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Swiss Multinationals versus the French Welfare State? The Social Security Deficit, European Integration, and the Battle for ‘Fair’ Drug Prices (1970–1990)

Published online by Cambridge University Press:  24 January 2024

Sabine Pitteloud*
Affiliation:
UniDistance Suisse, Brig, Switzerland
Pierre-Yves Donzé
Affiliation:
Graduate School of Economics, Osaka University, Japan

Abstract

Drawing on corporate and business association archives, this contribution investigates how Swiss multinational enterprises from the pharmaceutical industry (Ciba, Geigy, Hoffmann-La Roche, Sandoz) navigated governments’ interventions in France to preserve their profitability. Our analysis shows how diplomatic talks were crucial for Swiss firms having to cope with rising inflation and the freezing of drug prices, as well as increased customs controls targeting multinationals’ transfer prices. In particular, promises of future R&D were used as a tool in negotiations, and secrecy about prices and profits formation was key in maintaining pressure on the French government. The article also highlights that from the mid-1980s onwards, pharmaceutical multinationals promoted the creation of the Single Market, since it had the potential to enforce supranational rulings over national discretionary pricing policies.

Type
Article
Copyright
Copyright © The Author(s), 2024. Published by Cambridge University Press

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References

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21 To promote industrialisation and sovereignty in the pharmaceutical sector, many countries introduced import restrictions on finished pharmaceutical goods, which was a strong incentive for Swiss multinationals to further internationalise in the 1950s and 1960s; see Zeller, Globalisierungsstrategien, 162.

22 Ibid., 143.

23 Chauveau, Sophie, ‘Médicament et société en France au 20e siècle’, Vingtième Siècle. Revue d'histoire 73, no. 1 (2002): 169–85Google Scholar.

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26 Quirke and Slinn, Perspectives on Twentieth-Century Pharmaceuticals, 15.

27 Annex to a letter from Yves Dunant, Sandoz AG, to Dr. G. Winterberger, Direktor des Vororts des SHIV, entitled ‘Situation des filiales françaises des sociétés pharmaceutiques suisses- problèmes posés par la règlementation française des prix des spécialités pharmaceutiques remboursables et son application’, 28 Oct. 1976. AfZ, IB Vorort-Archiv, 317.5.1.1.

29 Financial Report, Jahresergebnis des Marktgebietes Frankreich, 1970. Roche Historical Archives [hereafter: RHA], FR.2.2.7 101135.

30 Financial Report, Finanzbericht Frankreich, 1975. RHA, FR.2.2.7 101147.

31 Laboratoires Ciba-Geigy SA, 1975–1979. Novartis Historical Archives [hereafter: NHA], RD 5.05.12.

32 Financial reports of Laboratoires Sandoz. NHA, Sandoz M 320.080.

33 Report, Groupe Sandoz, Septembre 1977. NHA, M 320.085.

34 Alexandre Jetzer, Vorort des SHIV, Note entitled ‘France: problèmes de l'industrie pharmaceutique suisse’, to Paul Veyrassat, 4 Feb. 1977. AfZ, IB Vorort-Archiv, 317.5.1.4.

35 Financial reports: Jahresergebnis des Marktgebietes Frankreich, 1970 RHA, FR.2.2.7 101135; Finanzbericht 1976, Frankreich. RHA, FR.2.2.7 101148.

36 News Article, ‘French Communists Spell Out Nationalisation Plans’, Europe, 11 June 1977. AfZ, IB Vorort-Archiv, 317.5.1.6.

37 André Dessot, ‘Le P.S. limiterait la nationalisation de l'industrie pharmaceutique aux grands groupes’, Le Monde, 17 May 1977. AfZ, IB Vorort-Archiv, 317.5.1.6.

38 Booklet, ‘Spécial Santé-Pharmacie. Solutions pour l'industrie du médicament en France’, Socialisme et Entreprise no. 27, Nov. 1977. AfZ, IB Vorort-Archiv, 317.5.1.11.

