External environment

New parliamentary elections and change of Minister of Health

New elections to the Federal Parliament were held in autumn 2023. Around a quarter of all Council members were newly elected. There has been a shift to the right in the National Council, while the composition of the Council of States has remained almost identical. The 52nd legislature 2023 to 2027 began with the start of the winter session in December 2023.

By adopting the proposal for a uniform financing of outpatient and inpatient services (EFAS) from 2009, the National Council and the Council of States demonstrated at the first session in December 2023 that they are willing to forge compromises that are acceptable to the majority.

Alain Berset, the long-serving Minister of Health, announced his resignation in June 2023. He headed the FDHA from 2012 to 2023. Elisabeth Baume-Schneider has taken over the Department of Home Affairs from 1 January 2024.

Cost pressure

Our first-class healthcare system costs money. Rising health insurance premiums are putting a major strain on the Swiss population. The pressure to halt cost growth is increasing.

Business activities in the Galenica network are characterised by process efficiency, synergies, the positioning of pharmacies as a cost-conscious and easy access point in the Swiss healthcare system, and cost awareness. With its digitalisation initiatives, Galenica is working specifically on numerous initiatives with savings potential.

The development of premiums as the main concern of the population and Parliament

In 2024, the average health insurance premium will increase by 8.7%. Innovative therapies, more visits to the doctor, more expensive medications and the reduction in the reserves held by health insurers are the main reasons for this increase in costs.

At 40% and a rapid increase of 16%, health issues and health insurance premiums are the new main concern in Switzerland (source: Credit Suisse Worry Barometer 2023, GfS).

Several factors are causing premiums to rise faster than overall costs, such as medical innovation, a growing and ageing population and the implementation of the “outpatient before inpatient care” principle. Politically, the development of the total costs is usually criticised. Population growth creates a gap between total cost growth and per capita cost growth, which is growing at a much slower rate.

In the National Council and Council of States, several parliamentary initiatives have been submitted that pursue four main directions: a moratorium on benefits in basic insurance, a moratorium on premiums in basic insurance, enabling foreign purchases (lifting the territorial principle) and abolishing the contractual obligation between service providers and health insurers.

For many middle-income households who do not benefit from cantonal premium reductions, premium trends are problematic. As a solution, the Social Democratic Party of Switzerland (SP) proposes that a maximum of 10% of income should be used for health insurance premiums. Parliament rejects the “premium relief initiative”. It has drawn up an indirect counterproposal at legislative level on premium reductions, which the SP considers insufficient.

Parliament also rejects the federal popular initiative “For lower premiums – to curb healthcare costs (cost brake initiative)” submitted by the party known as the Centre (formerly CVP). For the Initiative Committee, an indirect counterproposal that Parliament had drafted at the level of legislation does not go far enough.

The indirect counterproposals come into force if the initiatives are withdrawn or rejected by the people and the cantons.

The second package of measures to contain healthcare costs is being discussed

With the second package of cost containment measures, the Federal Council is pursuing three objectives: it wants to reduce any increase in volume that is not medically justified, curb the rising costs of basic health insurance and improve the quality of healthcare provision. The Federal Council’s proposal met with major criticism from interested parties during the consultation process.

The National Council completed its deliberations on the Federal Council's proposal in 2023. It clarified two points that are important for pharmacists:

1. As part of cantonal or national programmes, pharmacists can bill preventive measures such as vaccinations through basic insurance without a doctor’s prescription.
2. “Pharmaceutical services to optimise drug therapy prescribed by a doctor and patient adherence, as well as the associated performance or arrangement of analyses and provision of substances and items used for examination or treatment, which are carried out in interprofessional consultation with the attending physicians” can be billed through basic insurance.

The second package of cost containment measures in the healthcare sector makes a significant contribution to the positioning of the pharmacy as a low-threshold access point to services and advice in the healthcare sector and thus makes a positive contribution to cost containment. The Health Committee of the Council of States began discussions in autumn 2023.

