Stepped drug pricing applied on maximum price as of Aug 1

MOHW unveils detailed schedule and plan, drugs with premium benefit would take original pricing as a base price

Exempting drug priced lower than adjusted price of same substance maximum price

Reference drug only considered to have met individual bioequivalence test and clinical trial criteria

The Korean government unveiled the specified schedule and plan to apply stepped drug pricing system, also known as the upper limit price reevaluation on listed drug.

 

Although the Regulatory Reform Committee ordered Ministry of Food and Drug Safety (MFDS) to drop the ‘1+3 joint bioequivalence test system’ from the revised ‘Regulation on Pharmaceutical Approval, Notification and Review,’ the health authority’s intention to limit joint bioequivalence test and to promote drug master file (DMF) registration are still apparent in the newly revised policy.

 

Ministry of Health and Welfare (MOHW) officially disclosed the ‘Plan on Reevaluating Pharmaceutical Maximum Reimbursed Price,’ and spoke of the key dates such as a base date for reevaluated pricing and evidence submission period for the responsible pharmaceutical and bio companies.

 

◆Reevaluation subject and exemption conditions: Drugs listed for reimbursement before the government finalized the ‘Pharmaceutical Decision and Adjustment Criteria (MOHW notice No.

 

2020-51)’ as of Feb.

 

28 are subject to the reevaluation.

 

But some are exempted from the reevaluation; drug requested for decision by the President of Korea Orphan and Essential Drug Center (KOEDC), or oxygen, nitro oxide, basic parenteral nutrition, artificial perfusates and radiopharmaceuticals are ruled out from the reevaluation.

 

Other exempted drugs include low-cost drug, shortage prevention drug, orphan drug and other drugs specifically designated by the Minister of Health and Welfare, according to the Example 가 (Ga) to 라 (Ra) of the Item 2 of the Notice Appendix 4, that require stable supply and management essential for medical service.

 

Moreover, a first drug in the class to be listed is also excluded from the list of subject drugs.

 

If the first-in-class drug is not on the list of reimbursed drugs, the drug that MFDS notified as a reference drug for bioequivalence test among the same substance drugs would be considered as the first-in-class drug.

 

◆Adjusted drug pricing and criteria: The base price for the upper limit pricing adjustment (reduction) is the maximum price among the same substance drug.

 

However, drugs with premium pricing benefit would base their reevaluation on the original pricing without the premium.

 

As announced previously, the maximum price of a listed drug would be reduced by passing two, one or none of the criteria—submitting individual bioequivalence test data or clinical trial confirmation data, and submitting evidence of using active pharmaceutical ingredient registered with DMF.

 

A drug meeting two of the criteria would receive the maximum price lowered to the adjusted base price, and meeting one criterion would lower the price down to 85 percent of the base price.

 

And the maximum price of a drug clearing none of the criteria would be reduced to 72.25 percent of the adjusted base price.

 

MOHW does not plan to lower the maximum price of a drug with the price already lower than the adjusted base price.

 

And if the adjusted price is lower than the base price of a low-cost drug, the maximum price would be reduced down to the low-cost drug’s base price.

 

But the pricing would be adjusted as the original policy, if an item is listed with minimum unit (1 mL, 1 g, 1mCi etc.) or its maximum price is labeled with minimum unit.

 

The bioequivalence test reference drug, not a first-in-class drug, would be only considered to have met the first criterion of submitting the individual bioequivalence test evidence or submitting the evidence of clinical trial.

 

◆Evidence submission: For the pharmaceutical companies to get the most of the maximum pricing, the reevaluation criteria should be met.

 

The government has set the deadline on Feb.

 

28, 2023 for the evidential materials to be submitted to Health Insurance Review and Assessment Service (HIRA).

 

Other details would be fine-tuned further by discussing with Drug Reimbursement Evaluation Committee (DREC).