39 Werner Meyer, ‘Pharma-Industrie fühlt sich belagert’, Basler Zeitung, 6 June 1977. AfZ, IB Vorort-Archiv, 317.5.1.7.

40 Bhaskarabhatla, Regulating Pharmaceutical Prices, 12.

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42 Annex to a letter from Yves Dunant, Sandoz AG, to Dr. G. Winterberger, Direktor des Vororts des SHIV, entitled ‘Situation des filiales françaises des sociétés pharmaceutiques suisses- problèmes posés par la règlementation française des prix des spécialités pharmaceutiques remboursables et son application’, 28 Oct. 1976. AfZ, IB Vorort-Archiv, 317.5.1.1, 9.

43 Eichenberger and Mach, ‘Organized Capital’, 53–81.

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45 Internal Note entitled ‘Die Beziehung SGCI-Interpharma’, Dec. 1980. AfZ, IB Vorort-Archiv, 212.3.2.2.

46 Dominique Dirlewanger, Sébastien Guex and Gian Franco Pordenone, La politique commerciale de la Suisse de la Seconde Guerre mondiale à l'entrée au GATT (1945–1966) (Zürich: Chronos, 2004), 26; Sabine Pitteloud, Les multinationales suisses dans l'arène politique (Genève: Droz, 2022), 64. To open and secure foreign markets, French industry also benefited from the French diplomacy; see: Laurence Badel, Diplomatie et grands contrats: l'Etat français et les marchés extérieurs au XXe siècle (Paris: Publications de la Sorbonne, 2010).

47 A Federal Councillor is the equivalent of a minister (executive body) in the Swiss political system and is elected by the Parliament.

48 Such strategies focusing on structural economic power had already been used previously with France; see: Schaufelbuehl, La France et la Suisse.

49 Speech during an official visit in Paris by Conseiller fédéral Ernst Brugger, Chef du Département fédéral de l’économie publique, au sujet du point I de l'ordre du jour: problèmes concernant les filiales françaises des sociétés pharmaceutiques suisses en France, 6 Jan. 1977. AfZ, IB Vorort-Archiv, 317.5.1.3.

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52 Internal note from Alexandre Jetzer, Vorort, ‘France: problèmes de l'industrie pharmaceutique suisse’. to Paul Veyrassat, 4 Feb. 1977. AfZ, IB Vorort-Archiv, 317.5.1.4.

54 Letter from Paul Veyrassat, ‘France: négociations bilatérales concernant les problèmes pharmaceutiques’, to Louis von Planta, Président de l'USCI/Ciba-Geigy SA, 22 Feb. 1977. AfZ, IB Vorort-Archiv, 317.5.1.4.

55 Meeting proceedings of the Groupe de travail franco-suisse, ‘France: Problème pharmaceutique’, 10 Feb. 1977, AfZ, IB Vorort-Archiv, 317.5.1.4, 6.

56 Meeting proceedings of the Groupe de travail franco-suisse, 27 May 1977. AfZ, IB Vorort-Archiv, 317.5.1.6.

57 Note written by Nordasini, ‘Problèmes pharmaceutiques’, 17 Nov. 1977. AfZ, IB Vorort-Archiv, 317.5.1.11, 1.

58 Minutes of meeting, ‘Réunion du groupe de travail restreint franco-suisse pour l'examen des problèmes des industries pharmaceutiques’, Paris, 16–17 June 1977. AfZ, IB Vorort-Archiv, 317.5.1.7, 2–3.

59 Speech draft, ‘France: Problèmes pharmaceutiques’, prepared by the Swiss Delegation for the first meeting of the Working Party in Paris, 10 Feb. 1977. AfZ, IB Vorort-Archiv, 317.5.1.4., 17. On the efforts of the French fiscal administration to fight Swiss multinationals’ tax optimisation schemes see also: Ogle, Vanessa, ‘Governing Global Tax Dodgers: The “Group of Four” and the Taxation of Multinational Corporations, 1970s–1980s’, Business History Review 97, no. 3 (2023): 547–74CrossRefGoogle Scholar.

