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- 2026-04-29 06:35:05
- Opinion
- [Desk’s View] No external reference pricing next year?
- by Lee, Tak-Sun Dec 24, 2024 06:22am
- The plan to reevaluate drug prices based on foreign drug prices (external reference pricing), which was expected to be announced by the end of the year, has been delayed. The agenda did not make this year's list at the last Health Insurance Policy Review Committee meeting set for Friday (27th). It is unlikely that the plan will proceed as scheduled due to the impeachment of the president and the government's transition to an emergency system. This does not mean that the reevaluation plan for the next year has been completely scrapped. The government initially planned to announce the plan within the year with the goal to conduct the reevaluations next year and adjusting the drug price in the second half of the year. Due to the political situation, the announcement of the reevaluation plan has been delayed, but the goal of adjusting drug prices in the second half of next year may still be intact. The reevaluation plan could resurface at any time once the situation stabilizes. For the government, which prioritizes the stabilization of health insurance finances, reducing drug prices to save finances can be an attractive card. After freezing the health insurance premium 2 years in a row, the government is unlikely to expand government support in the face of a tight budget. Also, the authorities will not dare touch the rebellious physicians' service fees in the current state, so the easy way out would be to tighten the pharmaceutical companies' pockets. But the situation is not easy at all. Since the political turmoil following the imposition of martial law on December 3, economic growth forecasts for the next year have been lowered to 1%. Year-end specials have also disappeared, with group dinners being canceled one after another due to the unrest. Many have said that they cannot feel the Christmas spirit this year. Pharmaceutical companies are also worried about their livelihood next year. With the won-dollar exchange rate soaring to KRW 1,450, domestic pharmaceutical companies that rely on imports for raw materials are facing a heavy cost burden. Last year, the self-sufficiency rate of raw drug materials reached 75%. Under such circumstances, it is obvious that reducing the price of domestic chronic disease drugs with expired patents compared to foreign drug prices will further deteriorate the profitability of pharmaceutical companies. The industry expects losses worth tens of billions of won per company. While healthcare finances are important, we also need to look at the companies' pocket situation. Korean pharmaceutical companies have recently begun to show results in overseas markets based on their excellent human resources. The performance of pharmaceutical companies comes from research and development. However, if profits cannot support R&D, new drug development will have to be reduced. The government should not postpone the announcement of the external reference pricing reevaluation business plan, but at least declare that it will not be carried out within 2025 due to the recession and uncertainties. Delaying the announcement of the business plan will only increase the uncertainty of pharmaceutical companies' livelihoods next year. The government should urgently scrap next year's plan to conduct external reference pricing reevaluations, at least to revitalize the economy.
- Opinion
- [Reporter’s View] ERP hits industry again
- by Eo, Yun-Ho Dec 18, 2024 05:55am
- Another round of layoffs at multinational pharmaceutical companies are underway with the nearing end of the year. Starting in the second half of the year, 5 companies have already launched early retirement programs (ERPs). The reasons are varied. Whether it's their cash cow crisis, divestitures, or mergers and acquisitions, multinational pharmaceutical companies are taking a hard look at their situation and making layoffs where they deem necessary. This has become a common occurrence in the pharmaceutical industry. In fact, multinational pharmaceutical companies have made mergers and acquisitions (M&A) this year in a variety of rare disease areas, including autoimmune diseases, radiopharmaceuticals, cell therapies, and Alzheimer's disease treatments. They have focused on acquiring rare disease pipelines through small deals under $5 billion. Most of the spin-offs and divestitures of multinational pharmaceutical companies are driven by their “separation of innovation and legacy.” While the companies have undergone activities under the major premise of “choice and focus,” the spin-offs and divestitures have also brought a negative side effect - layoffs. Especially when it comes to layoffs as a result of divestitures, it's not your typical ERP. It's called voluntary retirement, but it's much less “resource-oriented." That's why the news of such an ERP process often leads to labor-management conflicts. The good news is that ERPs in multinational companies offer significant compensation. Especially ERPs that were initiated by spinoffs or selloffs often offer industry-leading compensation packages. For those who have been thinking about changing jobs, ERP can be a good thing. But not everyone wishes to change jobs. For some people, a company is more than just a place to make a living, it's a source of value and pride. When layoffs are unavoidable, companies should focus on maximizing compensation and succession. The coercion behind the word “voluntary” is something that needs to be addressed, and the size of the layoffs should not be vague. There are no good layoffs. Even if some people are happy, they are few and far between. Some people will feel a sense of loss and disconnection just knowing that they've been labeled as redundancies. As the company the employees relied on and were proud of, as an independent pharmaceutical company and not just a Korean subsidiary of a multinational pharmaceutical company, the companies should take the initiative to convince the headquarters if there is room for improvement and take an interest in the future of their employees.
