Medicines and generics: 40 % retention fee and case-by-case reimbursement

What basic health insurance pays for medicines

Basic health insurance covers medicines prescribed by a physician (Art. 25 para. 2 let. b of the Federal Health Insurance Act, KVG). Which medicines these are, and at what price, is determined by the FOPH’s List of Pharmaceutical Specialties (SL) (Art. 52 para. 1 let. b KVG). Pharmacies, practices and hospitals may charge basic health insurance at most these prices (Art. 52 para. 3 KVG).

How much you pay yourself depends on three things: whether you have already reached your deductible, whether your medicine is on the SL, and whether there are cheaper products with the same active substance.

This article explains what insurance pays. Which medicine is medically right for you is something you clarify with your physician or at the pharmacy.

Step by step: how to avoid the higher retention fee

1. Ask when you get the prescription. When the medicine is prescribed, ask whether there is a generic and whether the prescribed product has a higher retention fee. Your physician must point this out to you (Art. 38a para. 8 of the Health Care Benefits Ordinance, KLV).
2. Check the List of Pharmaceutical Specialties. On spezialitaetenliste.ch, packs with a higher retention fee are marked in the “SB” column. The list is updated on the first day of each month.
3. Raise substitution at the pharmacy. The pharmacy may give you a cheaper product with the same active substance if it is medically equally suitable, unless your physician expressly requires the original (Art. 52a para. 1 KVG).
4. Have medical reasons documented. If you need the more expensive product for medical reasons, this must be noted on the prescription and documented in your patient file. Then it stays at 10 %.
5. Check the statement. On your insurer’s statement of benefits, check whether a 10 % or 40 % retention fee was charged. If something is wrong, contact the pharmacy or practice first, then your insurer.
6. Read the model conditions. Some insurance models require you to obtain generics where they exist. The consequences of obtaining an original are set out in the conditions of your model.

The rules in detail

Generics: same active substance, lower price

Generics are copies of an original product with an identical active substance and the same dosage form and strength; they come onto the market once the patent has expired. Because they cost less to develop, the Health Insurance Ordinance (KVV) requires a minimum price gap to the original when they are added to the SL (Art. 65c KVV). Excipients, shape or colour of the tablet may differ from the original.

Differentiated retention fee: 40 instead of 10 per cent

Normally, after the deductible, you pay 10 % of the costs as a retention fee (Art. 64 para. 2 KVG). For medicines whose ex-factory price exceeds the average of the cheapest third of all products with the same active substance composition by at least 10 %, it is 40 % (Art. 38a para. 1 KLV). This applies equally to originals, generics, co-marketing products, reference products and biosimilars (Art. 38a para. 2 KLV). So a generic can also cost 40 % if it is above the threshold.

The FOPH sets the threshold every year on 1 December and additionally as soon as the first generic or biosimilar of an active substance is added to the SL (Art. 38a para. 4 KLV). According to the FOPH, the differentiated retention fee applies as soon as at least three medicines with the same active substance are on the SL, including at least one generic or biosimilar. A medicine can therefore switch from 10 % to 40 % on 1 December, and conversely at any time on the first day of a month if the manufacturer lowers the price.

Exceptions to the higher retention fee

If your physician demonstrably and expressly prescribes the original for medical reasons, or if the pharmacy demonstrably refuses substitution for medical reasons, the higher retention fee does not apply (Art. 38a para. 7 KLV). According to the FOPH’s explanations, the same applies if the cheaper products cannot be supplied; the pharmacy must document the reason. If a manufacturer lowers the price of an original after the patent expires in one step to the level under Art. 65c KVV, 10 % also applies for 24 months (Art. 38a para. 6 KLV).

Counting towards the maximum

The retention fee is capped per year: CHF 700 for adults, CHF 350 for children (Art. 103 para. 2 KVV). With the higher retention fee, the amount above the statutory 10 % only counts half towards this maximum (Art. 104a para. 2 KVV). At 40 %, 25 % of the costs therefore count, even though you pay 40 %. If you often take such medicines, you therefore pay more than CHF 700 per year. According to the FOPH, once the insurer has added up the maximum amount, no retention fee is charged any more, even for medicines with a higher retention fee.

