1. What are the rules for passing on discounts?
The Swiss Health Care Act (SHCA) requires hospitals and outpatient service providers to pass on direct and indirect discounts granted to them by suppliers of medicinal products (see Art. 56 para. 3 let. b SHCA). With the revision of the Swiss Therapeutic Products Act, the legislator has confirmed this obligation and added the obligation of transparency. The focus is on discounts and reimbursements granted on the purchase of medicinal products.
2. What is a discount?
For medicinal products on the list of pharmaceutical specialities, a discount is considered to have been granted in particular if the price actually paid is lower than the ex factory price (see Art. 8 para. 1 of the Ordinance on Integrity and Transparency in relation to Therapeutic Products). According to the published practice of the competent authority (Swiss Federal Office of Public Health, FOPH), a discount can also be found if the price paid is higher than the ex-factory price. Whether this is the case should be determined on the basis how the tasks have been divided with the supplier.
The practice of the authorities, which differs from the wording of the regulation, makes it difficult to determine clearly and unambiguously what constitutes a discount. This is regrettable for reasons of legal certainty.
The published practice also contradicts the fact that neither the SHCA nor the implementing ordinances specify who is to provide the logistics services covered by the statutory distribution share ("Vertriebsanteil"). The law only defines the distribution share as a whole, not the individual services that make up the distribution share. Who provides these services and how they are remunerated is left to the agreement between the market participants.
3. Why is the pass-on obligation limited to the outpatient sector?
Discounts that are already included in the calculation of tariffs and prices due to lower costs are excluded from the pass-on obligation. They therefore do not have to be shown separately on the invoice. This is particularly the case for cost-based flat rates such as DRGs. Accordingly, the obligation to pass on rebates is limited to medicinal products used in the outpatient sector.
The challenge, however, is that many medicinal products can be used in both outpatient and inpatient settings. When these medicinal products are purchased, their subsequent use is not yet known.
4. Who is entitled to claim discounts?
Swiss health legislation stipulates that discounts must be passed on to the payer (see Art. 56 Para. 3 and 3bis SHCA). This is the premium payer, unless the insurer and the service provider have agreed otherwise. In the case of inpatient treatment, the insurer is the payer by law (see Art. 42 para. 2 sentence 2 SHCA).
It is questionable whether this result corresponds to the legislator's intention. The SHCA does not mention the cantons, which operate public hospitals. Moreover, the cantons are legally obliged to bear at least 55% of the costs of inpatient treatment (see Art. 49a para. 2ter SHCA). Any deficits resulting from the operation of the hospitals must also be borne by the cantons. It therefore seems incongruous that the discounts only go to the health insurers, while the deficits resulting from the operation of the hospitals have to be borne by the cantons and thus by the taxpayers.
5. What will be the impact of the latest amendments on the unified financing of health services on the passing on of discounts?
When the amendment to the SHCA on the uniform financing of services (EFAS) comes into force, the cantons will be obliged to pay a flat-rate contribution of at least 26.9% of all costs for all services reimbursed under the Swiss healthcare system, irrespective of whether the services are provided on an outpatient, inpatient or long-term care basis (see Art. 60 para. 4 SHCA).
In view of the cantonal cost sharing required by law, the question of the appropriateness of the current regulation, according to which discounts are to be passed on exclusively to the payer - to the exclusion of the cantons - becomes even more pressing. The current system is proving unsatisfactory.
6. What changes with the partial passing on of discounts?
Swiss law allows service providers to enter into an agreement with health insurers on the partial passing on of discounts. However, the obligation to pass on discounts applies regardless of whether the service provider has entered into such an agreement or not; it only changes the extent of the passing on: On the bases of such an agreement, the service provider is entitled to retain less than half of the discount. However, the service provider is not free to decide how to use this share. It must be used for a specific purpose, i.e. to improve of the quality of treatment.
The conclusion of an agreement to pass on part of the discount therefore does not release the service provider from the obligation to account for the discount and its use. On the contrary, Swiss health insurers are legally obliged to monitor the partial passing on and to inform the FOPH periodically of how they fulfil this obligation, including the use of the funds not passed on.