- Opinion
- [Reporter's view] The National Assembly must restore
- by Lee, Jeong-Hwan Dec 17, 2024 05:51am
- On December 14, the National Assembly passed an impeachment motion against President Yoon Suk Yeol, causing the government to be partially paralyzed. The Ministry of Health and Welfare, the Special Presidential Committee on Healthcare Reform, and the National Bio Committee face significant disruptions in their ongoing policy initiatives. On Monday, December 16, following the weekend and holiday period after the impeachment decision, Minister of Health and Welfare Cho Kyoo-hong convened an emergency executive meeting at 9 a.m. Vice Minister Lee Ki-il, Second Vice Minister Park Minsoo, and department heads and directors of all key offices attended the meeting. Minister Cho Kyoo-hong directed the preparation of emergency medical response plans, respiratory disease management measures, and emergency healthcare services for the upcoming Korean New Year holiday. Cho also emphasized consistently and thoroughly implementing the recently announced regional·essential healthcare reinforcement strategies. Cho has been steadfastly emphasizing the MOHW's duties under Prime Minister Han Duck-soo, who is currently serving as acting president. Cho also faces unavoidable administrative disruptions. Minister Cho is himself under investigation as a suspect by the prosecution. The Special Presidential Committee on Healthcare Reform, led by Chairman Noh Yeon-hong, is facing increasing opposition from the medical community, creating uncertainty about its continued operation. Similarly, the National Bio Committee, where President Yoon Suk Yeol serves as chairman, is at risk of having its launch derailed. President Yoon Suk Yeol's duties were immediately suspended, and the Constitutional Court of Korea's impeachment trial was underway, resulting in political turmoil. The ruling People Power Party's leader, Han Dong-hoon, resigned voluntarily. In contrast, Lee Jae-myung, leader of the opposition Democratic Party, proposed the establishment of a National Stability Council for the ruling party. However, this suggestion has yet to gain traction. The impeachment vote has initiated the countdown for the Constitutional Court of Korea's ruling, with a final decision expected within 180 days and a new president to be elected within 60 days of the verdict. As the presidential office, government ministries, affiliated organizations, and the entire political landscape face chaos, the healthcare, pharmaceutical, and biotech industries are also encountering damages. The future of healthcare reforms, particularly those aimed at strengthening regional and essential medical services, is uncertain. The momentum for expanding medical school quotas has diminished. The pharmaceutical and biotech industries closely monitor the government's chaos, especially regarding how new regulatory·support policies, such as drug approvals·pricing, in 2025 will take shape. The remaining task is for the government and political parties to collaborate in restoring stability to the healthcare·biotech renewal policies, which have been left in chaos and now show the sings of ongoing conflict. Instead of focusing on battles between the opposing parties after the impeachment, the National Assembly must quickly secure a path forward for healthcare reforms critical to the nation's future. Furthermore, the National Assembly must identify and promote policies that support the pharmaceutical and biotech industries, providing the necessary legislative and government administrative support.
