[Reporter's View] No more exemptions, just deferrals

Government will defer, not exempt companies from submitting pharmacoeconomic evaluation data

The Korean government has set out to fix the pharmacoeconomic evaluation exemption system.

 

Although the authorities coined it as an “improvement,” the direction seems to be near a “reduction.” A report on a study commissioned by the Health Insurance Review and Assessment Service was released at the end of last year.

 

The study, titled 'Study on Preparing a Plan to Improve the System for Exemption from Submission of Pharmacoeconomic Evaluation Data,' analyzed the current status and issues of Korea’s pharmacoeconomic evaluation exemption system, which was introduced in 2015, and proposed measures for its improvement.

 

The report claims that the core of the improvement plan is to change the exemption system into a deferral system.

 

The report pointed out that the core of the positive-listing system is the cost-effectiveness evaluation, therefore, Korea should not exempt drugs from evaluations when other countries do conduct evaluations.

 

Based on the research results, HIRA proposed a revision of the current PE exemption system.

 

To this end, the HIRA and the Korean Research-based Pharmaceutical Industry Association (KRPIA) recently held their first meeting.

 

The industry's reaction to this is understandably grim.

 

The PE Exemption System is literally the only way out for drugs that are difficult to evaluate but deemed necessary.

 

It contains various financial control devices and has embraced an "expenditure cap" design since its inception.

 

In fact, the industry has been constantly claiming that the current system has too high a threshold and has consistently emphasized the need for its expansion.

 

Of course, the contents of the recent report will not be reflected 100%.

 

However, the proposed measures in the report will hardly be satisfactory for the industry.

 

Even now, it is not easy for companies to apply for the PE exemption system, and the number of eligible drugs will be significantly reduced if the reform is implemented.

 

For example, contrary to how the current 200 patients or fewer (the usual threshold required to be eligible for the PE exemption) requirement refers to the number of patients that fall within the drug's scope of use, the proposed reforms refer to a stand-alone disease, meaning that a drug that would have been eligible if it met the 200 patients or fewer requirement based on its genotype or line of therapy indication must now have 200 or fewer patients affected by the disease itself.

 

The fundamental purpose of deferring the PE exemption is more difficult to understand.

 

The pharmaceutical industry has constantly requested the application of a flexible ICER threshold.

 

And we have heard endlessly about how Korea’s ICER threshold is too strict for drugs to be reimbursed.

 

It is doubtful whether drugs that would not have been listed if not for the PE exemption system will be able to remain reimbursed when evaluated after the deferred period.

 

If some regulations are tightened, some need to be loosened as well.

 

The government is already planning to save national health insurance finances by implementing bold drug price reduction mechanisms such as external reference pricing reevaluations and revision of the price-volume linkage system.

 

It may be that the number of applicable drugs has increased since the implementation of the system, rendering improvements necessary.

 

However, it is also true that this system has served as a 'breathing hole' in Korea's listing system, we need to devise other ways out before closing that hole.