Gov't releases generic drug price comparison study results

“as a means to conduct pricing reevaluations in the future”

Final meeting scheduled for Nov. 27... Exclusion of the highest and lowest price among A8 countries will likely be used as a comparison

Excluding the highest price, such as those set in the U.S. and elsewhere, could lead to price cuts for hyperlipidemia drugs, deteriorating sales performance of generics

The government's decision to fully disclose the 'Study on Measures to Improve the Generic Drug Pricing System,' which ended in April, ahead of the final meeting for the external reference pricing reevaluations, is being analyzed as a sign that the authorities intend to push ahead its plan to cut generic drug price through reevaluations.

 

In particular, the industry believes the government is using media to publicize the study findings that the generic drug price is up to 10 times more expensive in Korea than in other countries, excluding the U.S., as a means to justify the reevaluation.

 

According to industry sources on the 25th, the 10th meeting on the external reference pricing reevaluations is scheduled for the 27th.

 

The government is reportedly planning to finalize the process of collecting opinions from the pharmaceutical industry within this month.

 

Therefore, the 10th meeting is expected to be the final meeting between the government and the industry.

 

In this situation, there are voices that the recently released study on how to improve the generic drug pricing system is just the government’s means to justify its plan for external reference pricing reevaluations.

 

The study compared drug prices with the A7 countries (Canada, France, Germany, Italy, Japan, Switzerland, and the United Kingdom), excluding the United States, where generic prices are relatively high.

 

As a result, as of 2022, the price of hyperlipidemia generics in most countries was 0.09 to 0.41 times cheaper than those in Korea.

 

However, the study concluded that the comparison of Korean generic drug prices with those of A8 countries showed differences by efficacy group and API and that there is a limit to unilaterally applying price cuts to generic drugs.

 

The pharmaceutical industry analyzes that the comparison of drug prices excluding the U.S.

 

used in the study is similar to the recent government's proposed external reference pricing reevaluation, which suggested using an adjusted average price that excludes the highest and lowest prices among the A8 countries.

 

This is because excluding the highest price removes the U.S.

 

price, which has the highest generic drug prices, from the comparison.

 

As shown in the study, excluding the U.S.

 

price will lead to Korea having relatively high prices for hyperlipidemia drugs, and domestic pharmaceutical companies are concerned that the performance of related generic drugs will suffer from the price cuts that may follow.

 

An industry official said, "Off-patent drugs can become cheaper abroad than in Korea over time.

 

In foreign countries, generics occupy a higher market share than the original over time, so they can maintain sales even at the lowered price." On the other hand, the industry official explained that there is no difference between Korea and the A8 countries when comparing generics that newly entered the market upon patent expiry.

 

"It is problematic to compare overall prices based on only one aspect when generic prices vary depending on the time of launch or disease.

 

We should be giving incentives to increase the generic drugs’ market share and grow the market pie like foreign countries." The study also proposed the creation of a market structure that allows generic drugs to gain competitiveness.

 

For example, in order to create a drug pricing structure where drug prices can be reduced over time after generics enter the market, it is necessary to strengthen not only the pricing policies used at the time of drug listing but also policies to encourage the use of low-priced products in the field.

 

However, the government will likely first focus on lowering domestic generic prices through external reference pricing system.