- Opinion
- [Reporter's view] What corporates expect from entering pharm
- by Dec 13, 2024 05:52am
- Denmark's Novo Nordisk, the maker of the obesity drug 'Wegovy,' became Europe's No.1 in market capitalization in September last year. It topped France's luxury goods group LVMH Moët Hennessy Louis Vuitton SE (LVMH). At that time, Novo Nordisk's market cap was approximately KRW 790 trillion, exceeding Denmark's gross domestic product (GDP) last year. In other words, 'a well-brought-up new drug' is feeding the country. Because the pharmaceutical industry is difficult to enter, it could be a source of stable economic growth. Based on 'The Fortune 500,' American business magazine Fortune's annual ranking of the world's 500 largest companies, a big difference exits between the top 20s in the 2000s and those in the 2020s. In contrast, there is no change between the top 20 ranking of the big pharma in the 2000s and 2020s. It means that well-established pharmaceutical business is likely to be a key business that could be a foundation of the country's economy. A government provides significant support for the country's future income source. However, government-led support is not enough for the pharmaceutical business. New drug development has uncertainty in nature. This area requires concentrated investment, but it is challenging for a government or a public authority to concentrate funds on a particular company. The pharmaceutical industry is different from the government's strategically supported electronics·heavy·chemistry·steel manufacture· ·auto industries. Therefore, it is good news that Korean conglomerates are entering the pharmaceutical industry. As HD Hyundai jumps into launching a new drug development business, eight out of 10 top Korean companies have entered the pharmaceutical business, excluding Hyundai Motor Company and Posco. In addition to early starters, Samsung, SK Corp, LG Corp, Lotte Corp, GS Corp, and CJ Corp have joined the industry lately. Besides these companies, Orion Corp and OCI Company have selected the pharmaceutical business as their new growth engines. Conglomerates have the advantage in running a pharmaceutical business in their cash power. Conglomerates can initiate a large-scale investment based on their proprietary cash source. A parent company with a stable financial structure can act as a supplier of liquidity to its subsidiary running a pharmaceutical business. For instance, Lotte Biologics procured KRW 900 billion at once through utilizing a debt guarantee from Lotte proprietor. Of course, success in the pharmaceutical industry cannot be achieved merely through funding. The numerous failures encountered by Korean conglomerates in the past support this claim. Hanwha Group and Amorepacific Corporation had jumped into the medicine business but withdrew from the market after failures. Lotte and CJ, who recently entered the biotech industry, have already experienced bitterness. However, a different approach can be observed by looking into the paths of conglomerates entering the pharmaceutical industry lately. In the past, conglomerates focusing on short-term accomplishments were pointed out as one of the reasons for their failure. Analysis suggests that the market entry strategy became more precise. For instance, HD Hyundai is reported to have prepared for a new drug business under the water after establishing AMC Bio three years ago. Group owners leading the pharmaceutical business are drawing attention. SK Corp, Lotte Corp, Orion, HD Hyundai, and GS Corp have positioned their owners who are undergoing owner business takeover to the pharmaceutical business. Given the high risk of the field and the difficulty in achieving short-term results, strong ownership is expected to influence ongoing investment in the business positively. It has been reported that South Korea will no longer depend on the semiconductor market. The pharmaceutical industry may be a new growth power to the country's growth. Besides being rationed for saving humankind, the pharmaceutical industry is practically a nationwide project that must succeed for the country's future. We wish the best for Korean conglomerates that have experienced multiple failures to achieve success shortly.