Therapeutic Products Act and ordinances

HIO/HIBO: Revision of distribution share for prescription drugs to take effect in mid-2024

In September, the Federal Council decided to improve rapid access to safe medicines (individual reimbursement). It also adopted measures to promote generics and biosimilars, such as increasing the deductible if patients prefer an original preparation. The annual recurring savings potential is estimated at CHF 250 million. The new provisions has entered into force on 1 January 2024.

In December, the Federal Council came out in favour of a revision of the distribution share for prescription drugs. Until now, the distribution share of more expensive drugs was higher than that of cheaper ones, so there was an incentive to sell more expensive drugs. The revision reduces the price of many more expensive drugs and increases the price of some cheaper drugs. There will now also be a uniform distribution share for medicinal products with the same active ingredients. The compensation for the service providers is therefore always the same, regardless of whether it is an original preparation or a cheaper generic. The measures are intended to further promote the dispensing of cheaper generics and biosimilars. Annual savings of CHF 60 million are expected. The amendment to the regulation on the distribution share for prescription drugs will enter into force on 1 July 2024.

At its December meeting, the Federal Council also approved the extension to the end of 2024 of the collective agreements for the remuneration of pharmacists (SBR IV/1), which expired at the end of 2023.

Consultation on partial revision of the Therapeutic Products Act – proposal for mail-order business to follow later

In December, the Federal Council opened the consultation process for a revision of the Therapeutic Products Act (stage 3a). The proposal has three main focuses. Firstly, Switzerland should largely adopt the EU regulation for advanced therapy medicinal products (ATMPs). Secondly, e-prescriptions and e-medication plans, as well as recurring medication reconciliation, should be made mandatory. Drug safety in paediatrics is also to be increased through the mandatory use of electronic systems for calculating individual drug dosages in children. Thirdly, a high degree of equivalence with EU legislation for veterinary medicinal products should be established.

The consultation process will last until 22 March 2024. The proposal is expected to be submitted to Parliament in 2025.

According to the FOPH, the revision to simplify the mail-order business of non-prescription medicinal products should be proposed in revision stage 3b. The consultation process is not expected to open until 2025 at the earliest. Interested associations are examining whether the process can be speeded up by Parliament taking action on its own initiative.

Other important influences

Digitalisation

Our world is becoming increasingly digital, but the healthcare sector still has some catching up to do. Complex issues such as patient safety and data protection are slowing down some digitalisation initiatives or holding back service providers. With its strong IT expertise and promising e-health initiatives, Galenica is committed to an efficient, secure and increasingly digital healthcare system. For the benefit of all stakeholders and for the benefit of patients.

In 2023, the Federal Council presented various proposals in order to catch up on to the digital transformation in the healthcare sector.

Consultation on comprehensive revision of the electronic patient record

The electronic patient record (EPR) is facing strong headwinds. Nevertheless, the Federal Council wants to adhere to the EPR and promote the dissemination of electronic patient records with two bills.

In summer 2023, the Federal Council invited interested parties to comment on the comprehensive proposal for revision of the EPR as part of a consultation process. Central elements of the partial revision of the Federal Act on the Electronic Patient Record (EPRA) are:

• Compulsory for all healthcare professionals responsible for outpatients
• Opt-out or voluntary basis for patients
• Central storage for dynamic data (medication overview, vaccination record)
• Use of technical infrastructure for additional B2B services
• EPR access for researchers

The proposal has met with a positive response. Several stakeholders – including the influential Swiss Conference of the Cantonal Ministers of Public Health (GDK) – are proposing to introduce a single central data platform. The previous system of decentralised data storage has encountered significant technical problems that have not yet been fully solved. Several organisations and political parties propose bringing forward the EPR obligation for outpatient service providers. The dispatch and the bill should be submitted to parliament by the end of June 2024. It is not scheduled to enter into force until 2028 at the earliest.

EPRA transitional funding

In order to ensure the financing of the reference communities until the comprehensive revision comes into force, the Federal Council is proposing transitional funding to Parliament.