60 Memorandum ‘Annexe B, Majoration de la valeur en douane’, Berne, 4 Apr. 1977. AfZ, IB Vorort-Archiv, 317.5.1.5, 1.

61 Meeting Summary, ‘Réunion du groupe de travail restreint franco-suisse pour l'examen des problèmes des industries pharmaceutiques’, Paris, 16–17 June 1977, AfZ, IB Vorort-Archiv, 317.5.1.7, 3–4.

62 Memorandum ‘concernant les problèmes pharmaceutiques’, Berne, 4 Apr. 1977, AfZ, IB Vorort-Archiv, 317.5.1.5, 3.

63 On business obstruction regarding the collection of statistical data see: Guex, Sébastien and Schaufelbuehl, Janick M., ‘Les vertus de l'ignorance. Enjeux et conflits autour des statistiques sociales et économiques en Suisse au XXe siècle’, Economies & Sociétés 44, no. 9 (2011): 1555–74Google Scholar.

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65 Letter from Schweizerische Gesellschaft für chemische Industrie, Frankreich/Pharmaprobleme, to the interessierten Firmen, 24 Nov. 1978. AfZ, IB Vorort-Archiv, 317.5.1.16.

66 Summary by Dr Meyer, SGCI, Schweizerische Gesellschaft für Chemische Industrie, ‘Zusammenfassung der Besprechungen in Frankreich betreffend Pharmaprobleme’, 27 Nov. 1978. AfZ, IB Vorort-Archiv, 317.5.1.18.

67 Report, Handelsabteilung, ‘Bericht über die Pharma-Gespräche vom 10. Februar 1977 in Paris’, Bern, 18 Feb. 1977. AfZ, IB Vorort-Archiv, 317.5.1.4, 14.

68 AHN, Sandoz, M 320.080.

69 Note, 5 Jan. 1979. AHN, Sandoz, M 320.065.

70 Policy Statement by the Syndicat National de l'Industrie Pharmaceutique, ‘Commentaire concernant le projet de réforme’, 1977. AfZ, IB Vorort-Archiv, 317.5.1.6.

71 Summary by Alexandre Jetzer, Vorort, ‘Etat des travaux du groupe franco-suisse pour l'examen des problèmes des industries pharmaceutiques’, 22 June 1977. AfZ, IB Vorort-Archiv, 317.5.1.8, 5.

72 Summary by Yves Dunant, ‘Frankreich/Pharmaintervention, Lagebesprechung im Hinblick auf das Treffen der Commission Mixte’, 21 Oct. 1977. AfZ, IB Vorort-Archiv, 317.5.1.10.

74 Confidential note, ‘Intervention confidentielle de l'Ambassadeur de France auprès de l'Ambassadeur Moser, Selon dictée téléphonique de l'Ambassadeur’, 19 Oct. 1977. AfZ, IB Vorort-Archiv, 317.5.1.10.

75 Meeting minutes by Interpharma, ‘Protokoll über die Sitzung bei F. Hoffmann-La Roche & Co, Thema Frankreich’, 28 Feb. 1983. AfZ, IB Vorort-Archiv, 317.5.3.3.

76 Fligstein, Neil and Sweet, Alec Stone, ‘Constructing Polities and Markets: An Institutionalist Account of European Integration’, American Journal of Sociology 107, no. 5 (2002): 1217CrossRefGoogle Scholar; Davies, Bill and Rasmussen, Morten, ‘Towards a New History of European Law’, Contemporary European History 21, no. 3 (2012): 305–18CrossRefGoogle Scholar.

77 Notes to Bundesrat Honegger, ‘Frankreich: Unterzeichnung am Freitag 24 Februar 1978 eines Promemoria über die Probleme der schweizerischen pharmazeutischen Industrie in Frankreich’, 21 Feb. 1978. AfZ, IB Vorort-Archiv, 317.5.1.15.

