Diverse response for premium pricing policy for IMD

Global companies, urgently needing original drug prices that reflect value rather than unconditionally protecting their industries.

Domestic companies, industries of IMD & generics differ so much that individualized policies are needed

The Ministry of Health and Welfare has virtually confirmed the premium pricing policy of excluding incrementally modified drugs(IMD) from generic drug price regulations, and since then, subtle airflow has been detected in the domestic and overseas pharmaceutical industry.

 

The expression of the reform of the Ministry of Health's Welfare on Drug Price Regulations is mixed between multinational companies with a large proportion of original new drugs and domestic companies centered on generic and incrementally modified drugs.

 

it tends to take domestic industry’s side.

 

According to the pharmaceutical industry on the 14th, the direction of the reform of the premium pricing policy for incrementally modified drugs by the Ministry of Health and Welfare was quickly delivered to domestic and foreign pharmaceutical companies RA (development and licensing) and MA (pharmaceutical and loan) agents.

 

As the scope of drug price regulation is reduced to generics, some domestic pharmaceutical companies that have been strategically focused on incrementally modified drugs become practical targets, and global companies with original drugs complain about unfair drug price management.

 

To review directly at the background of complaints, the Ministry of Health and Welfare does not maintain the premium pricing policy for incrementally modified drugs, but rather establishes a reasonable price-listing environment for original new drugs, which are heavily invested in cutting-edge technologies and clinical trials and are the source of development of new drugs.

 

The Ministry of Health and Welfare, which cut its original drug price as much as possible every time it is listed, is inconsistent with maintaining the premium pricing policy by overturning the regulation that the Ministry of Health and Welfare had noticed.

 

Indeed, some foreign companies dissatisfied with the domestic drug price listing process have decided to pass in other Asian countries so called, 'Korea Passing' such as China and Japan while skipping Korea.

 

In the end, Korea's drug price estimates are too low, which is the argument of foreign companies.

 

Only incrementally modified drugs with overwhelming domestic market share were decided as the preferential key, which led to the dissatisfaction of domestic drug price policies.

 

Indeed, in 2016, the Korea Multinational Pharmaceutical Industry Association (KRPIA), a group of international multinational pharmaceutical companies, criticized the government's plan to improve insurance prices for global innovative new drugs as a 'differentiated drug price premium pricing policy excluding multinational companies'.

 

At the time of controversy, the government took out the policy that domestically developed new drugs applied 100% innovative drug price premium policy while globally introduced new drugs did not apply regardless of innovation.

 

An official of Global A, who asked for anonymity, said, “The fair price policy for new drugs, generics, and incrementally modified drugs is a claim that foreign companies have consistently demanded.

 

The premium pricing policy for incrementally modified drugs is not wrong, but a corresponding original drug price policy should be prepared”.

 

A official said, “The need for drug price policy to protect its own industry is recognized, but Korea needs a new drug price policy that covers both its own and other countries to become a pharmaceutical power.

 

The original drug price policy needs to be improved to reflect this value”.

 

On the other hand, it is too much for the original company to try to involve the premium pricing policy for incrementally modified drugs, rather than generics.

 

Incrementally modified drugs, which have improved administration and dosage compared to the original by changing the route of administration, dosage form, and salt, and improved the convenience of patient medication, are marked by the progress and significant cost and effort for actual development.

 

Although it is not as difficult as a new clinical trial, the incrementally modified drugs that have advanced properties require animal studies and small-scale phase III clinical trials.

 

In their opinions, current pricing policy is reasonable.

 

The head of the development team of the domestic B pharmaceutical company said, “Honestly, simple salt-modified generics adopt the safety and efficacy data of the original new drug as it is, and there is no progress and it is easy to reproduce, and this is why generic drug price policy is not fair.

 

However, it is hard to accept the opposition to the premium pricing policy for incrementally modified drugs with sufficient progress compared to the original”.

 

The head of the development team of the domestic B pharmaceutical company said, “Korea's original drug price calculation standard is too low.

 

Some multinationals claim that the authority to control drug costs is the responsibility of the government, not the company, the characteristics are different and individualized policies are needed”.