The Swiss Federal Council has adopted and published a new report examining the prevalence and economic effects of administered prices in Switzerland. The report assesses how government-set or regulated prices affect competition, price levels and household purchasing power and concludes that their impact varies considerably depending on the market and regulatory design.

Administered prices play an important role in sectors such as healthcare, energy and public transport. While such interventions can address market failures, limit market power or safeguard public-service objectives, they may also distort incentives, restrict competition and create inefficiencies. According to the report, the overall prevalence of administered prices in Switzerland is broadly comparable to that in the EU, although partially administered prices account for a comparatively larger share of Swiss household expenditure.

The report examines four markets in greater detail: universal postal services, residential rents, seasonal import arrangements for fruit and vegetables, and reimbursable medicinal products. The case studies demonstrate that there is no uniform relationship between price regulation and competition. While government intervention remains justified in instances of structural market failures or public interests, the analysis reveals potential for enhanced competition in various examined markets.

The Federal Council therefore considers in its press release that a differentiated approach is required rather than a general reduction of administered prices. The Federal Council asserts that in areas with competitive potential, enhanced market-oriented regulations and measures to open markets may strengthen competitive pressure, lead to reduced prices, and ultimately enhance consumers’ purchasing power.

Regulatory work is already under way in the postal, residential rental and pharmaceutical sectors. In this light, the Federal Council currently sees no need for additional immediate measures and intends to consider the report’s findings in the ongoing reform processes.