"A9 countries not used for drug pricing reevals next year"

The adjusted foreign drug pricing references system cannot be applied to drug pricing reevaluations next year...unilateral price cuts also not applied

MOHW conducts its first official opinion inquiry on its plan to expand foreign reference countries to A9

Needs to notify 1 year in advance to conduct reevaluations...“not ready yet”

The government announced that it will not immediately apply its plan to increase the number of foreign drug price reference countries by 2 in its reevaluations next year.

 

The foreign reference drug pricing system is essentially used to evaluate the price of reimbursed drugs in Korea.

 

Also, regarding the pharma-bio industry’s concern, the government firmly said using the A9 price as a reference for unilateral drug price cuts in the future does not fit the purpose or objective of the system.

 

At a recent meeting with the multinational pharmaceutical company press corp, Oh Chang-Hyun, Director of Pharmaceutical Benefits at the Ministry of Health and Welfare, said so regarding questions on the MOHW’s plan to expand the number of foreign drug price referencing countries.

 

According to the government, the currently used drug price decision method has an unclear reference basis, so the MOHW commissioned a research service for 'Measures for Improving Foreign Drug Price Reference Standards' in 2019, based on which it prepared the revision plan.

 

The plan was part of the 1st Comprehensive Plan of National Health Insurance.

 

The research service results proposed the inclusion of Taiwan, Australia, and Canada in the current A7 (US, UK, France, Germany, Italy, Switzerland, and Japan).

 

The government decided to amend the current standards by including Canada and Australia, countries that have similar or slightly smaller economic levels and pharmacuetical industry scales, and review the price calculation formula.

 

Director Oh said, “We included the two countries that evaluate the economic feasibility of public health insurance through HTA (health technology assessment) as these countries assess drug price based on clinical usefulness.” The government and the Health Insurance Review and Assessment Service are collecting industry and expert opinions on systemic reform.

 

According to Director Oh, the industry opinion inquiry that is set until the 11th is the first official external opinion inquiry being issued for the system.

 

The industry’s concerns are clear.

 

Australia and Canada’s drug prices are generally lower as they are not new drug developing countries, therefore referring to the price of these countries will naturally lower Korea’s price level and reduce the drive for new drug development.

 

The area that the industry worries the new system may soon be applied was in the reevaluation of patent-expired drugs next year.

 

Also, the industry expressed concerns about how the system may be further applied to unilateral drug price cuts in the future.

 

Adding on to the concerns, the possibility remains that applying the steeped pricing system may further reduce the drug price.

 

Regarding concerns over reevaluations, Director Oh clearly stated that it is physically impossible for the revision to be applied next year for patent-expired drug reevaluations.

 

Director Oh said, “We need to prepare around 1 year in advance to conduct such reevaluations, In other words, we need to make announcements a year in advance.

 

As we have not made any announcement until now, it is impossible to conduct reevaluations next year.” Also, another reason is that the government nor HIRA has the resources to conduct the reevaluation as large-scale reassessments on reimbursement adequacy of drugs are already set to be conducted next year.

 

Director Oh said, “We are not ready to conduct foreign drug price reevaluations next year as the reevaluation of drugs that have submitted bioequivalence data (reevaluation of reimbursed drug prices for already-listed bioequivalence test subjects) and reevaluation of reimbursement for 8 ingredients are in progress." Also, Oh added that applying the A9 countries for unilateral drug price cuts will not be feasible as it does not meet the purpose or objective of the revision.

 

"Using our plan to reevaluate the foreign drug reference system and applying it to unilateral price cuts does not fit the purpose of our reform.

 

The government never mentioned that it will be used for unilateral price cuts.”