Weighted pricing benefit abused as permanent price booster

MOHW claims changes inevitable as pricing benefit purpose digressed

Individual review for drug unable to deliver stable supply

The government evaluated the current weighted drug pricing system has been digressed as a permanent pricing benefit.

 

Apparently, 96 percent of items have maintained the benefitted pricing for more than three years, and the authority sees that such practice has distanced itself from the initial objective to secure stable supply.

 

Ministry of Health and Welfare (MOHW) submitted a statement answering the National Assembly Health and Welfare Committee Audit addressing the issue.

 

Previously, Liberty Korea Party Lawmaker Kim Soon-Rye questioned the ministry about revising drug pricing system and strengthening competitiveness of Korean companies.

 

In summer, MOHW presented revised 'Decision-making and Modification Standard for Drug Item' and unveiled weighted pricing system revision plan as a part of generic pricing system revision.

 

The system was revised to set one year period of weighted pricing for synthetics and biopharmaceuticals, but provides maximum two years in case number of companies supplying the equivalent generics is less than three.

 

The revision also established generic drug pricing standard and pricing for multi and single-use eye drops.

 

On the revised weighted pricing system, MOHW explained “The initial objective of the system was to stabilize drug supply (weighted pricing for generics with less than three suppliers) and to induce soft landing for a generic entering the market where the original is lowering its price, from 100 percent to 70, and then to 50 percent.” “The revision was planned to keep the regulation faithful to its original objective maintaining stable drug distribution”, the ministry added.

 

And the government emphasized its justification of drug pricing system revision as “244 out of 254 items, or 95 percent of the benefited items have been maintaining its increased price for more than three years, abusing the system as a permanent price boosting tool”.

 

The ministry also ensured it would thoroughly review individual cases that need special support to stabilize drug supply.

 

The statement added MOHW’s commitment to contribute strengthening Korean pharmaceutical company’s global competitiveness by executing the Biohealth Industry Innovation Strategy and Pharmaceutical Industry Fostering and Support Master Plan.