Diverging views on pricing reform surface at New Year gathering

2026 Pharmaceutical New Year Reception was held with over 200 attendees from the government, the National Assembly, and the industry

KPBMA Chair Yunhong Noh, “Drug pricing reform must be redesigned”…KPA President Young-hee Kwon, “Concerns over on-site confusion”

Vice Minister Hyung-hoon Lee, “Will seek institutional reforms to foster an innovation-driven pharma ecosystem”

The 2026 Pharmaceutical New Year's Reception was held with the attendance of approximately 200 key figures from the government, National Assembly, and pharmaceutical industry. Amidst New Year's greetings and presentations of industry visions, differing perspectives on the government's ongoing drug pricing system reform were once again evident throughout the event.

The Korea Pharmaceutical and Bio-Pharma Manufacturers Association (KPBMA) and the Korean Pharmaceutical Association (KPA) expressed concerns about the potential industrial impact and on-site confusion resulting from the drug pricing system reform. In contrast, the government and ruling party reaffirmed the fundamental direction of the drug pricing system reform and stated their commitment to pushing forward its implementation.

In his welcome address, KPBMA Chair Yunhong Noh identified the drug pricing reform as a pending issue that may seriously affect the entire industry.

Noh stated, “The drug pricing system reform is an issue that could shake the very foundation of Korea's pharmaceutical and biotech industry. Rather than pushing ahead the government's set schedule, the reform must be redesigned through consultation with industry stakeholders to strike a balance between public health, industrial growth, and pharmaceutical expenditure.” His remarks were interpreted as a clear call for adjusting the pace of reform and supplementing or recalibrating the system.

The Korean Pharmaceutical Association also expressed concern over confusion in the field. Young-hee Kwon, President of the Korean Pharmaceutical Association, said, “Large-scale drug price cuts implemented earlier this year are expected to cause significant confusion across pharmacies. To reduce recurring confusion and improve policy effectiveness, the government must prepare clear institutional alternatives. Practical adjustments are necessary, such as addressing inventory claims and settlement issues.”

The Ministry of Health and Welfare explained the direction of the drug pricing system reform as ‘rewarding innovation and ensuring stable supply,’ and reaffirmed its commitment to continue the push.

Hyung-hoon Lee, Vice Minister of Health and Welfare, stated, “We will pursue improvements to the drug pricing system to sufficiently reward the value of innovation and ensure the stable supply of essential medicines. We will support the pharmaceutical and biotech industry’s evolution into a more innovation-oriented ecosystem.”

Meanwhile, Yu-kyoung Oh, Minister of Food and Drug Safety (MFDS), pledged regulatory support amid a changing regulatory environment. Oh said, “This year will mark the first year of a major transformation in pharmaceutical regulatory services. We will increase the speed and efficiency of reviews by expanding review personnel and introducing an AI-based review support system.”

Ruling party lawmakers largely defended the policy direction of drug pricing reform.

Yoon Kim, a lawmaker from the Democratic Party of Korea, emphasized, “Drug pricing reform should not be viewed simply as a policy aimed at cutting prices to reduce National Health Insurance spending. It is part of a broader effort to transform the pharmaceutical and biotech industry into an innovative ecosystem that has global competitiveness.”

Kim added, “Of course, I am fully aware that there are significant concerns raised in the field. However, if we share the common goal of elevating Korea's pharmaceutical industry to a global level, we can sufficiently discuss and adjust the pace and details of the system. At the National Assembly level, we will reflect the voices from the field and play our role to ensure that the drug price adjustment policy leads to industrial innovation.”

Rep. Young-seok Seo, also of the Democratic Party of Korea, remarked, “While various institutional challenges exist, the ultimate criterion for judgment is the public's right to health. We must find solutions within the broader framework of public health.”

Opposition lawmakers were generally more critical of both the current pricing system and the government’s reform direction.

Rep. Soo-jin Choi of the People Power Party, referring to the price-volume linkage system, pointed out, “The drugs that can be supplied to the public without burden are affordable generics. Setting generic drug prices below KRW 100 is effectively telling manufacturers not to produce them.”

Choi further emphasized, “Lowering the price of drugs that can be supplied more cheaply to the public simply because they are high-volume is an approach focused solely on numbers and the NHIS budget. If industry development is sacrificed solely for fiscal soundness, Korea’s pharmaceutical industry will ultimately lose competitiveness. Drug price reductions must be approached very cautiously and from a comprehensive perspective.”

Rep. Jia Han of the People Power Party also emphasized, “The system cannot outperform reality on the ground,” calling for system design that reflects industrial realities. Rep. Joo-yeon Lee of the Reform Party also expressed concern, stating, “Without concurrent regulatory improvements and creation of an investment-friendly environment, we risk falling behind in global competition.”

There was also discussion of international non-proprietary name (INN) prescribing and generic substitution. KPA President Kwon noted that an amendment to the Pharmaceutical Affairs Act, which simplifies post-notification requirements for substitution, has passed the National Assembly and is scheduled to take effect in February. It has been a long-standing aspiration since the introduction of the drug dispensing separation system.”

Kwon also cited specific figures regarding INN prescribing, stating, “According to research by the Korea Institute for Pharmaceutical Policy Affairs, INN prescribing could generate total savings of KRW 9 trillion, including drug costs and broader social costs.” She added that public consensus and media attention on INN prescribing are growing.

Rep. Young-seok Seo mentioned the legislative progress on generic substitution, noting that “some long-standing goals of public-sector pharmacists, including the generic substitution simplification law and pay raises, have been partially achieved.” However, regarding the broader system, Seo added that “many challenges still remain.”