- Opinion
- [Reporter's View] Restricting vs expanding access
- by Eo, Yun-Ho Dec 05, 2024 05:53am
- The addition of a post-listing control system seems to be a fixed deal. The establishment of the Drug Performance Evaluation Office under the Health Insurance Review and Assessment Policy Research Institute has already taken place, and government officials have been publicly discussing using RWD (Real-world data) for drugs subject to the exemption from submission of pharmacoeconomic evaluation data. So the key to its implementation will be in the contents of the ‘dialogue.’ Will the system act as another mechanism to lower drug prices and cause much friction, or will it be a reasonable 'uncertainty resolution' device per government claims? Is the PE exemption system necessary? Its need is one question both the government and industry see eye to eye on. Only some academics and civil society organizations are opposed to its need in itself. In Korea's insurance policy environment, the pharmacoeconomic evaluation exemption system is the only way to ensure that the treatments needed by patients with rare diseases and rare cancers are listed for insurance reimbursement. Based on the evaluation results in major HTA countries (UK, Australia, Canada, Germany, and France) of the 37 drugs that have been approved through the PE exemption system, foreign countries either recognize single-arm clinical studies as indirect comparisons or regard the clinical needs of patients and healthcare providers, innovation, and urgency of treatment, to promptly approve drugs even if its cost-effectiveness is somewhat uncertain under the Korean criteria. If the uncertainty about the long-term effectiveness and cost-effectiveness of these new drugs had to be reviewed within the pharmacoeconomic evaluation system, they would have been reimbursed later than other countries or would have remained non-reimbursed. It is true that there is much to discuss, such as the methodology for implementing RWD and who should bear the expense. But as the agenda is already on the plate, it is clear that something has to be done. If so, to address the growing concerns over the rise in PE exemption drugs, a measure needs to be set in place to address the diminishing benefits. The time has come to revitalize the indirect comparisons that the industry has been advocating for so long, compensate for the lower prices of substitutes that have been lowered by years of post-listing control measures, and at least consider a flexible approach to the ICER thresholds. In the same context, the amendments to the ‘Detailed Evaluation Criteria for Drugs subject to Negotiations, including New Drugs,’ which was announced in August need to be finalized and implemented quickly to ensure the provision of benefits. Both sides, those who want to restrict and those who want to extend reimbursement, cannot be satisfied at once. The key is compromise. The fact that more taxes are spent on people with serious illnesses is no excuse to neglect them.
- Opinion
- [Reporter's View] what 'AI-driven drug discovery' requires
- by Kim, Jin-Gu Nov 26, 2024 05:54am
- This year’s Nobel Prize in Chemistry was jointly awarded to David Baker, a professor at the University of Washington, Demis Hassabis, CEO of Google DeepMind, and John Jumper, Director at DeepMind. Professor Baker was recognized for his contribution to creating protein design models. The DeepMind team was honored for developing 'AlphaFold,' which reduced the time required for protein structure prediction from years to mere hours using AI. The potential of AI in drug development has once again been recognized following the winning of the Nobel Prize. At the same time, it has alleviated concerns that AI-driven drug discovery is just chasing a mirage. In South Korea, various AI-driven drug discovery projects are being conducted. The chief project is the 'K-MELLODDY (Machine Learning Ledger Orchestration for Drug Discovery)' project. It is a Korean version of the MELLODDY project, in which 10 global pharmaceutical companies such as Amgen, key European universities, and biotech startups participated in 2020. The core of this project is federated learning. This method gathers data from individual pharmaceutical companies and research institutions to train AI models. To maintain data privacy, it encrypts gathered data. The goal is to shorten the lengthy drug development process significantly. In South Korea, eight pharmaceutical companies, including Daewoong Pharmaceutical·Dong Wha Pharm·Samjin Pharmaceutical·Yuhan Corporation·Jeil Pharmaceutical·Hanmi Pharmaceutical·Huons·JW Pharmaceutical, are participating. The project includes five universities and hospitals, such as Seoul National University Hospital, and four research institutes, including the Korea Research Institute of Bioscience and Biotechnology (KRIBB). AI drug development companies Simplex and Aifase are also part of the project. Experts in AI-driven drug development unanimously emphasize the importance of 'high-quality data' for AI training. A large volume of data is not sufficient. They explain that pharmaceutical companies or research institutions must utilize detailed clinical and preclinical data to accelerate drug discovery. The challenge lies in gathering clinical and preclinical data from individual pharmaceutical companies into one. These data are the intellectual property of each company and the culmination of extensive efforts by numerous research and development teams. While federated learning employs heavily encrypted processes to protect this data, companies remain hesitant and concerned about the potential external leakage of their core proprietary information. The same applies to clinical failure data. Experts stress that failure data is just as important as success data for AI training. Some explain that failure data is more effective in teaching AI systems. However, from the perspective