78 Letter from Lusser, Handelsabteilung to Speringer, Robapahrm AG, 12 Aug. 1978. AfZ, IB Vorort-Archiv, 317.5.1.16.

79 Letter from Dr A. Zocca and A. Herzog, Interpharma, ‘Pharma-Preise Italien’, to the Direktion der Handelsabteilung, Basel, 19 May 1978. AfZ, IB Vorort-Archiv, 317.5.1.16.

80 Negotiation summary by Dr. Glättli, ‘Frankreich/Pharmaprobleme, Verhandlungen vom 12 Dec. 77 in Bern’, 15 Dec.1977. AfZ, IB Vorort-Archiv, 317.5.1.12.

81 Article, ‘France: Real Power to Lie with Four Wise Men Committee’, Europe, 1977. AfZ, IB Vorort-Archiv, 317.5.1.11.

82 Internal Note, ‘Besserung an der Pharmafront in Frankreich’, 11 Feb.1978. AfZ, IB Vorort-Archiv, 317.5.1.15.

83 Minutes of meeting by E Moser pour la délégation suisse, B. Schneiter pour la délégation française, ‘Groupe de travail franco-suisse pour l'examen des problèmes de l'industrie pharmaceutiques’, Paris, 23 Nov. 1979. AfZ, IB Vorort-Archiv, 317.5.1.18.

84 Minutes of meeting, ‘Réunion du 21 février 1980 à l'Ambassade de Suisse, présents pour l'Ambassade: Ambassadeur de Ziegler, le Ministre Mordasini, M. Bieler Secrétaire de l'Ambassade, pour Ciba-Geigy M Douaze, pour Robapharm M. Navko pour Roche’, 22 Feb.1980. AfZ, IB Vorort-Archiv, 317.5.1.18.

85 Telex from Ziegler, Ambassade de Suisse à Paris, to Emilio Moser, BAWI, 6 Feb.1980. AfZ, IB Vorort-Archiv, 317.5.1.18.

86 Summary of meeting, by M. Lusser, Chef de la Délégation suisse, and J.L. Keene, Chef de la Délégation française, ‘Compte-rendu de la réunion pharmaceutique franco-suisse’, 17 Mar. 1981. AfZ, IB Vorort-Archiv, 317.5.3.1, 3.

87 Internal Report, ‘Pharmaprobleme Frankreich, Bericht über die bilaterale Gespräche in Paris, 23–25 Nov. 1981’, 19 Dec. 1981. AfZ, IB Vorort-Archiv, 317.5.3.1, 3.

88 Claire Brisset, ‘Le plan de redressement de la Sécurité sociale’, Le Monde, 1 Oct. 1982.

89 Artikel, ‘Keine Pille gegen Protektionismus?’, SHZ-Branchenspiegel, 25 Nov. 1982, AfZ, IB Vorort-Archiv, 317.5.3.2.

90 Summary of the meeting, by the Direction de la pharmacie et du Médicament, Ministère de la Santé, République Française, ‘Compte Rendu de la réunion franco-suisse’, 13 Dec.1982. AfZ, IB Vorort-Archiv, 317.5.3.2, 3.

91 Summary of the meeting, Ministère de la Santé, Direction de la pharmacie et du médicament, Paris, 22 Mar. 1982. AfZ, IB Vorort-Archiv, 317.5.3.2, 6.

92 On the attempts of the pharmaceutical industry to withhold data: Pierre Fournier, Cédric Lomba and Séverin Muller, ‘Introduction’, in Les travailleurs du médicament. L'industrie pharmaceutique sous observation, ed. Pierre Fournier (Toulouse: Érès, 2014), 7–20.

93 Internal Note, Dr. Meyer, SGCI, ‘Pharma-Expertengespräche zwischen der Schweiz und Frankreich’, Bern, 18 Oct. 1982. AfZ, IB Vorort-Archiv, 317.5.3.2.

94 Article, ‘Wird Frankreichs Pharmazeutik zur zweiten Stahlindustrie?’, Basler Zeitungi, 26 Mar. 1979. AfZ, IB Vorort-Archiv, 317.5.1.17.

