Price-Volume Agreement negotiations to be finalized soon

Government partially accepts industry opinion

Larger price cuts that were set for bioequivalence-tested drugs were applied qualitatively during negotiations

Some companies chose to refund claims rather than price cuts for their item...Price will be adjusted in September.

The ‘Type C’ price-volume agreement (PVA) negotiations are expected to be completed next week.

 

When the negotiations are complete, the insurance price ceiling of the subject items is expected to be adjusted from September after passing the Health Insurance Policy Review Committee review this month.

 

According to the industry sources on the 6th, negotiations for the PVA ‘Type C’ items started in July and are expected to be finalized next week.

 

The negotiations involved 60 product groups that contain identical ingredients.

 

The Type C negotiation is conducted for drugs that do not fall under 'Type A' or 'Type B', which are negotiated upon listing, and whose claims for the same product group from the 4th year of listing have increased by more than 60% from the claims of the previous year, or by more than 10% but exceeds KRW 50 billion.

 

Most Type C drugs are generic drugs that have received a set price upon listing.

 

The National Health Insurance Service conducts Type C negotiations every year with the goal of adjusting the insurance price ceiling of subject drugs by September of the same year.

 

During this year's negotiations, in particular, the pharmaceutical companies enjoyed increased options due to the amendment made to the details of the operating standards.

 

For example, drugs whose usage has temporarily increased due to inevitable reasons such as the COVID-19 pandemic can choose to refund part of their claims instead of lowering the price.

 

In the first round of negotiations that were given the option, several companies reportedly opted for the refund option.

 

In addition, innovative pharmaceutical companies or companies with an R&D ratio of 10% or more, which have been subject to PVA negotiations 3 times within 5 years, will be eligible for a 30% less price reduction than the amount calculated via the reference formula rate in its third time.

 

Although small, there are reportedly a small number of companies that have agreed to negotiate their price using this option.

 

The pharmaceutical industry had previously expressed concerns to the government on how drugs that have completed bioequivalence tests for the price ceiling reevaluations may be subject to larger price cuts during PVA negotiations.

 

The logic is that the price difference between a drug that has maintained its price through bioequivalence testing and the weighted average price of the same-ingredient drug becomes larger than the weighted average price of drugs with the same ingredient, resulting in a larger price reduction during PVA negotiations.

 

In response, the pharmaceutical industry requested price adjustments for drugs that underwent bioequivalence tests for a prior reevaluation, considering how the companies have followed government policy.

 

In response, the NHIS is said to have partially accepted the industry's opinion and reflected it qualitatively during negotiations.

 

As a result, it is observed that all the negotiations will be completed within the deadline this year.

 

"We understand that the negotiations will be completed by next week," said an industry official, "and the results will be announced after being reported to the HIPDC this month."