The PV guideline amendments may not be applied on Jan. 1st

Schedule coincides with the NHIS’ internal reorganization schedule such as the personnel appointments, etc.

Also, more time is required to review the industry’s opinion statement due to strong opposition from the industry

It is believed that the improvement of the detailed guidelines for the Price-Volume agreement negotiations (PV) prepared by the National Health Insurance Service may not be implemented on January 1st of next year.

 

This is in part due to the authorities’ internal affairs including its reorganization schedules, but also due to the strong opposition shown by the industry regarding the amendment.

 

However, the NHIS plans to finish the guideline amendments through discussion with the Ministry of Health and Welfare by February next year when the selection of pharmaceuticals subject to monitoring for PV negotiations begins.

 

The NHIS had presented a plan on improving the PV negotiation reservation (exclusion) system at the 10th public-private consultative meeting that was held on the 2nd.

 

The improvements proposed included the revision of Article 6.1.1 of the guideline that calls for expanding the "same product group with an annual claims amount of less than ₩1.5 billion" to "less than ₩2 billion" and Article 6.1.2 that reduces "items with an upper limit of less than the arithmetic average of the main component code” to “less than 90% of the arithmetic average”.

 

The increase of the claims amount from ₩1.5 billion to ₩2 billion was made based on the reference standards used when legislating the guidelines in 2014.

 

At the time, the average claims amount in 2012 was ₩1.52 billion.

 

Products that are less than 90% of the arithmetic average follow the negotiation conditions set for new drug negotiations Among new drugs, drugs that are listed without pricing negotiations usually accept a price at 90% of the weighted average of alternative drugs, therefore, the standards for PV negotiations were also set in line with this standard to less than 90% of the arithmetic average to be exempt from negotiations when the company voluntarily cuts its drug price by 10%.

 

Upon the announcement, the pharmaceutical industry submitted a statement opposing the PV guideline improvements.

 

The industry conveyed its position that the amount subject to exclusion from PVA that is set for the same product group with an annual claims amount of less than ₩1.5 billion should be set to ₩10 billion or less, and items whose price is less than the arithmetic average should be maintained at the present state.

 

The Korea Pharmaceutical and Bio-Pharma Manufacturers Association said, “In line with the purpose of implementing the price-volume linkage system, the negotiation endeavors need to focused on mid-to-large sized items whose use increased to exceed ₩10 billion and the amount subject to exclusion from PVA be set to all drugs below ₩10 billion.

 

The arithmetic average is a social convention and an absolute standard for judging whether the insurance finances can be saved, and therefore, it is in line with the system to exclude drugs that cost under the arithmetic average from negotiations.” Meanwhile, the NHIS plans to first review the opinion statement submitted by the pharmaceutical industry, then discuss it with the MOHW to prepare a plan for the final PV guidelines.

 

However, it seems that it will take some time for the PV guideline improvements to be prepared and announced as personnel transfers of Deputy Ministers and Director-Generals in HIRA's Drug Price Management Office may occur this week or early next week at the latest.