95 Article, ‘Les prix pharmaceutiques en 1983: hausses conjoncturelles, hausses conditionnelles’, Chimie Actualités, 13 Dec. 1982. AfZ, IB Vorort-Archiv, 317.5.3.2.

96 Minutes of meeting, Interpharma, ‘Protokoll über die Sitzung vom Montag bei F. Hoffmann-La Roche & Co, Thema Frankreich’, 28 Feb. 1983. AfZ, IB Vorort-Archiv, 317.5.3.3, 4.

97 Note to Haldimann, ‘Entretiens pharmaceutiques avec la France’, Bâle, 9 Mar. 1983. AfZ, IB Vorort-Archiv, 317.5.3.3.

98 Summary of the meeting, Ministère de la Santé, Direction de la pharmacie et du médicament, Paris, 22 Mar. 1982. AfZ, IB Vorort-Archiv, 317.5.3.2, 5.

99 Internal note, ‘Aktennotiz über das Gespräch von Dr. V. Planta mit Madame Cresso’, Paris, 29 May 1984. AfZ, IB Vorort-Archiv, 317.5.3.3.

100 Minutes of meeting by Interpharma, ‘Protokoll über die Sitzung bei F. Hoffmann-La Roche & Co, Thema Frankreich’, 28 Feb. 1983. AfZ, IB Vorort-Archiv, 317.5.3.3.

101 Letter from Sandoz France SA to the Direction de la Pharmacie et du Médicament, 19 Dec. 1984. AHN, Sandoz.

102 Report by Sandoz, ‘Evolution et perspectives des activités Sandoz en France’, 4 Nov. 1986. AHN, Sandoz, M 320.032.

103 Report by Roche, ‘Roche en France, faits et chiffres, 1992–1993’. AHR, LG.FR 103481.

104 Letter from Interpharma, ‘Betrifft Frankreich’ to the Bundesamt für Aussenwirtschaft, Basel, 6 June 1986. AfZ, IB Vorort-Archiv, 317.5.3.4.

105 Internal note by OFAE, ‘14. Séance du groupe de travail OFAEE-Industrie pharmaceutique pour l'Europe occidentale’, Berne, 10 May 1990. AfZ, IB Vorort-Archiv, 212.3.3.5, 3.

106 Meeting proceedings of the Working Party ‘France: Problème pharmaceutique’, 10 Feb. 1977, AfZ, IB Vorort-Archiv, 317.5.1.4, 2.

107 Article, ‘Produits pharmaceutiques: pour la Commission, le régime italien de formation des prix est illicite’, Europe, no. 2644, 22 Mar. 1979. AfZ, IB Vorort-Archiv, 317.5.2.4.

108 Fligstein, Neil and Mara-Drita, Iona, ‘How to Make a Market: Reflections on the Attempt to Create a Single Market in the European Union’, American Journal of Sociology 102, no. 1 (1996): 9CrossRefGoogle Scholar.

109 For a detailed explanation of these typologies see: Warlouzet, Governing Europe; van Apeldoorn, Transnational Capitalism.

110 Cowles, Maria Green, ‘Setting the Agenda for a New Europe: The ERT and EC 1992’, JCMS: Journal of Common Market Studies 33, no. 4 (1995): 501–26Google Scholar; Ballor, Agents of Integration.

111 On the EFPIA consultative role after 2001, see Cheynis, Éric, ‘Politique du médicament en Europe: La difficile constitution d'une prise de parole face à l'industrie’, Savoir – agir 16, no. 2 (2011): 5159CrossRefGoogle Scholar.

112 Report, Fédération Européenne des Associations de l'Industrie Pharmaceutique. AfZ, IB Vorort-Archiv, 212.3.3.4, 2.

113 Annual Report, European Federation of Pharmaceutical Industries' Association (EFPIA), 1980. AfZ, IB Vorort-Archiv, 212.3.3.1, 3.

