‘A multifaceted approach to reimburse high-priced drugs'

Domestic research team “Need to review the general price cut mechanisms in place and play caution in extending RSA subjects”

Domestic research team “Need to review the general price cut mechanisms in place and play caution in extending RSA subjects” “Korea lacks a financial management system to manage high-priced drugs listed through the general process other than the

Insurance claims for high-priced drugs that exceed KRW 10 million per patient, rose 4.4 times in 11 years

It has been pointed out that a financial management plan needs to be established for high-priced drugs listed through the general system, as well as a system to evaluate and manage the performance of high-priced drugs that were granted reimbursement through the risk-sharing agreement (RSA) scheme in order to manage the soundness of the National Health Insurance drug finances.

 

In other words, the criticism was that health authorities need to devise multifaceted drug price negotiation models to manage health insurance finances spent on high-priced drugs listed through the general process as no other mechanism than the one that reduces a drug’s price upon patent expiry exists in the current state.

 

In the case of the RSA system, although there had been requests to expand the scope of eligible drugs, the same people pointed out that it is necessary to carefully review such expansions in consideration of the uncertainty of Korea’s health insurance finances.

 

The suggestions above were made in the “Patterns of National Health Insurance Spendings for High-Priced Medicine in Korea,” which was researched by Hye-Jae Lee (Professor, Korea National Open University), Ji-Hyung Hong (Professor, Gachun University ), Eun-Young Bae.

 

(Professor.

 

College of Pharmacy, Gyeongsang National University) The research team analyzed the claims data of Korea’s National Health Insurance from 2010 to 2021, and defined drug with annual per-patient costs exceeding KRW 10 million as 'high-priced drugs.

 

The claims of such high-priced drugs, which accounted for 3.0% of the NHI pharmaceutical expenditure in 2010 (KRW 388.4 billion), rose to account for 8.0% of the NHI pharmaceutical expenditure by 2021 (KRW 1.69 trillion).

 

This is over a 4.4% increase in 11 years, underlining the need and importance of strengthening management of high-priced drugs.

 

During the same period, the annual amount of pharmaceutical expenditures rose by 4.7%, compared with the 14.3% rise in expenditures spent on high-priced drugs.

 

The number of covered high-priced drugs rose from 34 to 209 in the same period and the number of patients from 17,896 to 77,737.

 

This research team defined high-priced drugs based on per-patient costs into low-high-priced drugs (KRW 10 million to 500 million), moderately-high-priced drugs (KRW 50 million to 100million), high-priced drugs (KRW 100 million to 300 million), and ultra-high-priced drugs (over KRW 300 million).

 

By price, low--high-priced drugs, and moderately high-priced drugs accounted for most of the total drug expenditure, accounting for 79.1% of all high-priced pharmaceutical expenditures.

 

6.0% were moderately high-priced drugs, 10.4% were high-priced drugs, and 4.5% were ultra-high-priced drugs.

 

Among the findings, one thing to note was that among low-high-priced drugs that accounted for 79.1% of all , high-priced pharmaceutical expenditures., the proportion higher for RSA drugs (87.7% ) compared with generally listed drugs (65.4%).

 

The research team also found it interesting that low-high-priced drugs were more likely to be listed through RSA, while ultra-high-cost drugs were more likely to be listed through the general listing process.

 

In particular, the proportion of high-priced drugs was higher among drugs that were granted reimbursement through RSA than through the general listing process.

 

In terms of the proportion of claims filed for high-priced drugs with per patient expenses exceeding KRW 100 million, the rate was 23.0% for generally listed high-priced drugs, much higher than the 9.9% of RSA high-priced drugs.

 

Based on the results, the research team suggested that a financial management plan for generally listed high-priced drugs needs to be established.

 

The research team pointed out that there is a lack of innovative financial management measures to reduce healthcare expenditures for generally registered high-value drugs other than the mechanism of reducing the drug price when the patent expires.

 

In particular, the researchers analyzed that high-priced drugs listed through the general listing process that have been on the market for more than 10 years have already passed the period of surge in usage, and because of the nature of rare diseases, there is often no surge in claims, so the drugs cannot be applied price cuts through price-volume agreement negotiations.

 

"Nevertheless, the absolute number of patients using such drugs is rising due to the introduction of new hemophilia drugs and enzyme drugs, and claims for these two drug types are steadily increasing.

 

When applying PVA negotiations, the parties need to take into account various circumstances such as price changes in overseas reference price countries and listing status of alternative treatments." Furthermore, given that many high-cost drugs are anticancer drugs and are managed within the RSA framework, the researchers suggest that the RSA system should be reviewed and the performance of the financially based types of reimbursement and expenditure-cap types should be evaluated.

 

"Some have suggested expanding the number of drugs eligible for financial-based RSA schemes, but this should be done with caution to effectively manage the uncertainties in health insurance finances.

 

The RSA system should be reviewed and a long-term financial monitoring system be established for high-priced drugs."