Case-by-case reimbursement

If a medicine is not on the SL, is used outside its authorised indication (off-label) or outside a limitation, or is not authorised in Switzerland, basic health insurance does not pay in principle. Art. 71a–71c KVV provide for exceptions, for example where a major therapeutic benefit is expected against an illness that can be fatal or lead to serious and chronic health impairments, and there is no effective authorised alternative (Art. 71a para. 1 let. b KVV).

The prerequisite is always specific cost approval from the insurer, after it has consulted its medical adviser (Art. 71d para. 1 KVV). Once the application is complete, it decides within two weeks (Art. 71d para. 3 KVV). If it refuses, it must give the physician and the patient reasons for the decision (Art. 71d para. 6 KVV). The insurer sets the amount of reimbursement with the manufacturer; in doing so, it applies price reductions set by the Federal Department of Home Affairs (FDHA), generally at most 30 % or 50 % (Art. 71a para. 3 and 4 KVV). How cost approval works is explained on the page Cost approval.

Figures: price gap for generics

How much cheaper a generic must be when it is added to the SL depends on the original’s sales in the three years before the patent expired (Art. 65c para. 2 KVV):

Market volume of the original per year	Generic cheaper by at least
up to CHF 4 million	20 %
CHF 4 million to CHF 8 million	40 %
CHF 8 million to CHF 16 million	50 %
CHF 16 million to CHF 25 million	60 %
over CHF 25 million	70 %

These statutory values apply to the co-payment: standard deductible CHF 300 for adults, retention fee 10 % or 40 %, maximum retention fee CHF 700 for adults and CHF 350 for children (Art. 103 KVV, Art. 38a KLV). You will find the prices of individual medicines in the SL; how they are set is explained in the glossary term medicine prices.

Sample calculation: original or generic

Example with fictitious people. Reto, 52, has already reached his CHF 300 deductible this year. He takes a long-term medicine. Assume the original costs CHF 50 per pack according to the SL and has a higher retention fee, while the generic costs CHF 30. Reto needs 12 packs a year. The prices are assumed; the percentages are statutory.

You can work out how regular medicine costs affect your choice of deductible with your own figures in the deductible calculator. The result is a calculation, not a recommendation.

Special cases

Children, pregnancy, accident

• Children pay no standard deductible and at most half the retention fee of an adult, i.e. CHF 350 per year (Art. 64 para. 4 KVG). The differentiated retention fee also applies to them.
• Pregnancy: From the 13th week of pregnancy until eight weeks after the birth, no co-payment is charged on benefits under Art. 25 KVG (Art. 64 para. 7 KVG).
• Accident: If accident insurance under the Accident Insurance Act (UVG) pays, according to the FOPH it charges neither a deductible nor a retention fee, not even for medicines with a higher retention fee. If the accident is handled by your health insurer, the normal co-payment applies.

Lower-cost models with a generics rule

Some GP, HMO or telemedicine models require you to obtain generics where they exist. The consequences of an original are governed by the model’s conditions, not by the law. Read them before switching to such a model. The page Insurance models gives an overview of the models.

Supplementary insurance

You may not insure the retention fee of basic health insurance, neither with a health insurer nor with a private insurer (Art. 64 para. 8 KVG). However, supplementary outpatient insurance can cover medicines that are not on the SL, for example certain complementary medicine products. Exactly what is covered is set out in the general terms and conditions; what counts is the general terms and conditions and the information from your insurer. You will find an overview of supplementary outpatient insurance under Supplementary insurance.

Common mistakes

• Not asking for the generic. Doctors’ practices and pharmacies must inform you, but the FOPH expressly recommends asking yourself every time you obtain a medicine.
• Assuming generics never cost 40 %. If a generic is above the threshold, the higher retention fee applies there too.
• Only discussing medical reasons verbally. Without a note on the prescription and documentation in the practice, the insurer charges 40 %.
• Relying on the CHF 700 maximum. With the higher retention fee, only part counts towards this limit; you can pay more.
• Starting off-label treatment without cost approval. Without prior cost approval under Art. 71d KVV, you must expect to bear the costs yourself.

Which insurers offer which models and how they are doing financially is shown in the health insurer profiles; you can compare premiums in the premium calculator. If the insurer refuses reimbursement, the article Benefit refused explains the next steps. What changes when you move is explained in the article Moving and premium region. You will find more articles on benefits and costs in the section Understanding basic insurance.