Price negotiations begin for Padcev and Keytruda

MSD will also be negotiating for Keytruda’s gastric cancer reimbursement expansion during the meeting

Limitations of multi-indication drug pricing highlighted…Need for indication-based pricing gains attention

Astellas Korea’s Padcev (enfortumab vedotin) and MSD Korea’s Keytruda (pembrolizumab) have entered reimbursement price negotiations with the National Health Insurance Service (NHIS) for combination therapy in urothelial carcinoma.

At the same time, Keytruda is also under separate negotiations for reimbursement expansion in gastric cancer, placing MSD in a pricing defense dilemma.

According to industry sources on June 2, negotiations have begun for Padcev and Keytruda with the NHIS for urothelial carcinoma. In April, Padcev was recognized by the Drug Reimbursement Evaluation Committee (DREC) as being adequate as a first-line treatment for adult patients with locally advanced or metastatic urothelial carcinoma.

However, the requirement to negotiate jointly with MSD represented a significant hurdle. Unlike Padcev, Keytruda reportedly joined the negotiations only after considerable deliberation, even after receiving a favorable DREC recommendation.

The challenge stems from the fact that when a company participates in reimbursement negotiations for its drug in combination with a drug developed by another manufacturer, it may be forced to repeatedly defend a price that has already been reduced, or may soon be reduced, through prior reimbursement expansions.

In January, Keytruda accepted a price reduction following reimbursement expansions across 11 indications, including endometrial cancer, breast cancer, and biliary tract cancer.

Subsequently, the company has also pursued reimbursement expansion for Keytruda to dMMR/MSI-H metastatic gastric adenocarcinoma and gastroesophageal adenocarcinoma, following requests from the medical community. The indications passed DREC review in March and are currently under NHIS negotiation.

As a result, MSD faces the difficult task of negotiating both the Padcev-Keytruda combination therapy for urothelial carcinoma and reimbursement expansion for gastric cancer during the same period.

Industry observers view this as a clear example of the limitations inherent in negotiating reimbursement prices for multi-indication drugs, and stressed the need for an indication-based pricing system.

The government is currently reviewing the validity and effectiveness of indication-based pricing. The NHIS plans to complete a research project by the end of this year and may consider implementation if deemed necessary. Factors under review include pricing equity across different cancer types and the administrative burden associated with drug management.

Because indication-based pricing remains at the evaluation stage, the key question is whether a breakthrough can be achieved in these negotiations.

A Korea MSD official commented, “Although it was not intentional, we ended up conducting the two negotiations simultaneously. We believe this case highlights the need for institutional improvements, such as indication-based pricing. However, since the negotiations have only just begun, further discussion will be necessary.”