NHIS extends Bavencio’s reimb...adds KRW 20 bil sales

but authorities deem the reimbursement extension to rather save NHI finances

First immuno-oncology drug to be reimbursed as first-line maintenance therapy for urothelial cancer

The reimbursement extension is expected to reduce the use of Keytruda, which is being used in the second-line

Merck

Korea's 6th immuno-oncology drug, 'Bavencio Inj,’was granted a reimbursement extension and will be covered for the first-line treatment of urothelial cancer from next month.

 

With the reimbursement extension, the drug is expected to secure annual sales worth more than KRW 10 billion like the other immuno-oncology drugs.

 

'Bavencio is the first drug to be granted reimbursement as a first-line treatment for urothelial cancer.

 

The Health Insurance Review and Assessment Service announced the news through the 'Opinion Inquiry on Amendment to Public Notice for Drugs Prescribed and Administered to Cancer Patients (Draft),’ effective as of August 1st.

 

Bavencio Inj (avelumab) was approved in Korea as the 6th immuno-oncology drug in March 2019.

 

As an anti-PDl-L1 immunotherapy drug, the drug was granted reimbursement for the rare condition, metastatic Merkel cell carcinoma (MCC) in 2020.

 

Currently, a total of 8 immuno-oncology drugs, starting with BMS’s ‘Yervoy (ipilimumab)’ in December 2014, followed by MSD’s ‘Keytruda (pembrolizumab),’ Roche’s Tecentriq (atezolizumab),’ AstraZeneca’s ‘Imfinzi (durvalumab),’ Merck’s Bavencio (avelumbab),’ GSK’s ‘Jemperli (dostarlimab),’ then AstraZeneca’s ‘Imjudo (tremelimumab).’ All immunotherapy drugs other than Jemperli and Imjudo are reimbursed in Korea.

 

Immuno-oncology drugs are breaking new sales records every year, receiving reimbursement extensions based on groundbreaking effects on various types of cancer.

 

Last year, based on IQVIA, Keytruda posted sales of KRW 239.6 billion, Opdivo KRW 109.9 billion, Tecentriq KRW 81.8 billion, Imfinzi KRW 52.4 billion, and Yervoy KRW 14.2 billion.

 

Only Bavencio failed to meet the blockbuster criteria, posting KRW 500 million won in sales last year, but reimbursement as first-line treatment for urothelial cancer approved this time is expected to enable the drug to raise over KRW 10 billion in sales.

 

Urothelial cancer is a common term used to refer to malignant tumors originating from the lining of the urinary system that constitutes the mucosal layer of the urinary tract.

 

It includes bladder cancer, renal pelvic cancer, ureteral cancer, and urethral cancer, with the most frequently occurring cancer being bladder cancer.

 

Platinum-based chemotherapy has been used as the standard first-line treatment, and when the disease progresses or recurs, platinum-based chemotherapy is re-administered or drugs such as Keytruda and paclitaxel were used as second-line treatments.

 

Bavencio is the first immuno-oncology drug to be used as monotherapy for the first-line maintenance treatment of adult patients with locally advanced or metastatic urothelial cell carcinoma who have not progressed on platinum-based chemotherapy.

 

The NHIS estimated the number of urothelial cancer patients that would use Babencio to be about 670 per year and agreed with the pharmaceutical company on the estimated claims amount of KRW 21.65 billion.

 

In other words, the reimbursement extension guarantees additional sales of KRW 20 billion won per year.

 

However, actual sales are expected to be less as the company signed a refund type and expenditure cap type risk-sharing agreement (RSA).

 

Bavencio also lowered its insurance price ceiling by 30% with the reimbursement extension, from KRW 1,226,243 per vial to KRW 854,864 per vial.

 

However, Bavencio’s reimbursement extension is not expected to significantly affect insurance finances.

 

Rather, it is expected to have the effect of saving NHI finances.

 

This is because of the amount of Keytruda used.

 

NHIS expects the use of Keytruda, which is being used as a second-line treatment for urothelial cancer, will decrease with the reimbursement extension of Bavencio.

 

Immunotherapy drugs cannot be administered in the second line if another immunotherapy drug is used as first-line maintenance therapy.

 

Therefore, the NHIS estimated that the actual amount of fiscal spending, unlike the expected claims amount, will range between KRW -1.84 billion to KRW 5.57 billion.

 

Currently, Keytruda is granted reimbursement for 7 indications in 4 cancer types, including as a first-line treatment for metastatic non-small-cell lung cancer.

 

In addition, as it has recently applied to extend reimbursement to 13 indications, its use in cancer is expected to expand further in the future.

 

Therefore, the reimbursement authorities will have to continue to contemplate ways to minimize the spending of health insurance finances while expanding the reimbursement of effective immuno-oncology drugs.