Gov’t sets criteria for drug shortage prevention

…measure is expected to improve the profitability of shortage prevention drugs

7th meeting of the Biohealth Innovation Committee held

Fund to be established for late-stage clinical trial companies that develop biobetters, etc.

Prime Minister Min-seok Kim chaired the 7th Biohealth Innovation Committee at the Government Complex Seoul on the 5th

The government will improve the criteria to raise the prices of drugs essential for patient treatment.

 

Specifically, it will establish detailed evaluation criteria for price adjustment requests submitted by pharmaceutical companies that deem the current insurance price ceiling unreasonable.

 

Prime Minister Min-seok Kim chaired the 7th Biohealth Innovation Committee at the Government Complex Seoul on the 5th and discussed measures to foster Korea into a biohealth powerhouse with government and private sector members.

 

The meeting covered major issues such as improving drug price standards, revising the cost calculation method for exit prevention drugs, and expanding support for late-stage clinical bio venture funds.

 

First, the criteria for designating drugs subject to drug shortage prevention measures will be revised upward to align with the changing pharmaceutical market environment in consideration of how their stable supply would affect the population as well as the fiscal expenditures required from the national health insurance.

 

There have been calls from the field that the current criteria for designating drugs subject to drug shortage prevention measures, which have been in place since 2017, lack practicality, and there is a consensus that the minimum threshold amount needs to be revised to reflect factors such as inflation rates.

 

In response, the government plans to publicly disclose by the end of the year a price adjustment criteria for such essential medicines, which will comprehensively consider factors such as the medical necessity, availability of alternatives, the number of suppliers of the same formulation (including whether the product is de facto the only drug supplied), and the supply situation of the drug, when evaluating price increases for drugs whose maximum prices have been announced and deemed significantly unreasonable by pharmaceutical companies.

 

The government stated that through this, it expects to realistically adjust the minimum benchmark amount for selecting drugs to prevent withdrawal from the market by reflecting factors such as inflation rates, and to evaluate whether to adjust the maximum price based on drug price adjustment criteria that comprehensively consider actual supply conditions, thereby improving the profitability of essential drugs for patient care.

 

Additionally, based on results of a recent study on improving the system for drug shortage prevention drugs, the government will revise part of the Standards for the Determination and Adjustment of Drug Prices (Appendix 5) to improve the cost calculation method for such medications, with the revised standards to be implemented in the first half of next year.

 

The system improvements that will be made through revisions to the relevant regulations are expected to ensure preservation of appropriate production costs for drug shortage prevention drugs, leading to an increase in drug prices and enhanced supply stability for such drugs.

 

Discussions on support for biotech companies were also held.

 

The government is considering the establishment of a specialized fund for companies with ongoing or complete Phase III clinical trials that possess candidate substances or pipeline for innovative new drugs and biobetters.

 

This is expected to enable domestic pharmaceutical and venture companies with excellent capabilities to secure sustained investment for Phase 3 clinical trials, which require significant time and costs, thereby increasing the likelihood of developing blockbuster new drugs.

 

The government also plans to establish a basic-specialized-advanced step-by-step support system to help domestic companies enter the global market in response to the rapidly changing global pharmaceutical environment and provide customized consulting services.

 

In addition, the government plans to provide specialized information through workshops on approval and licensing of advanced pharmaceutical and biotech products, produce online educational videos, and publish expert articles.

 

Discussions were also held on expanding customized cost support in response to regulatory tightening in advanced countries such as the United States and the EU.

 

To prepare for the tight regulations in advanced countries such as the FDA and MDR, the government plans to adjust the schedule for announcing customized cost support programs (from March 2024 to January 2025) to extend the support period for selected companies in the same year.

 

Also, the government plans to change the project operation method to allow continuous cost support without additional project solicitations after monitoring the first-year performance when selecting this year's support recipients.

 

Through these measures, domestic companies will be able to alleviate the financial burden and human resource shortages associated with certifications for the U.S.

 

FDA and European MDR.

 

In order to respond to the rapidly changing global pharmaceutical environment, the government plans to establish a step-by-step (basic-specialized-advanced) support system for domestic companies to advance into the global market and provide customized consulting services.

 

Discussions were also held on a project being carried out by the Korea Disease Control and Prevention Agency (KDCA).

 

The KDCA’s project supports the development of mRNA vaccines for pandemic preparedness in order to secure a vaccine platform that can be developed at a rapid pace in preparation for future pandemics.

 

This project is a large-scale research project with a total budget of KRW 505.2 billion, which will support research and development tasks from preclinical to Phase III clinical trials over four years (2025-2028) with the goal of obtaining approval for a COVID-19 mRNA vaccine by 2028.

 

The preliminary feasibility study was exempted in 2024, and the total budget and project period were finalized in March this year through a review of the appropriateness of the project plan.

 

The KDCA confirmed the selection of four non-clinical trial project institutions in April and is currently supporting research and development to enter Phase I clinical trial in December of this year.

 

To ensure the smooth implementation of the project, the KDCA's mRNA Vaccine Development Support Team and the Korea Health Industry Development Institute are planning the project and managing the performance targets.

 

If the COVID-19 mRNA vaccine is developed through the project, it will not only ensure a stable supply of vaccines for high-risk groups but also enable the rapid development of vaccines within 100 to 200 days using Korea’s own mRNA vaccine technology in the event of a future pandemic.