Winner of pricing suits will be compensated for damages

Will this reduce the number of stay of executions

MOHW reports to HIPDC that it will implement a refund system for lawsuits

36 delays in price cuts occurred during the past 3 years due to stay of executions… causing ₩400 billion fiscal damage

Bill prepared to clarify remedies provided for damages incurred by companies…may choose lump sum or price raise

The countless litigations between government and companies regarding reimbursements such as drug price cuts or reduced scope of reimbursement are causing wasteful losses to both parties.

 

On this, the government and the National Assembly have been proposing various solutions to prevent excessive stay of executions.

 

The NA has proposed an amendment to the National Health Insurance Act which allows government authorities to recover the reflective profits the companies accrued during the suspension of execution period if it wins the main lawsuit, and refund them to companies when vice versa after a pharmaceutical company applies for administrative litigation and suspension of execution in opposition to the disposition of drug price cuts.

 

The bill passed the plenary session after passing the Health and Welfare Committee's bill review subcommittee.

 

The biggest contributor to the implementation of this refund system was the stay of execution the companies filed with their drug pricing lawsuits.

 

The stay of execution is filed by a pharmaceutical company to suspend execution of the government’s drug price cut disposition based on the presumption of innocence.

 

In general, the court cites or accepts the stay of execution request because of ‘irrecoverable damages’ that may occur from the company’s aspect.

 

Since 2018, 36 out of 38 stays of executions were accepted, with the other two suits withdrawn.

 

Most of the litigations have resulted in favor of the government.

 

The problem is that the company’s only option during the suit to defend its drug price is to use the stay of execution and minimize damage or maximize profits during the litigation period.

 

In this case, any cost that arises from the non-change in the drug price during the trial period results in a loss in health insurance finances.

 

The government estimates that the financial loss caused by the suspension of drug price cuts since 2018 amounts to nearly ₩400 billion.

 

Broadly applied to price cuts, reimbursement suspensions, selective reimbursement, etc.

 

Will include added interest… price-cut drugs may choose either a lump-sum payment or price raise The refund system will be used to reduce such side effects.

 

The system will be applied when a stay of execution filed by the pharmaceutical company is dismissed at the administrative ruling or litigation, but accepted in the original suit.

 

In other words, the system will be applied when the government loses and the pharmaceutical company wins the suit.

 

The compensation for damages will be applied to all pharmaceutical dispositions that are directly related to pharmaceutical sales, such as pricing adjustments, reimbursement suspensions or exclusions, reduced scope of reimbursement, selective reimbursement (changed copayment rate), etc.

 

If these requirements are met, the NHIS needs to pay the pharmaceutical companies for the losses as a “binding act,” meaning that the government must compensate for losses.

 

The government has decided to announce the standard rules and amendments to the medical insurance benefit criteria next month.

 

Considering the administrative procedures such as legislative notice, regulatory review, legislative review, and public announcement, the amendment is expected to be implemented within the first half of next year.