What are important changes in regulation and what is to be expected from the markets in 2024? The co-heads of Kellerhals Carrard's Life Sciences Practice Group share their perspective on key developments.

Cost containment package in the Council of States and revision of pricing provisions

The Federal Health Insurance Act (HIA) is currently undergoing revisions as part of the 'Cost Containment Package 2'. Ongoing discussions now focus on the establishment of price models in the specialty list (proposed Article 52b HIA), their exemption from the Freedom of Information Act (proposed Article 52c HIA), and a proposal introduced during the debate on the provisional reimbursement of medicinal products (proposed Article 52d HIA). In 2024, the Council of States will review this proposed revision, following the National Council's review last year.

"The effectiveness of this revision in enhancing patients' access to medications remains uncertain"

As of January 1, 2024, the new provisions of the Health Insurance Ordinance (HIO) and the Health Insurance Benefits Ordinance (HIBO) have come into effect.

The revised regulation pertains to the pricing of medicinal products and their reimbursement in individual cases (Article 71a-d HIO). The effectiveness of this revision in enhancing patients' access to medications remains uncertain. Claudio Helmle, our co-head of the Life Sciences Practice Group, will provide a commentary on this revision in an upcoming article in the legal journal Life Science Recht.

Finding balance between EU and Swiss law on medical devices

Swiss medical device regulation seeks a balance between compatibility with European legislation through autonomous adoption of domestic law, and avoiding unnecessary regulatory burdens imposed by European law. While the Swiss legislator is continually integrating the European Medical Device Regulation (MDR) and the In-vitro Devices Regulation (IVDR) into Swiss law and agency practice, another significant project is underway. On November 28, 2022, the Swiss Parliament tasked the Federal Council with motion 20.3211 'For more room for manoeuvre in the procurement of medical devices for the care of the Swiss population'.

"The implementation of motion 20.3211 could open up significant opportunities for operators"

The Federal Council is to amend national law so that, in addition to medical devices with the CE mark, Switzerland also recognizes medical devices from non-European regulatory systems with comparably strict requirements, particularly medical devices approved by the U.S. Food & Drug Administration (FDA) for the USA.

The Swiss Federal Council's proposal is still pending but is expected as early as 2024. It can be said that the implementation of the motion could open up significant opportunities for operators. Jörg von Manger-Koenig, our co-head of the Life Sciences Group, has shared his extensive experience in medical device regulation in Switzerland, the EU, and the USA in several discussions and assessments of what to expect from such regulation, and will continue to do so.

Optimism for venture-backed financing in biotech and life science

To better understand the current landscape of biotech financing, we engaged with C-level executives from small to mid-sized biotech firms, venture capital investors and our colleagues of our startup and venture capital desk.

Despite a significant drop in venture-backed investments in Swiss companies, the investment in Swiss biotech and other life sciences companies remained fairly stable in 2023.

"The recovery of both the M&A and IPO markets is expected to bolster venture-backed financing in 2024"

«We expect that innovative companies will persist in securing financing, although the valuations may be more conservative than in previous years», says Nicolas Mosimann, co-head of the Startup Desk at Kellerhals Carrard.

Our optimism is bolstered by the surge in M&A activity over the past year, with notable deals including the acquisitions of Seagen (USD 43 billion), Prometheus Biosciences (USD 10.8 billion), and ImmunoGen (up to USD 10.1 billion).

Additionally, a substantial number of acquisitions occurred in the mid and higher three-digit million range, such as the acquisition of Swiss T3 Pharmaceuticals by Boehringer Ingelheim and of Swiss-Dutch Calypso Biotech by Novartis. We also anticipate an upswing in the IPO market, following the solid increase of the SPDR S&P Biotech ETF (XBI) by 7.6% in 2023. The recovery of both the M&A and IPO markets is expected to bolster venture-backed financing in 2024.

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