Can Pharma Companies Set Any Price For New Drugs?

(MENAFN- Swissinfo) Ongoing discussions around drug prices prompted some Swissinfo readers to ask if it's true that pharma companies can set prices for new drugs as high as they want. This content was published on May 6, 2026 - 14:17 2 minutes

I report on the Swiss pharmaceutical industry and healthcare topics such as access to medicine, biomedical innovation, and the impact of diseases like cancer. I grew up just outside San Francisco and studied international affairs with a focus on development economics and healthcare policy. Prior to joining SWI swissinfo in 2018, I was a freelance journalist and a researcher on business and human rights.

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My work focuses on engaging with you, our audience, and strengthening trust in our journalism. I develop engagement tools such as multilingual debates and help distribute our content to users across platforms. A former nurse, I later pursued English linguistics and media studies where I developed a keen interest in journalism and news in the digital age.

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+ The high stakes fight over drug prices

When a pharmaceutical company launches a new drug, they have an exclusive right to produce and sell it for a period of time. This gives them a lot of power to name their price. However, there are limits to this.

Companies come up with a price using various methodologies but that isn't the final price when a drug is reimbursed by a payer such as a national health system or insurer.

In Switzerland, for example, authorities assess a drug's proposed price and efficacy against existing treatments and reference prices in comparable countries. Negotiations then take place to determine a maximum price, though failure to agree can result in the drug not being covered by basic insurance.

+ The drug-pricing problem no one wants to talk about

Authorities in countries like the UK and Sweden also weigh broader economic and patient benefits, such as reduced hospital stays, when deciding if a drug's price is justified.

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Government involvement in pricing is widespread in other places, from Brazil to Canada and China.

The US, however, has historically allowed insurers, middlemen, and pharmaceutical firms to set prices, though recent reforms have given the government a greater role in federal insurance schemes like Medicare.

Video text edited by Virginie Mangin

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This content was published on Apr 23, 2024 Switzerland's pharmaceutical sector supplies drugs worldwide, but not all countries receive them with the same price tag. Here's why.

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