Expanded reimb for Keytruda·Dupixent

The Health Insurance Policy Review Committee decided on expanded scope of use for pharmaceuticals and reevaluation of reimbursement

Clinical laboratory testing fee per CDMO institution will be newly established…revision will be notified in the first half of next year

'Innovative Pilot Project for Community-based Primary Care' will be conducted for 3 years starting July 2026

As the review of expanded reimbursement for Keytruda (pembrolizumab) and Dupixent (dupilumab) has passed the Health Insurance Policy Review Committee (hereafter referred to as the committee) today (DEC 23), the out-of-pocket cost will drop by up to 95% starting next year.

The committee also finalized a restructuring of the compensation system for clinical laboratory testing CDMOs, the formulation of an adjustment system for relative value units, and the launch of an 'innovative pilot project for community-based primary care', set for the second half of next year.

The Ministry of Health and Welfare (MOHW) approved expanding health insurance coverage for Keytruda and Dupixent during the committee. While Keytruda was previously covered for four cancer types, including non-small cell lung cancer (NSCLC), coverage will now extend to 17 therapies across nine additional cancer types.

Specifically, the expanded coverage includes head and neck cancer, gastric cancer, esophageal cancer, endometrial cancer, small bowel cancer, biliary tract cancer, colorectal cancer, triple-negative breast cancer (TNBC), and cervical cancer.

For patients meeting the eligibility criteria for these expanded indications, the annual out-of-pocket cost per patient is expected to drop significantly, from approximately KRW 73.02 million to KRW 3.65 million (with a 5% co-payment for monotherapy).

Dupixent, which was previously covered for chronic severe atopic dermatitis, will also be covered for severe Type 2 inflammatory asthma starting in January. The annual cost for severe asthma patients is expected to decrease from KRW 15.88 million to approximately KRW 4.76 million (based on a 30% co-payment).

The committee also concluded this year's reimbursement re-evaluation for eight therapeutic ingredients. The reimbursement for spherical adsorptive carbon and artemisia herb extract will be maintained due to price reductions.

2025 Reevaluation Results for Pharmaceutical Reimbursement Appropriateness: Reimbursement maintained for 1. olopatadine hydrochloride 2. Clematidis Radix-Trichosanthes Root-Prunella Spike 3. Bepotastine…Drug price reduced and reimbursement maintained for 7. spherical adsorptive carbon and artemisia herb extract (upon voluntary requests for drug price reduction by pharmaceutical companies).

The oral formulation of L-aspartate-L-ornithine will remain covered, though its reimbursement criteria will be restricted to hepatic encephalopathy. For three other ingredients, including sulglicotide, the evaluation has been deferred on the condition that a portion of the reimbursement will be recouped if clinical trials fail to prove efficacy.

Abolition of clinical lab management fees... new institution-specific fees established

The compensation structure for CDMO clinical laboratory testing will be reformed. The consignment fee, which overlaps with existing testing fees, will be abolished, and new fees specific to the CDMO institutions will be established. Furthermore, the billing and payment system will be improved to prevent diagnostic fee discounting.

The CDMO fee criteria will be determined based on ▲the current management fee ▲the respective roles of the institutions ▲the financial impact during the regular RVU adjustment process. The KRW 240 billion saved from the abolition of the management fee will be reallocated to increase reimbursement for under-compensated areas, such as consultation fees.

Examples of Lab Fee Adjustments: Examples of over-compensated areas, and actual adjustments will depend on finalized cost data. Under-compensated areas within clinical lab testing will not face fee cuts but will be prioritized for balance adjustments.

The MOHW plans to revise relevant CDMO regulations in the first half of next year and implement the changes in alignment with the regular relative value unit adjustment cycle. Certification standards for clinical laboratory testing will also be updated.

Regular adjustment of the relative value unit (previously updated every 5-7 years)

To rationalize the fee compensation system, the government will formulate a regular adjustment model for the relative value unit. Previously, relative value unit restructuring occurred every 5 to 7 years, which critics argued failed to reflect rapid changes in medical practice.

The government will review under-compensated and over-compensated services based on medical cost analysis and adjust them to balanced fees.

In particular, funds from adjusting for over-compensation in areas such as clinical laboratory tests and imaging (CT and MRI) will be redistributed to under-compensated basic medical services, such as consultation and hospitalization fees at clinics and hospitals. Funds will also be directed toward strengthening compensation for essential healthcare, including surgeries and care that are severe·emergency and pediatrics·deliveries.

Medical cost analysis results for relative adjustment...Low margins for drug administration and dispensing

The committee discussed the 2023 medical cost analysis results calculated by the Medical Cost Analysis Committee. 

These results will serve as the foundation for the 2026 regular RVU adjustments.​ The '2023 Fiscal Year Cost Analysis Report', which for the first time includes cost-to-revenue ratios by healthcare institution type and specific fee items, is scheduled for publication in the first quarter of next year.

The analysis was expanded to include tertiary hospitals and clinics in addition to general hospitals. The report calculated the cost-to-revenue of reimbursements following the establishment of standardized medical cost calculation guidelines.

Key findings regarding the cost-to-revenue ratio for covered services (based on tertiary hospitals) showed that clinical laboratory fees (192%), special radiologic imaging fees (169%), and radiation therapy fees (274%) had relatively high profit margins compared to costs.

Conversely, drug administration and dispensing fees (11%), basic physical therapy (33%), and basic consultation fees (63%) generated significantly lower revenue than costs.

'Innovative Pilot Project for Community-based Primary Care' to launch in July

The pilot project will launch next year, initially targeting patients aged 50 and older who require integrated management, with plans for gradual expansion.

Under this project, registered patients can receive personalized preventive care, disease and medication management, and lifestyle coaching at their designated clinics, linked to their health check-up results. When necessary, patients can be referred to appropriate medical institutions or receive home-based primary care.

Clinics that complete the required training are eligible to participate. Institutions capable of providing multi-professional, multidisciplinary team support can join as hub institutions.

The government will introduce the 'Primary Care Functional Enhancement Integrated Fee', which compensates for 'patient registration and continuous management efforts' rather than traditional fee-for-service. The MOHW also plans to pilot multidisciplinary team-based service support and performance-based rewards.

The pilot program is scheduled to run for three years, from July 2025 to 2028, with plans to expand its scope to additional regions and institutions starting in 2029.