Countries covered: Switzerland
The Swiss pharmaceuticals market is characterised by the dominance of two heavyweight domestic players, high prices and low generic penetration, according to BMI's newly-published ""Switzerland Pharmaceuticals & Healthcare Q3 2006 Report"". Nevertheless, the market is still growing due to the continuous introduction of new products and an ageing population, much like the rest of Western Europe.
Switzerland has yet to shrug off the unwanted label of a pharmaceutical ""high-price island"" after a report compiled by the Swiss association of medical insurers - Santesuisse - found that the cost of medicines is on average 20% above levels in neighbouring countries, with generics priced nearly 25% higher. However, the pharmaceutical industry association Interpharma said that the figures used in the research were out of date and misleading. As a result of government intervention, the value of the Swiss pharmaceuticals market increased by only 3.5% in 2005, the lowest rise in ten years, and well below the global average of 7%. According to BMI, the value of the pharmaceuticals market in 2005 was US$4.64bn.
The decline in growth was primarily attributed to two cost-containment initiatives introduced by the government. In Q305, industry and the government agreed that the highest possible price that can be charged for a generic drug would be 70% of the price of the original product, which led to more generics being prescribed because they were cheaper. Then, at the beginning of 2006, the government introduced a new regulation to further encourage the uptake of generic drugs. Under the rule, patients will make a lower co-payment - 10% of the medicine's price rather than 20% - if they are taking a generic version of a branded drug. This initiative was even more successful than the earlier one because it directly affected patients' pockets, and again led to more generics being prescribed and reduced pharmaceutical expenditure overall.
BMI's adjusted Business Environment Rankings for Western Europe reveal that Switzerland has improved its position compared to last quarter and now ranks second behind leader Germany. However, it must be noted that the primary reason for this improvement has more to do with worsening conditions in neighbouring countries rather than Switzerland becoming more attractive. The country scores well for political and economic risk, but is let down by average market growth and its small population. An additional positive is that the government is reluctant to impose far-reaching cost-cutting measures - as seen in many European countries recently - due to the powerful pharmaceutical industry lobby operating in the country.
The two multinationals based in Switzerland - Novartis and Roche - are generally acknowledged to be among the most successful pharmaceutical companies over the last five years. While Novartis has sought diversification through developing its Sandoz generics division and acquiring the remainder of US biotechnology company Chiron, Roche has focused on lucrative anticancer therapeutics. Both firms are ambitious with Roche currently reconstructing its headquarters in Basel and Novartis making a sizeable investment in an influenza anufacturing facility in the US.
Key Benefits of Report
Rely On Our Independent 5-Year Forecasts As A Benchmark
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Exploit Latest Competitive Intelligence & Company SWOTS
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Additional Information
Scope of Report
Executive Summary & Industry SWOT
An at-a-glance perspective on latest regulatory developments, key forecast indicators and major corporate developments, covering the prescription, OTC and generics markets. The SWOT outlines strategic factors which affect BMI’s forecast analysis, and taken together with BMI’s Economic and Business Environment SWOTS, give a complete overview of market climate.
Market Summary
Outline of market characteristics, growth factors, leading therapeutic segments and a competitivness of the market.
Regulatory Regime
Guide to and analysis of country intellectual property developments and pricing & reimbursement issues, which constitute the regulatory make-up of the market.
Industry Developments
Focus on government healthcare reforms, epidemiological trends, company M&As, product launches, market entries, FDI activity, R&D and patent legislation.
BMI 5-Year Industry Forecast
5-Year Forecasts to end-2010 for all key industry indicators (see list below), supported by explicit assumptions, plus analysis of key downside risks to the main forecast, including:
Drug market expenditure (US$bn); drug expenditure per capita (US$); as % of gdp
Prescription drug market (US$bn)/as % of total market; sales by alimentary tract/metabolism; antibiotics, cardiovascular, central nervous system, oncology, musculoskeletal and respiratory system
OTC market (US$bn)/as % of total market (sales by analgesic, cough and cold, digestives, skin treatments, vitamins and minerals)
Generics market (US$bn)/ as % of total market
Health expenditure (US$bn, % of gdp and per capita); public sector health expenditure as % of total; number of hospitals; beds, hospital admissions, doctors, births and deaths per 000 population
Forecasts based on bespoke BMI economic modelling, using historical data sets of macroeconomic and industry variables to derive rigorous statistical relationships, anchored in advanced linear regression techniques.
BMI 5-Year Macroeconomic Forecasts
BMI forecasts for all headline macroeconomic indicators, including:
Nominal and real GDP, % real GDP growth, % private consumption growth, % industrial output growth, % consumer price index, % GDP price deflator, exports, imports, trade balance, current account balance, foreign direct investment, exchange rate against US$, government expenditure, external debt
Competitive Landscape & Profiles
Intelligence on the market position of major MNC power houses and indigenous companies. BMI profiles key research-based companies. Company SWOTS are provided for all key strategic players, complete with a company activity overview, its leading products and analysis of business opportunities.Related Reports:
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