[Reporter’s View] NHI finances and reimb expansions

Considerations for the new administration

Striking a balance between improving the financial sustainability of the national health insurance system and enhancing patient access to drugs for rare and intractable diseases is a national issue.

 

The two issues that repeatedly come into conflict have long occupied the attention of all political parties in their search for solutions, yet a clear and definitive answer has remained elusive.

 

With ample finances, there would be no need to agonize over finding concrete solutions.

 

The problem is that the surplus funds available for drug expenses within the health insurance budget are becoming increasingly scarce.

 

The global paradigm for new drugs is rapidly shifting from chemical drugs to biopharmaceuticals.

 

Global big pharmas are focusing on developing ultra-high-priced one-shot treatments for severe and intractable diseases for which there are no effective drugs, and the number of biopharmaceuticals approved in Korea is increasing accordingly.

 

This in turn is increasing the health insurance authorities' concerns.

 

There are an increasing number of cases where expensive drugs with therapeutic effects proven through clinical trials are being developed, but there are insufficient financial resources to ensure patient access to each and every drug that emerges with health insurance coverage.

 

Another issue is that the entry of ultra-high-priced drugs for severe and intractable diseases developed by global big pharmas into the Korean market poses an unintended threat to domestic pharmaceutical companies.

 

In order to increase reimbursement for ultra-high-priced drugs within the limited national health insurance budget, the easiest measure is to reduce the insurance ceiling price (drug price) of existing drugs to create financial leeway.

 

This means that the prices of drugs manufactured by most domestic pharmaceutical companies that maintain their business with generic drugs are likely to fall.

 

Drug price experts often describe the repeated administrative practice of lowering prices of already approved drugs to fund high-cost drugs as a zero-sum game.

 

This expression metaphorically describes the reality of having to balance two conflicting priorities: expanding treatment opportunities for patients with severe and rare diseases while also supporting the domestic pharmaceutical industry, both of which are inextricably linked to the limited national budget.

 

As such, the new administration is tasked with the challenge of reducing or eliminating the conflict zone between two zero-sum goals: “enhancing the sustainability of the national health insurance finances” and “improving access to new drugs.” Among the many ways to solve this problem, this reporter has two suggestions for the new administration based on the opinions of drug price experts.

 

First, I ask the government to take the courage to pursue a new agreement on the allocation of health insurance drug expenses and consider the establishment of a separate fund for severe and intractable diseases, targeting high-cost drugs, as an additional funding source.

 

This means reducing health insurance drug costs for mild diseases (by increasing patient copayments) and launching a process to gather opinions and reach a consensus across society and the public on expanding reimbursement for severe diseases, while at the same time securing additional financial resources with the mission of improving access to high-cost drugs.

 

Both are expected to face significant challenges in implementation, but given the recurring zero-sum nature of the issue, it is an issue that cannot be ignored any longer.

 

President Lee Jae-myung has repeatedly pledged to design a true Korea.

 

We hope that the process of deriving a social consensus on a genuine health insurance policy aligned with the principles and philosophy of the National Health Insurance System will take its first steps in tandem with the design of a true Korea.