The National Council dealt with the matter in December. It supports the Federal Council’s proposal, but has decided to bring forward the EPRA obligation for outpatient service providers.

The Council of States will discuss the EPRA transitional funding in 2024. The aim is for the proposal to enter into force on 1 January 2025.

DigiSanté funding proposal

The use of artificial intelligence has great potential, but also entails considerable risks. In November 2023, the Federal Council approved the DigiSanté programme for the promotion of digital transformation in the healthcare sector and sent a dispatch and credit commitment to Parliament.

DigiSanté comprises around 50 projects and is divided into four packages: (1) Prerequisites for digital transformation; (2) National infrastructure; (3) Digitalisation of government services and (4) Secondary use for planning, control and research. It has a term of ten years (2025 to 2034).

In the case of several projects, the legal basis must first be established before funding can be granted from the commitment credit.

Interconnectedness

Today’s patients rightly expect a seamlessly connected healthcare system. The networking of the various service providers is crucial, and consolidations can also contribute to reducing interfaces. Cooperation between the private sector, the public sector and academia must be strengthened, which is also in line with the Federal Government’s DigiSanté initiative.

Galenica is involved in various industry associations to promote constructive cooperation between healthcare service providers.

Changing consumer needs

Customers today expect a presence in both the digital and analogue worlds. They like to use online search engines for information, which makes them (supposedly) better informed. Prevention and a health-conscious lifestyle are important to many people. At the same time, demographic change is leading to an increase in the number of patients under external control.

With its Omni-Channel strategy, home care offerings and reputation as a leading healthcare network, Galenica has succeeded in positioning itself as a reliable partner for healthcare services.

Ageing society

The population in Switzerland is getting older and older. This development brings challenges with it . Places in nursing homes are scarce. Elderly people also want to stay at home for as long as possible.

Galenica’s home care offerings are of great importance against the backdrop of demographic change.

Climate change

Climate change with regular heat waves is affecting the health of the population. For companies, it entails rising energy costs, additional regulations and disclosure requirements.

Galenica believes that responsible action contributes significantly to the long-term success of the company and has a positive impact both within and outside the company. Sustainability is therefore an integral part of Galenica’s corporate management.

Diversity and equal opportunities

Mixed teams are more successful and companies that recognise this have a competitive advantage. The challenges of our time can only be solved if the potential of all employees can be utilised. Diversity is therefore a corporate obligation.

The Galenica network is committed to diversity and brings together people from all language regions of Switzerland and from more than 80 countries and all ages. We are convinced that the different languages, age groups and backgrounds of our employees are what make Galenica’s development and success possible.

Shortage of skilled workers

The shortage of qualified specialists affects the entire sector and remains a major challenge for healthcare in Switzerland. No pharmacies without pharmacists!

Galenica is at the forefront of promoting the next generation of professionals and the attractiveness of pharmaceutical and medical professions. A dedicated task force addresses the problem and develops creative ideas for attracting young talent and maintaining the attractiveness of job profiles.

Outlook

• Switzerland’s healthcare system remains in good shape. Cost growth, overburdened hospital emergency wards, bottlenecks in the supply of medicines, a shortage of nursing staff, a shortage of new GPs and the backlog in terms of digital transformation remain the focus of healthcare policy.
• Even in the new legislature, the primary task of healthcare policy remains to ensure efficient and affordable care.
• Because the supply shortages among skilled workers will continue, the willingness in Parliament to deviate from the “medical diagnosis and treatment monopoly” in the Health Insurance Act (HIA) and to create new care models is likely to increase. Pharmacists and nursing experts APN (Advanced Practice Nursing) in particular could play a more important role in basic care.
• The Federal Council is expected to present measures to eliminate or alleviate bottlenecks in the supply of medicinal products in 2024.
• The Galenica Group is committed to political solutions that enable efficient service provision at economic cost. It also proposes strengthening interprofessional collaboration and creating new care models. It is firmly opposed to measures aimed at rationing and jeopardising the already difficult supply situation.