Federal Administrative Court, Decision C-1308/2017 of 7 August 2019

29. August 2019 – In its decision of 7 August 2019, the Federal Administrative Court annulled an order of the Federal Office of Public Health (FOPH) which limited the increase of the price of a medicinal product on the list of specialities for a period of only two years.

Due to the increased costs caused by the loss of two suppliers, the manufacturer of the product had requested a price increase on the basis of art. 67 para. 2 of the Health Care Insurance Ordinance (Verordnung über die Krankenversicherung; SR 832.102). Originally, the FOPH had rejected the price increase on account of its own (different) price calculations and arguing that the manufacturer had already requested a doubling of the price in 2008. After the manufacturer contested this order, the FOPH – after reconsidering the order twice – ordered a temporary price increase of the requested 20%. Subsequently, the manufacturer contested the ordered time limitation.

The Federal Administrative Court recognized the manufacturer's argument that a time limit may only be imposed for comprehensible and appropriate reasons which the FOPH was not able to provide convincingly. The FOPH also considered the new price to be cost-effective, and the efficacy and appropriateness of the product were undisputed. Also, the FOPH’s currently on-going examination of alternative remuneration models with flat-rate tariffs do not justify a time-limit, since the possibility of a flat-rate remuneration already exists today (appendix 1 of the Health Care Coverage Ordinance, Krankenpflege-Leistungsverordnung; SR 832.112.31). The Court, moreover, argued that the Federal Supreme Court accepts slightly higher prices for "niche products" due to the legislative objective of ensuring the security of supply of medicinal products with a low turnover (cf. BGE 144 V 20 E. 6.2). Thus, the time limit is inadmissible as an ancillary provision. For the full decision, see here.