114 EFPIA, ‘Completing the Internal Market for Pharmaceuticals: A European Pharmaceutical Industry Position’, 1985. AfZ, IB Vorort-Archiv, 212.3.3.4, 8.

115 Letter from R. von Werdt, Dr. R. Stamm, Ciba-Geigy, ‘Betrifft: Frankreich-Problèmes pharmaceutiques’ to Dr. H Glättli, Sandoz, 21 June 1977. AfZ, IB Vorort-Archiv, 317.5.1.7.

116 EFPIA, ‘Completion of the Internal Market: Future Marketing Authorisation System, EFPIA Comments to the Commission of the European Communities’, Sept. 1988. AfZ, IB Vorort-Archiv, 212.3.3.5.

117 EFPIA, ‘A brief guide to the EEC Directive concerning medicines’, 1987. AfZ, IB Vorort-Archiv, 212.3.3.4.

118 Article, Europolitique, no. 1415, 1988. AfZ, IB Vorort-Archiv, 212.3.3.5. On the ambivalence of several European policy scenarios for the industry since the 1970s, see Warlouzet, Governing Europe.

119 Report by Gruppe BAWI-Pharmaindustrie, ‘Die schweizerische Pharmaindustrie in Westeuropa, Aktionslinien für die schweizerischen Behörden und die pharmazeutische Industrie’, May 1987. AfZ, IB Vorort-Archiv, 317.5.3.4, 3.

120 On German multinationals facing similar price control and custom issues in Belgium, France and Italy since the 1970s, see Marx, Wegbereiter der Globalisierung, 99–100.

121 Report by Gruppe BAWI-Pharmaindustrie, ‘Die schweizerische Pharmaindustrie in Westeuropa, Aktionslinien für die schweizerischen Behörden und die pharmazeutische Industrie’, May 1987. AfZ, IB Vorort-Archiv, 317.5.3.4, 8. Such strong involvement of Swiss companies regarding European policy-making and within EFPIA is also confirmed in interviews collected by Baljer: Baljer, Between Rent-Seekers and Free Marketeers, 235.

122 On the French promotion of research projects, see Georges Saunier, ‘Eurêka: un projet industriel pour l'Europe, une réponse à un défi stratégique’, Journal of European Integration History 12 (2006): 57–74. On their neo-mercantilist vision, see Laurent Warlouzet, ‘The European Commission Facing Crisis: Social, Neo-Mercantilist and Market-Oriented Approaches (1967–85)’, European Review of History 26, no. 4 (2019): 703–22.

123 Internal report, Interpharma News, no. 2, Sept. 1989. AfZ, IB Vorort-Archiv, 212.3.3.5, 15.

124 Report by Gruppe BAWI-Pharmaindustrie, ‘Die schweizerische Pharmaindustrie in Westeuropa, Aktionslinien für die schweizerischen Behörden und die pharmazeutische Industrie’, May 1987. AfZ, IB Vorort-Archiv, 317.5.3.4, 6–7.

125 On the tensions between regionalisation and global free trade, see: Bürbaumer, Benjamin, ‘TNC Competitiveness in the Formation of the Single Market: The Role of European Business Revisited’, New Political Economy 26, no. 4 (2020): 115Google Scholar; Pitteloud, Sabine, ‘Les multinationales comme catégorie politique: les années formatrices (1970–1990)’, Entreprises et histoire 104, no. 3 (2021): 93110CrossRefGoogle Scholar.

126 Summary of meeting, by BAWI, ‘13. Sitzung der Arbeitsgruppe BAWI-Pharmaindustrie im Bereich Westeuropa im Bern am 23 Aug. 1989’, 28 Aug. 1989. AfZ, IB Vorort-Archiv, 212.3.3.5, 2.

127 Sauer, ‘Les grandes étapes de l'Europe du médicament’, 68.

128 See, for instance, for recent regulation attempts in India: Bhaskarabhatla, Regulating Pharmaceutical Prices, 229.

129 Zeller, Globalisierungsstrategien, 176.

130 The Economist, Pharmaceuticals, Feb. 1987.