[Reporter’s View] Forxiga withdrawal raises concern

Is the withdrawal of Forxiga potentially the beginning of the phenomenon referred to as 'Korea Passing'?

AstraZeneca, the UK-based global pharmaceutical company, is withdrawing its diabetes treatment Forxiga (ingredient: dapagliflozin) from the Korean market, ten years since its approval in 2013 in Korea.

 

Initially approved as SGLT-2 inhibitor-class diabetes treatment, Forxiga achieved success as its indications were expanded to include conditions like heart failure and kidney disease.

 

Forxiga generated sales of 55 billion won in the previous year.

 

However, AstraZeneca has decided to withdraw Forxiga from the Korean market, giving up annual sales of 50 million won.

 

This decision entails not only the supply halt, but also the withdrawal of approval and reimbursement.

 

What factors have influenced AstraZeneca to make such a decision?

 

The prevailing analysis suggests that reduction in drug pricing was a significant factor in Forxiga’s withdrawal.

 

The primary reason for the withdrawal of Forxiga is widely attributed to the price reduction resulting from the expiration of its patent.

 

AstraZeneca Korea contested the government’s price reduction measure and initiated administrative litigation against them.

 

Having granted suspension of the measure, Forxiga’s current drug price will be maintained through February.

 

However, there is no guarantee that the price of Forxiga will remain at its current level after February.

 

Forxiga’s price could be adjusted to 53.55% of its current price, which is around 730 won, due to patent expiration.

 

Additionally, further reductions in the drug price may be possible due to expanded reimbursement criteria and the price-volume agreement program (PVAP).

 

The drug price of Forxiga in Korea is currently less than 1/30th of the price in the United States.

 

Further price reductions could potentially lead to complications in manufacturing.

 

Furthermore, the cost for conducting clinical trials to expand its indications to include heart failure and kidney disease is substantial.

 

Another factor that may have influenced Forxiga’s withdrawal is that price reductions in Korea can affect drug pricing in neighboring countries.

 

East Asian countries, including China, Japan, Taiwan, and others, may demand drug price reductions referencing the price in Korea.

 

As a global pharmaceutical company, the company needs to consider the potential impact on drug prices beyond Korea.

 

Furthermore, factors such as commission expenses from joint marketing agreements and heightened competition resulting from generic releases may have influenced this decision.

 

The concern is that the current withdrawal of Forxiga could be the beginning of the phenomenon known as ‘Korea Passing’ by global pharmaceutical companies.

 

Entering the Korean market can be challenging for global pharmaceutical companies seeking to establish a presence in East Asia.

 

The reductions in drug pricing and insurance reimbursement policies applied to innovative drugs make the Korean market less attractive to global headquarters.

 

While it's understandable that the government seeks to implement fiscal measures to improve savings in a single national healthcare system like Korea's, global pharmaceutical companies cannot create a 'special drug pricing' exclusively for Korea.

 

Furthermore, Korea employs various methods to reduce drug prices, including reevaluations of reimbursement adequacy, clinical reevaluations, price-volume agreements, and overseas price comparisons.

 

Technology advancement is expected to result in the continuous development of innovative new drugs.

 

Survival rates for diseases that were once life-threatening have improved for patients, and there is hope for recovery in the case of rare and incurable diseases.

 

If these innovative new drugs cannot enter the domestic market in the future, Korean patients may have to seek medical treatment abroad.

 

For patients to access innovative new drugs, there needs to be more communication between the government and pharmaceutical companies.

 

It should not be a unilateral announcement, but an open approach aimed at improving patients’ access to innovative new drugs.