredient, the average ex-factory price of the cheapest third of all products on the List of Pharmaceutical Specialties is determined, each time on 1 December or when the first generic is added to the list. If the price of your medicine is at least 10 % above this average, your retention fee is 40 % instead of 10 % of the costs exceeding your deductible. This applies equally to original products and to overpriced generics.

So the health insurer still pays for every product on the list, but you bear a larger share for expensive products. A reference pricing system, by contrast, would have set a fixed maximum amount and left the entire difference to you.

Two further rules push prices down. When admitted to the List of Pharmaceutical Specialties, generics must be 20 % to 70 % cheaper than the original, depending on the original’s market volume (Art. 65c of the Health Insurance Ordinance, KVV). And pharmacies may replace a prescribed original with a cheaper product with the same active ingredient if the doctor does not expressly require the original (Art. 52a KVG).

Legal basis

A reference pricing system would have required an amendment to the Federal Health Insurance Act (KVG). This amendment is not in force because Parliament rejected it in business 19.046.

The following provisions are the law in force:

• Art. 38a para. 1 KLV: 40 % retention fee for medicines whose ex-factory price exceeds the average of the cheapest third with the same composition of active ingredients by at least 10 %. Under para. 7, this does not apply if the doctor verifiably prescribes the original for medical reasons or the pharmacy refuses the substitution for medical reasons. Under para. 8, they must inform you if a generic exists and your retention fee is above 10 %.
• Art. 104a para. 2 KVV: the part of the retention fee above the statutory 10 % counts only half towards the annual maximum retention fee.
• Art. 65c KVV: minimum gap of 20 % to 70 % between generic and original upon admission to the List of Pharmaceutical Specialties.
• Art. 52a KVG: pharmacies’ right of substitution.

Example: reference price and 40 % retention fee compared

In its fact sheet, the FOPH explained the 2019 proposal with three products containing the same active ingredient: CHF 75, CHF 63 and CHF 55, with a reference price of CHF 55. The table shows what Lukas, 45, would pay himself for one pack if he has already used up his deductible for the year. The figures are the FOPH’s example prices, not current list prices.

Product	Price	with reference price of CHF 55 (2019 proposal)	current law, if 40 % applies	current law, if 10 % applies
Medicine 1	CHF 75	CHF 20 additional price + CHF 5.50 retention fee	CHF 30.00	CHF 7.50
Medicine 2	CHF 63	CHF 8 additional price + CHF 5.50 retention fee	CHF 25.20	CHF 6.30
Medicine 3	CHF 55	CHF 5.50 retention fee	not applicable	CHF 5.50

The calculation shows that in both systems, what matters most for you is choosing the cheaper product if it is medically just as suitable.

What this means for you

With every new prescription, ask at the pharmacy whether there is a cheaper product with the same active ingredient. If your doctor requires the original for medical reasons, she should note this on the prescription; the normal 10 % retention fee then applies.

For long-term medication, it is worth looking at your health insurer’s statement of benefits. It shows whether 40 % was charged for a medicine. High medicine costs are also an argument for a low deductible; the premium calculator shows whether this pays off, with the premiums of all health insurers. The rules on the retention fee are the same for all health insurers; the overview under Health insurers helps you choose by premium, service and key figures. You can find more on prices under medicine prices.

Common mistakes

• Believing that Switzerland has a reference pricing system. The proposal was rejected. The differentiated retention fee applies.
• Assuming that expensive products are no longer paid for. The health insurer still pays for all products on the List of Pharmaceutical Specialties; only your share is higher.
• Simply accepting the higher retention fee. If there is a cheaper product with the same active ingredient, ask for it, or have medical reasons for the original noted on the prescription.
• Calculating with the annual maximum as if everything were the same. The part above 10 % counts only half towards the maximum of CHF 700. With expensive products, your retention fee for the year can therefore rise above CHF 700.

We explain how we prepare examples and sources under How we calculate.