Gov’s halts price cut discussions on generics

Ministry of Health and Welfare and health insurance authorities show no movement since TF meeting in April

Pharmaceutical industry 'Might have had to control the speed ahead of the reevaluation of listed drugs… more information is necessary to increase predictability'

Pharmaceutical companies in Korea are carefully monitoring the government's direction in improving the pricing system of generic drugs, including the government's insurance ceiling price policy.

 

The Ministry of Health and Welfare was known to be contemplating a system with the health insurance authorities to further reduce the price of generic drugs after 3 years through a stepped pricing system.

 

However, with no specific movement being observed in that direction for several months, there have been speculations that the government has temporarily halted the pursuit of additional price cuts on generic drugs.

 

On the 7th, the pharmaceutical industry began to assess the atmosphere surrounding MoHW’s drug pricing policy on generics.

 

Previously, MOHW, centering around the 2nd Vice-Minister of Health and Welfare Park Min-Soo, started exploring improvement measures to prevent the mushrooming of generics in the market.

 

One measure mentioned was to further the price reduction imposed on generic drugs.

 

As MOHW’s drug pricing policy aimed to expand accessibility for patients with severe and rare diseases who require high-cost drugs and rationalize the prices of generic drugs that lead to excessive competition in distribution, there was speculation that the upper price limit of 53.55% that was set for generic drugs could be adjusted or the number of differential price reductions for listed drugs with the same ingredients be reduced.

 

However, no progress in the area has been made for several months since the internal meeting was conducted between the MOHW, the Health Insurance Review and Assessment Service, and the National Health Insurance Service regarding the drug pricing policy on generics in April.

 

Therefore, the speculation is that the MOHW is controlling the speed of price reduction of generic drugs.

 

MOHW may have felt it burdensome to create additional measures for the price reduction of generic drugs ahead of the reevaluation of the ceiling price (criteria) that will be held for listed generic drugs.

 

This speculation has been supported by the fact that the scheduled TFT meeting between the MOHW, HIRA, and NHIS for drug pricing policies of generics in June was postponed.

 

However, MOHW has not proclaimed a specific stance regarding the pricing system of generics.

 

This means that it is difficult to hastily judge whether the government has halted its pursuit to impose price cuts on generic drugs.

 

Given the situation, pharmaceutical companies are focusing on the actions of MOHW to formulate countermeasures in line with the administrative direction.

 

An official from a pharmaceutical company stated, “For now, MOHW has halted the scheduled meetings on drug pricing policy on generics with HIRA and NHIS.

 

With the reevaluation of the standards for listed drugs scheduled in the second half of the year, there are speculations that the MOHW may have slowed down its pace in pursuing additional revisions in drug pricing policies on generics.

 

However, some expect partial differential price cuts may be imposed on generic drugs, even if the ceiling price is not adjusted" An official in charge of drug pricing from another pharmaceutical company said, "For the pharmaceutical industry, the news that MOHW has halted additional drug price reductions is a significant development.

 

However, we cannot be at ease until the MOHW presents specific policy directions regarding drug price cuts.

 

Many pharmaceutical companies are preparing various arguments and evidence against drug price cuts." In addition, with the upcoming announcement of the final version of the Second Comprehensive Plan of National Health Insurance this year, pharmaceutical companies are demanding a clearer policy direction from MOHW so that they can increase predictability in order to respond to government policies.

 

A representative from another pharmaceutical company said, “In addition to the drug pricing policies on generics, MOHW has not yet released the final version of its policy on preferential pricing for breakthrough therapies after their discussions with private-public consultative bodies in the first half of the year.

 

As this coincides with the formulation of the Second Comprehensive Plan of the National Health Insurance, pharmaceutical companies are contemplating on how to strategize their management policies accordingly.

 

It would be desirable for the government to gather a wide range of opinions and take actions to prioritize predictability for companies and provide support for future management decisions, rather than being solely driven by political considerations.”