of pharmaceutical companies, systematically recording and managing clinical failure data is a cumbersome task. The pharmaceutical companies participating in the K-MELLODDY project likely have overcome these concerns and challenges to unite around meeting the goal of AI-driven drug development. They deserve recognition. However, it is crucial to encourage more companies to participate. Only then can Korean pharmaceutical companies compete with global pharmaceutical companies that train AI systems on larger datasets worldwide. The government's involvement is crucial to encouraging more Korean companies to participate. The Ministry of Health and Welfare (MOHW) and the Ministry of Science and ICT (MSIT) have agreed to support KRW 34.8 billion in the K-MELLODDY project by 2028. Some argue that while the budget is significant, it may be insufficient to attract greater participation from pharmaceutical companies. In addition to establishing the federated learning platform, direct support for participating companies is essential. The current vision, which promises to reduce the considerable time and costs of drug development alone, is insufficient to give incentive. The government must take a more proactive role so that the goal of creating effective AI models for drug discovery can be closer.
- Opinion
- [Desk's View] Re-evaluation of eye drops
- by Lee, Tak-Sun Nov 22, 2024 05:55am
- The government has established reimbursement criteria for single-use ophthalmic solutions, including hyaluronic acid eye drops for conditions like dry eye syndrome. A year has passed after the primary result of the re-evaluation regarding the reimbursement appropriateness for hyaluronic acid eye drops were released in September 2023. When the primary result was released, no one anticipated establishing reimbursement criteria would take this long. The pharmaceutical companies had accepted the primary results without filing objections. At the time, the Drug Reimbursement Evaluation Committee (DREC), responsible for evaluating the reimbursement appropriateness, approved the appropriateness of reimbursement for hyaluronic acid eye drops in treating intrinsic conditions such as Sjögren's syndrome, keratoconjunctivitis sicca, and dry eye syndrome. However, DREC determined that there was no reimbursement appropriateness for extrinsic conditions, including post-surgical use, drug-induced dryness, trauma, or contact lens-related issues. Furthermore, the DREC stated that usage restrictions for intrinsic conditions should be included in the reimbursement criteria. Because prescriptions for intrinsic conditions account for 80% of the total, pharmaceutical companies accepted the results of the primary result. However, the situation quickly changed after the meeting details revealed a discussion to limit prescriptions to four boxes per year (each box containing 60 vials), which was considered a radical measure. During the National Assembly audit in October, concerns were raised about reduced patient access for seniors and potential price surges for non-reimbursed products. Faced with these issues, the government refrained from making a hasty decision. In December 2023, during the secondary review, it was decided that further review was necessary. The MOHW's Health Insurance Policy Review Committee also recommended establishing reimbursement criteria for hyaluronic acid eye drops and other single-use ophthalmic solutions to prevent a balloon effect. The review results were published in the administrative notice on drug reimbursement criteria on November 15. As per the Health Insurance Policy Review Committee's recommendations, to prevent a balloon effect where prescriptions shift from hyaluronic acid eye drops to six other single-use ophthalmic solutions, reimbursement will be limited to only one type of eye drop for keratoconjunctivitis sicca. However, the final proposal can be seen as a step back from the primary re-evaluation results from last year. In 2023, reimbursement for hyaluronic acid eye drops was excluded for extrinsic conditions. In contrast, the final draft now allows reimbursement for cases diagnosed as persistent intrinsic corneal and conjunctival epithelia following extrinsic conditions, effectively expanding the scope of use compared to the first re-evaluation result. The usage limit for hyaluronic acid eye drops has been set at a maximum of six vials per day, typically three boxes (60 vials per box) for 30 days. It is a much more lenient policy than the primary draft of a four-box annual limit. Given the social controversy surrounding this issue, it is presumed that the final decision was made with exceptional caution. The final draft likely has been designed to minimize backlash by considering patient access, the perspectives of prescribing healthcare professionals, and other relevant factors. However, it seems inevitable that the scientific standards for evaluation, such as clinical utility and cost-effectiveness, were somewhat relaxed during the process. Comparing last year's primary results from the DREC with the final proposal, it is likely that many would feel this way. We respect the final draft because social demands are also significant. Even so, was it necessary for the re-evaluation to take a year? By the time the 2024 reimbursement appropriateness re-evaluation was completed and the National Assembly audit concluded, the issue had almost faded from memory. Releasing the final draft at this point is close to dereliction of duty. If the final draft had any potential cost-saving effects, it is fair to say that a year of savings was lost due to the delayed conclusion. Furthermore, analysis suggests that the delayed decision likely resulted in considerable damages, including uncertainties and chaos in the practices. The government must elaborate on the analysis of re-evaluation results of single-use eye drops and the background of taking an entire year.
