NHIS "providing reliable and reasonably priced generics"

NHIS to require side agreement conditions for drug pricing negotiation from next year

TF formed under Health Benefit Strategy Office to change notification next year

Completed one-year-long research covering all-around lifecycle of drug product

Korea’s National Health Insurance Service (NHIS) has reported it would take over the generic management from next year.

 

The Price-volume Agreement (PVA) system currently limited to new drug only would be also applied on generic pricing negotiation.

 

The government agency plans to form a task force team to support Ministry of Health and Welfare (MOHW) making a related revision on the official notification.

 

NHIS is focusing on the additional conditions required by side agreements for the generic pricing negotiation.

 

The government body’s plan is to set a legal basis for imposing price reduction on rebate-providing drug as stated by the side agreement.

 

President Kim Yong Ik of NHIS spoke at the end-of-the-year press conference for government correspondents convened recently, and stated “NHIS would endeavor managing generics next year,” and accordingly “we have acquired insights on generic supply structure through the recently completed research on prospective improvement on pharmaceutical supply and purchasing system.” The research is also known as the ‘All-around Pharmaceutical Product Research,’ initially led by then Professor Lee Eui-kyung of Sungkyunkwan University School of Pharmacy since November last year.

 

The research was later passed on to her student Professor Lee Sangwon, as the former principal investigator was appointed as a new Minister of Food and Drug Safety, and it presented the final result of the research recently.

 

The one-year-long study comprehensively delved into pharmaceutical development, manufacturing, supplying, distribution and consumption with key research topics, such as the present pharmaceutical industry status and regulatory policy in Korea; analysis on generic supply structure and efficient pharmaceutical expense management; new drug supply analysis and recommendation on improving efficiency in pharmaceutical distribution industry; recommendation on advancing pharmaceutical distribution transaction system; prospective vision and tasks of pharmaceutical supply structure.

 

In particular, the research task of analyzing generic supply structure and improving efficiency in pharmaceutical expense management studied the present regulations and related improvements, and also analyzed generic manufacturing structure of Korean pharmaceutical companies.

 

President Kim said, “80 percent of listed drugs at the moment are generics, and most of the health conditions are treated with generics.

 

As we mentioned many times before, we, as an insurer, need inexpensive but good generics.” So far, the president has been emphasizing on amending the industry’s distribution structure for the ‘principle’ of providing the best drug with the lowest price.

 

“We need reliable generics with reasonable price.

 

But when it was announced NHIS would be managing the generics, the public thought we would recklessly lower the pricing.

 

However, we see that consistent investment is needed to purchase even better quality of generics with even lower price,” said President Kim.

 

In short, a ‘two-sided strategy’ is needed to purchase better priced but reliable generic with a consistent investment.

 

President Kim stated, “We would make various plans for next year to figure out how to provide better quality but better priced generics.” Regarding the side negotiation for the generic pricing negotiation, Health Benefit Strategy Office Park Jong Heon mentioned, “A task force team would be formed early next year to support the process of amending the official notification.

 

The amended negotiation procedure would not be in effect immediately from next year.

 

The goal is to have the notification revised within next year.”