Industry expects improved pricing measures by new gov't

Pharmaceutical industry's anticipation rises on the new government's reforms on drug pricing incentives and post-marketing surveillance

Closely eye specific measures on drug price incentives linked to new drug R&D ratio

Need to resume public-private consultation body for integrated post-marketing drug price management

The domestic pharmaceutical industry is closely monitoring the direction of the Lee Jae-Myung administration's preferential drug pricing policy.

 

The industry is most interested in when and how the presidential election pledges, including specific implementation plans for the new drug R&D-linked preferential drug pricing policy and the integration and advancement of the post-marketing drug price management system, will be realized.

 

Multiple pharmaceutical companies believe that the public-private consultation body for the advancement of the drug price system, whose operation has been suspended around the presidential election, must be restarted as soon as possible in order to prompt practical discussions on the presidential campaign pledges.

 

On the 22nd, the pharmaceutical industry expressed expectations that the Lee Jae-Myung administration's inauguration would bring significant changes to the drug price system, which will directly impact the promotion of the pharmaceutical and bio industry.

 

The Ministry of Health and Welfare announced a health insurance operation plan during the previous administration on how it would establish various preferential pricing measures for drugs by domestic pharmaceutical companies.

 

The previous Yoon Suk-Yeol administration's blueprint for drug price regulations was to favor drug prices or to partially defer or exempt drug price reductions of pharmaceutical companies that contributed to improving public health, enhancing the sustainability of health insurance, and developing the national economy.

 

Additionally, the previous government promised to integrate the fragmented post-approval drug price management system into a single framework to address issues such as redundant price reductions that deter new drug development, thereby enhancing predictability for pharmaceutical companies and supporting their business operations.

 

However, multiple pharmaceutical companies have pointed out that there are few actual cases where the previous government's plans have been implemented in practice.

 

In other words, efforts to establish the criteria for preferential drug pricing that can promote new drug development, create jobs, and save national health insurance finances, have been stagnant for over a year.

 

According to industry sources, the only drug price policies that have actually been implemented are regulations that favor the prices of essential medicines manufactured with domestic ingredients and the temporary suspension of the price reduction system based on external reference pricing reevaluations that were about to be implemented.

 

Accordingly, the pharmaceutical industry is closely watching whether the new government will expedite the establishment of national economic development criteria that would allow pharmaceutical companies to receive preferential drug pricing.

 

  Given that President Lee Jae-Myung has pledged to implement a preferential policy linking new drug R&D ratios to drug prices, expand measures that take into account the pharmaceutical industry’s social contribution, and modernize the post-management of drug prices in an integrated manner, industry attention is now focused on when and how the Ministry of Health and Welfare and other relevant authorities will initiate specific reforms in the drug pricing system.

 

A representative from a mid-sized domestic pharmaceutical company explained, “The previous administration had repeatedly announced plans to introduce new preferential drug pricing clauses and the reform of the drug pricing system, but in reality, the progress felt slow.

 

Preferential treatment was mainly limited to essential medicines using domestic raw materials, and even then, the number of items actually benefiting from the policy was quite small.” The representative added, “While the implementation of the external reference pricing reevaluation results has been temporarily suspended due to ongoing concerns from pharmaceutical companies, significant concern remains on how it could be reinstated at any time.

 

The key issue is how much and in what direction the new government will diverge from the previous administration's drug price system policies.” Another domestic pharmaceutical company official noted, “The adoption of a drug pricing system that provides greater compensation to pharmaceutical companies that invest heavily in new drug R&D as a presidential election pledge holds significance.” “While policies that provide price advantages to pharmaceutical companies that increase investment in new drugs and make efforts to reduce national health insurance expenditures are important, reducing or eliminating unreasonable drug price reduction mechanisms could have a more substantial impact on pharmaceutical companies.” The official added, “A drug pricing system that adequately reflects the characteristics of the domestic pharmaceutical industry and advanced post-approval drug pricing management policies must be implemented by the new government to enhance pharmaceutical companies' capacity to invest in new drugs.

 

To establish systems that enhance the predictability of the pharmaceutical companies’ business operations, we hope that the new government will first establish a public-private consultation body.”