- Opinion
- [Contribution] On MFDS’s new drug approval fee hike
- by Whang, byung-woo Nov 21, 2024 05:46am
- Kyung-won Seo, Chair Professor, Department of Food& Medical products Regulatory Policy, Dongguk University The Ministry of Food and Drug Safety recently announced a significant rise in its new drug approval fee to KRW 410 million. In Korea, the new drug approval fee had remained very low at KRW 8.83 million for decades, compared to the US FDA's KRW 5.3 billion, the European EMA's KRW 490 million, and the Japanese PMDA's KRW 430 million. The fee hike had been long desired by the industry and the MFDS alike, and the MFDS had worked hard to raise the fee. So the significant increase in the new drug review fee means that the value of the new drug review work being carried out by the authorities has been properly recognized, which the MFDS and the MFDS members in charge of new drug approvals should be proud of. Congratulations and a big round of applause to MFDS for their hard work and this long-awaited achievement. Since a new drug is a substance that has never been administered to humans before, the development company must conduct extensive experiments to confirm the quality, safety, and effectiveness of the new drug, and regulatory authorities must evaluate the adequacy of its process and results. The process of reviewing new drug data requires a large number of experts from regulatory agencies and takes more than a year, so the labor cost of this process is reflected in the new drug review fee, which renders the fee high. The industry has been receiving the news with mixed emotions – welcoming the long-awaited increase of the new drug review fee but then panicking at the unexpectedly large increase. As the industry will be paying a significant amount - KRW 410 million – it will expect high-quality regulatory services. The MFDS’s announcement of the 'Innovative Plan for New Drug Approval' along with the administrative notice of the 'Fee Regulations for Drug Approvals, etc.' is an expression of its strong will to provide high-quality regulatory services that can meet industry expectations. Until now, the biggest complaint of the industry has been the unpredictable review period/approval date of new drugs. A particularly notable part of the MFDS’s innovation plan is that it will shorten the review period from an average of 420 business days to 295 calendar days. Unlike other countries, the MFDS’s review period is calculated in working days and does not include the time spent by the company preparing the data, so the total review period was delayed by 420 days on average, even if the statutory deadline was not met. If the review period for new drugs is shortened to 295 calendar days, the Korean public will benefit by using innovative new drugs with verified efficacy and safety sooner, and the industry will receive the greatest gift of all: predictability in their approval. In order for the MFDS to meet the actual 295-day timeframe, it will need to recruit a large number of highly qualified reviewers with expertise, conduct a thorough prior review to ensure that supplemental requirements that require significant time to prepare do not arise during the review process and harmonize review regulations internationally to ensure that no data or tests are required only by MFDS. As most of the delays had occurred due to requests for supplementary data that require a significant amount of time to prepare, to prevent this from happening, a thorough preliminary review should be conducted and a system put in place to prevent the application from being accepted if it lacks required data. Once the application has passed the preliminary review, the 295-day review period promised by the MFDS must be met. Looking more closely at the reasons for the delays in the review period for new drugs, it can be assumed that there are still test items and data that only MFDS requires, and the preparation of these materials by supplementation was a factor in the delay. Since Korea became a member of the ICH, most of the guidelines have been internationally standardized, but there are still items that need to be improved, and this fee hike is the opportunity to harmonize the details of the review regulations internationally. With the development of the pharmaceutical industry and the advancement of new drug evaluations, the number and volume of review materials have increased dramatically, and the depth and complexity of the contents have reached a level that is incomparable to the past. So the reviewers of regulatory agencies who