7.5.2026
SL Insight Newsletter #33
GDP Adjustment under the MFN Framework: What the BAG Rejects, the U.S. Government Has Codified
Marcel Boller
In SL Insight Newsletter #32 dated May 4, 2026, we noted that the presentation by Jörg Indermitte, Head of the Pharmaceuticals Division at the Federal Office of Public Health (FOPH), at the Health Insurance Days 2026 made no mention of the GENEROUS reference price mechanism. Recent developments have further underscored this finding. On May 5, 2026, the Council of Economic Advisers (CEA) at the White House published the report “Savings from Most-Favored-Nation Drug Pricing Policy.” The report describes the calculation methodology that the U.S. healthcare system applies to Swiss drug prices.
What Jörg Indermitte says on slide 23 about purchasing power parity
The slide is titled “Pharmaceutical Rhetoric: Fearmongering – Threats – Lack of Transparency.” Among the points listed there as industry arguments is the demand that Swiss drug prices be adjusted for purchasing power, on the grounds that they are too low when domestic purchasing power is taken into account. The FOPH’s response to this demand is, verbatim: “Purchasing power parity for globally traded goods based on ex-factory prices? Are you trying to pull the wool over our eyes?”
This response is neither a technical analysis of the purchasing power parity method nor a substantive examination of the underlying economic mechanism. It dismisses a call for a methodological review as a rhetorical threat. This constitutes a public statement by the relevant Swiss authority: the application of GDP purchasing power parity to Swiss drug prices is not to be taken seriously.
What the CEA report of May 5, 2026, states regarding the PPP methodology
The report by the Council of Economic Advisers dated May 5, 2026, describes the methodology used by the U.S. government to determine the MFN reference price. In the section defining the MFN price, the report states that the net prices of the reference countries are adjusted—specifically: “International net prices will be adjusted by the ratio of gross domestic product (GDP) per capita in comparison to the U.S., using a purchasing power parity adjustment and the most recent data.”
The basket of reference countries includes the G-7 nations (excluding the United States), as well as Denmark and Switzerland. Switzerland is thus one of eight reference countries whose prices are included in the calculation after applying GDP purchasing power parity.
The adjustment for purchasing power, which the FOPH in Interlaken has portrayed as a rhetorical ploy, is thus documented as the U.S. government’s official method of calculation when dealing with Swiss prices. It is no longer an industry demand whose validity could be debated. It is the method used to translate the Swiss list of specialty items into the U.S. reimbursement system.
Why this difference has significant implications for Switzerland
The documented discrepancy between the BAG’s public position and the U.S. government’s official methodology has three specific consequences.
First: The institutional knowledge gap has been documented in ongoing SL proceedings. When a marketing authorization holder presents the international price reference implications of its Swiss pricing to the FOPH, it is dealing with an agency that has publicly characterized the underlying methodology as a rhetorical threat.
Second: For the Life Sciences Task Force established in early 2026 under the leadership of State Councilor Pierre Alain Schnegg, the slide is the most concrete evidence available that Swiss pharmaceutical price regulation does not institutionally reflect the international reference pricing mechanisms within which it operates. A recommendation for reforming the List of Specialties that does not address this knowledge gap does not do justice to the documented reality.
Third, the public rejection of a method that is firmly enshrined in official U.S. pricing policy serves as a clear indicator of how Switzerland is perceived internationally as a pharmaceutical hub. The global market access teams of the marketing authorization holders are reviewing the FOPH document and the CEA report in parallel. The consequence is not a confrontation with the Swiss authorities, but a quiet reevaluation of Switzerland’s position in the global launch sequence.
