Preferential pricing delayed for homegrown new drugs

Industry expresses concerns over delays in preferential pricing measures that were to be set for homegrown new drugs

The amendment made to reflect the innovative value of new drugs excludes measures for homegrown new drugs

The measures for homegrown new drugs may likely be included in the MOHW’s amended regulations… when the measures will be introduced is unclear due changed Division of Pharmaceutical Benefits director

The delay in issuance of a revised draft that includes preferential drug pricing measures for domestic new drugs is raising concerns in the pharmaceutical industry.

 

This month, a revised draft that reflects the innovative value of new drugs was released by the Health Insurance Review and Assessment Service, but the revision lacked a measure for homegrown new drugs.

 

The preferential treatment for such homegrown new drugs was expected to be included in the amendment to the Ministry of Health and Welfare’s “Criteria for Decision or Adjustment on Drugs,” but it is difficult to predict when the notification of the amendment will be issued due to the recent change in the Director Division of Pharmaceutical Benefits at MOHW.

 

On the 8th, HIRA issued an amendment to the "Criteria for Detailed Evaluation of Drugs Subject to Negotiation, such as New Drugs" upon DREC deliberations.

 

The amendment included: ▲ New criteria for flexible ICER threshold evaluation; ▲ Addition of severe diseases to the risk-sharing agreement scheme; ▲ Omission of the Drug Evaluation Committee review when expanding the reimbursement range of RSA drugs that claim less than KRW 1.5 billion; ▲ New conditions that require submission of clinical evidence such as RWD and RWE when renewing RSA schemes.

 

However, the draft did not include preferential treatment of domestically developed drugs, which raised questions in the industry.

 

The plan to apply preferential measures for homegrown new drugs was already included in the ‘2024 Implementation Plan for the 2nd Comprehensive National Health Insurance Plan’ in April.

 

The plan contained preferential drug pricing measures for companies that lead healthcare innovation through R&D investment, supply of essential drugs, job creation, and stable supply and plans to expand the scope of new drugs eligible for preferential pricing and risk-sharing agreement to include those made by pharmaceutical companies with a high R&D ratio.

 

It also included content that generic drugs that contain ingredients designated as national essential drugs will be given higher drug prices than other generics if they newly registered the drug after using domestic ingredients.

 

The Ministry of Health and Welfare announced that it would revise the criteria for determining and adjusting drug prices by the first half of this year.

 

However, the amendments have not been made two months into the first half of the year, raising concerns among some in the industry that it will become a non-event.

 

In particular, the Director of the Division of Pharmaceutical Benefits of MOHW, who is in charge of the work, was replaced last month, making the timing of the amendment less predictable.

 

The MOHW changed the Director of the Division of Pharmaceutical Benefits from Chang-hyun Oh (currently the Director of the Division of Health Industry Promotion) to Yang-soo Song on March 29th.

 

The new director Song is an administrative officer who past the 50th Public Administrative Examination and has served as the head of the research and planning department at the Korea Centers for Disease Control and Prevention's Korea National Institute of Health.

 

An industry insider said, “There is also talk that the new head, Song, is reviewing the preferential pricing treatment for homegrown new drugs again.

 

At first, The amendment was expected to be released in the first half of the year, but no news has been heard on its issuance even after HIRA issued an amendment to the ‘Criteria for detailed evaluation of drugs subject to negotiation, such as new drugs.’” HIRA and the NHIS are having difficulty giving a clear answer on when the measure will be implemented, except that the MOHW is reviewing it.

 

The new Director Song is reportedly revisiting major issues of industry interest, from preferential drug pricing for homegrown new drugs to raising the maximum reduction rate for Price-Volume Agreement drugs, to external reference pricing reevaluations.

 

As such, there is talk that the review and outcome may differ from the new review.

 

In particular, as the price of homegrown new drugs that are currently being reviewed for reimbursement by HIRA may change depending on Song’s review, the industry is eyeing its outcome.

 

Another industry official said, “There are many areas that need to be addressed through notification, such as RSA for domestic non-inferior new drugs.

 

There are also drugs that are currently under review that are applicable, which is why the pharmaceutical industry is eagerly awaiting MOHW’s notification.”