have to evaluate these materials are required to have the highest level of professional capabilities. Although the MFDS has been making great efforts to secure these talents, it has not been able to secure competent reviewers at the level of advanced regulatory organizations due to various constraints. Now that the new drug review fee has been raised to the level of advanced regulatory organizations, everyone is expecting that the MFDS will attract a large number of reviewers who own the best expertise. The increase in new drug reviews is expected to open a new era where various review innovations begin to be introduced. For the new system to take off and succeed, the MFDS, industry, and academia must continue to communicate, coordinate, and improve the system through open discussion. The MFDS has been working with many partners, including the industry, to become an advanced regulatory organization. I expect that the MFDS will continue to move forward step by step with its long-standing partners to become the world's leading regulatory agency, and I extend my warmest support to the MFDS as one of its former members and now one of its most enthusiastic supporters.
- Opinion
- [Reporter’s View] Who’s to blame the new drug reimb delays
- by Eo, Yun-Ho Nov 15, 2024 05:49am
- Expedited approval of new drugs is one of the oldest issues in the pharmaceutical industry. Shortening the insurance reimbursement review period for drugs has been discussed almost every year, and in fact, the regulatory deadline is getting shorter and shorter. This is true for both the evaluation and negotiation stages of the Health Insurance Review and Assessment Service and the National Health Insurance Service. However, it is also true that the deadline is only a deadline set for the pharmaceutical company to apply and the authorities review the application, so it is not proving to be effective in expediting the reimbursement of new drugs. The responsibility lies on both sides. First of all, many pharmaceutical companies spend a considerable amount of time between the post-approval feedback process with their respective headquarters before actually applying for reimbursement - in other words, taking their time weighing up the gains and losses. During this process, the companies may delay the timing of reimbursement to receive a higher price or give up some indications due to competition from other products. Some companies deliberately delay drug price negotiations in anticipation of being included in the government's new coverage plan, while others cancel the introduction of a drug altogether because they believe it is not marketable in Korea. The “Korea-passing” decision, where the companies forego Korea and introduce the drug to other countries first, has become commonplace. In fact, at a recent press conference, HIRA said, “Regarding the time it takes to reimburse a new drug, although the evaluation is carried out within the statutory deadline, there is a difference in the actual time taken to the listing because the companies take a considerable amount of time to supplement their data, etc. In order to quickly register a new drug, the companies must first faithfully complete documents when applying for a decision.” However, the government's “let's complete discussions in the earlier stages and send the agenda to the Drug Reimbursement Committee” decision also plays a role. If you trace back the process of listing a drug that is long overdue for listing, there are certainly cases where the companies had voluntarily withdrawn their application after the Drug Reimbursement Standard Subcommittee decided to delay the review. However, there are many cases where such withdrawal is not “voluntary.” The deferral decision is very common during drug pricing negotiations between the NHIS and pharmaceutical companies. However, we need to remember that the 60-day deadline set for negotiations is a promise, and a deadline is a deadline. Also, the NHIS has referred to the negotiation deadline as a sort of "benefit" when announcing its plan to shorten the deadline for new drugs. The problem is that there is no transparency in the progress made in those 60 days. Nothing is disclosed on what happened to the drugs that exceeded the listing review deadlines. As a result, only the patients are left to suffer in endless await. No answer nor explanation on the direction of progress is provided to those who wait in dire need. This new year, all the stakeholders involved should make collaborative efforts to reduce the period to actual reimbursement listing.
