Rebate penalty in innovative pharma certification reform

The Ministry of Health and Welfare is addressing transitioning to a scoring system…set to legislate the regulation in January

Pharmaceutical companies argue, "Penalty for disqualification is unreasonable as it relates to past rebates"

The pharmaceutical industry's attention is drawn to the Ministry of Health and Welfare's (MOHW) proposed reform of the Innovative Pharmaceutical Company certification system.

The MOHW is considering a transition from the current 'cancellation of innovativeness certification' rule for illegal rebates to a points-based scoring system.

While the MOHW initially announced a shift toward a scoring system, which would give incentives towards new drug development from pharmaceutical companies rather than a penalty disqualifying the certification, it has faced significant pushback from those expressing concerns.

On January 2,​ the pharmaceutical industry is currently anticipating an administrative measure related to rebates concerning innovative pharmaceutical company certification system reform that can sufficiently encourage R&D investment.

Even if the current disqualification rules for illegal rebates are maintained without a transition to a scoring system, the industry's demand is for a reasonable reform that prevents certification cancellation for cases that occurred long ago.

The industry argues that for R&D plans to be maintained, regulations should be established to ensure that certification is not revoked for extremely old rebate cases or for instances where court rulings determined the company did not actively participate in the illegal activity.

The MOHW plans to issue a legislative and administrative notice within January after receiving feedback from both domestic and international pharmaceutical companies. 

The MOHW noted that the original schedule for the notice was delayed due to the process of gathering diverse opinions from stakeholders.

An official from a domestic pharmaceutical company explained, "The MOHW seems to be considering various administrative directions regarding the transition to a scoring system," and "It is crucial that the unreasonable cancellation rules be updated rather than a focus on transitioning to a score system. The goal of the certification is to provide preferential treatment to companies that are dedicated to new drug R&D."