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Court Annuls FOPH Order Limiting Medicinal Product Price Increase 

by Andreas Wildi

Published: December, 2019

Submission: January, 2020

 



On 7 August 2019 the Federal Administrative Court annulled a Federal Office of Public Health (FOPH) order that had limited the price increase of a medicinal product on the list of specialities to two years.

The product manufacturer had requested a price increase under Article 67(2) of the Healthcare Insurance Ordinance (SR 832.102), having incurred higher costs following the loss of two suppliers.


The FOPH initially rejected the price increase based on its own (different) price calculations, adding that the manufacturer had sought to double the price in 2008.


Following a series of challenges by the manufacturer, the FOPH permitted a temporary (ie, two-year) price increase of 20%. The manufacturer contested the FOPH's time limitation. However, the Federal Administrative Court upheld the manufacturer's argument that such time limits may be imposed only for comprehensible and appropriate reasons, which the FOPH could not convincingly provide.


The FOPH had considered the product's new price to be cost effective and its efficacy and appropriateness to be undisputed. However, according to the Federal Administrative Court, the FOPH's on-going examination of alternative remuneration models with flat-rate tariffs does not justify such time limits, as a flat-rate remuneration already exists under Appendix 1 of the Healthcare Coverage Ordinance (SR 832.112.31).


The Federal Administrative Court also argued that the Federal Supreme Court accepts slightly higher prices for so-called 'niche products', due to the legal objective of ensuring the secure supply of medicinal products with low turnovers (see BGE 144 V 20 E 6.2). The court considered FOPH's time limit inadmissible as an ancillary provision.(1)


For further information on this topic please contact Andreas Wildi at Walder Wyss by telephone (+41 58 658 20 00) or email ([email protected]). The Walder Wyss website can be accessed at www.walderwyss.com.


 


Endnotes


(1) The full decision is available here.


 


 

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