- Opinion
- [Reporter's View] The reality of drug shortage reports
- by Lee, Hye-Kyung Nov 14, 2024 05:52am
- Reports of shortages of oxytocin, an injectable drug used primarily as a labor inducer, have caused confusion in the obstetrics and gynecology field. Most obstetrics and gynecology centers that have a large number of expectant mother visits stock enough oxytocin to last 2-3 weeks, but JW Pharmaceuticals, which holds more than 70% of the prescription market, has announced a shortage of its oxytocin supply that will last until January next year. In the case of childbirth, there is no reason for a sudden surge in a drug’s demand like infectious diseases or colds, but oxytocin is designated as a national essential medicine that must ensure a stable supply as it is used to induce labor in mothers. In Korea, only two companies, JW Pharmaceutical and Yuhan Corp, manufacture oxytocin drugs. Since it is a national essential medicine with a small number of manufacturers, it seemed natural that supply and demand management would be in place, but out of the blue, the clinics and hospitals were suddenly just told that “there was no medicine.” A small hospital in a rural area with a low birth rate would have ordered the medicine on a case-by-case basis rather than keep two to three weeks' worth on hand, so the news that it would soon be out of stock must have been like a bolt from the blue. The question that first came to mind was, why is there a national essential medicine system in place if it cannot manage the supply of essential drugs? When looking closer into the situation, the cause was clear: the system was not well established enough to ensure a stable supply of the necessary drugs. The discontinuation of the manufacture, import, and supply of finished drugs must be reported to the Ministry of Food and Drug Safety 60 days before the discontinuation date. However, as the criteria for reporting shortages are set differently in each company's SOP, and there is no absolute threshold set for determining drug shortages. In the case of oxytocin, the MFDS was able to identify the shortage only after looking into Yuhan Corp’s shortage report, a company that only accounts for about 30% of the oxytocin market share. On October 28, the company reported a shortage of oxytocin on the market, stating, “There is also supply disruption for Choongwae Oxytocin Inj.. which is approved with the same ingredient. With no substitute drug available containing the same ingredient, a supply shortage is expected for a period of time, but we will be able to ensure supply from November 14, 2024.” Up until this point, JW Pharmaceutical had not notified the MFDS of its shortage. The problem was that the MFDS was not informed, but the letter sent to obstetrics and gynecology clinics and wholesalers indicated that the drug would be “out of stock until January.” Even if the drug is designated as a national essential medicine, the KFDA cannot know about the shortage without a report from the pharmaceutical company. The MFDS began to investigate the situation when it learned about JW Pharmaceutical’s oxytocin shortage via Yuhan Corp’s supply shortage report. JW Pharmaceutical, which has a higher market share, was unable to manufacture finished drugs due to issues with the API, and the MFDS reportedly supported the necessary measures and moved up the manufacturing date from January next year to December this year. This situation seems to have occurred because the threshold for shortages was not specified. Each company had a different threshold set for sending “out of stock” reports to the MFDS. Yuhan Corp reported a shortage when it crossed its threshold of shipments this year, while JW Pharmaceuticals did not report a shortage until it was likely to run out on site. It's not easy for the MFDS to keep track of the shortages of more than 500 national essential medicines every day. Unless the ministry receives a proper report, they cannot provide the necessary support, but if the product becomes out of stock even before the ministry can consider support, there is no opportunity for the authorities to take action. As a result, no medicine is available on site, with the government ending up taking countermeasures after the damage is made. Last year, the Ministry of Food and Drug Safety revised the Ordinance of the Prime Minister to pull forward the drug shortage report from 60 days to 180 days, with implementation scheduled for April next year. However, if the regulation is revised without a baseline for reporting not established, cases like oxytocin will only repeat itself. We need a system to address stockouts before there is “no medicine” on site.
