US Medicaid Program Will Hit Swiss Wallets Hard, Roche CEO Says

Deals between pharmaceutical companies and the U.S. government to reduce drug prices are likely to drive higher costs for new medicines in Switzerland over time, according to Thomas Schinecker, CEO of Swiss drugmaker Roche Holding AG (OTC:RHHBY).

Speaking to Swiss newspaper Tages-Anzeiger, Schinecker said recent agreements aimed at lowering prices for medicines sold in the U.S. Medicaid program reflect Washington’s broader push to rebalance how global markets pay for pharmaceutical innovation.

On Friday, Genentech, a Roche company, announced an agreement with the U.S. government that lowers costs for state Medicaid programs. 

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Genentech will also expand its recently-launched direct-to-patient program for its essential flu medicines and make the program available via TrumpRx.gov.

Other Drugmakers Strike Similar U.S. Deals

Other companies that announced similar pricing deals with the U.S. government, include Bristol Myers Squibb Co. (NYSE:BMY), Gilead Sciences Inc. (NASDAQ:GILD), Merck & Co. Inc. (NYSE:MRK), Novartis AG (NYSE:NVS), Amgen Inc. (NASDAQ:AMGN), Boehringer Ingelheim, Sanofi SA (NASDAQ:SNY) and GSK plc (NYSE:GSK).

Reuters highlighted that the White House has argued that the deals prevent other countries from benefiting from U.S.-funded innovation through strict price controls.

Schinecker said U.S. policymakers want wealthier nations to shoulder a greater share of research and development costs.

GDP-Linked Pricing Could Raise Swiss Drug Costs

Citing Schinecker, the Reuters report added that the U.S. authorities are expected to factor in the economic strength of individual countries when assessing appropriate drug pricing.

Nations with a higher gross domestic product per capita than the United States would likely face higher prices for new medicines, reflecting their greater prosperity.

World Bank data show Switzerland’s GDP per capita exceeds that of the U.S. under both current dollar and purchasing power parity measures.

Schinecker said that while existing medicines in Switzerland would not become more expensive, pricing for future launches would likely follow the new framework.

CEO Warns of Gradual but Uneven Global Impact

“For Switzerland, this would mean more; for Italy, less than in the U.S.,” he said, adding that the aim is for all economies to make comparable contributions toward the investment required to develop new therapies. Any changes, he emphasized, would occur gradually with each new product launch rather than overnight.

The prospect of rising drug prices has drawn concern from Swiss politicians.

Schinecker warned that resistance to higher prices could have consequences. Delays in launching new medicines in Switzerland could follow if pricing disputes persist, he said.

He added that Denmark, Germany, France, Britain, Italy, Japan, Canada, and Switzerland are being used as reference countries for U.S. drug pricing discussions. Roche is already engaged in talks with several of them.

The pricing issue is also expected to feature in broader negotiations between Bern and Washington, including efforts to formalize a November agreement aimed at reducing U.S. tariffs on Swiss goods.

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