Original-generic collusion prevention law introduced

“Drug price cuts and reimbursement suspension”

Rep Youngseok Seo proposes a revision to the National Health Insurance Act… “to eradicate unfair trade practices”

A bill has been proposed in the National Assembly to prevent collusion between original drug manufacturers and generic drug manufacturers from maintaining the domestic sales status of original drugs through illegal means.

 

On the 17th, Representative Young-Seok Seo (Gyeonggi Province, Bucheon City, National Assembly Health and Welfare Committee) proposed a partial amendment to the National Health Insurance Act to reduce the price ceiling set for medical expenses reimbursed for drugs related to collusion and unfair trade practices.

 

The current law stipulates that when a generic drug with the same ingredients is released, the price of the original drug that was first registered must be reduced.

 

As more generic drugs are released, the price of the original drug will fall further, which will reduce corporate sales but improve the financial health of the health insurance system and consumer welfare.

 

However, if the original drug manufacturer and generic drug manufacturers engage in unfair collusion or unfair trade practices to refrain from manufacturing or supplying generic drugs, the original drug can retain its status.  While the companies may continue to maintain sales based on the existing drug price, the health insurance budget deteriorates, and consumers lose the opportunity to benefit from lower drug prices.

 

In particular, even if unfair collusion activities or unfair trade practices that disrupt market order are detected and subject to government sanctions, the original drug's status is not revoked, allowing the continued acquisition of unfair sales and profits, which has also been pointed out as an issue.

 

Rep.

 

Young-Seok Seo has introduced a bill to address these issues by allowing the reduction or suspension of the drug price reimbursement granted for drugs related to unfair collusion actions or unfair trade practices.

 

The bill also includes provisions to prevent pharmaceutical companies not involved in problematic actions from suffering losses due to reductions in the original drug's insurance price ceiling when launching generic drugs.

 

Rep Seo emphasized, “The revised bill aims to prevent companies that violate market order in the pharmaceutical market, which is critical to public health and safety, from reaping unfair profits through distorted market structures.

 

We hope that the revised bill will reduce the practice of pharmaceutical companies disrupting market order, thereby worsening the health insurance budget and increasing the consumers’ burden of medication costs.”