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- 2025-12-20 04:07:28
- Opinion
- [Reporter’s View] LG Chem’s global two-track strategy
- by Oct 20, 2022 06:02am
- LG Chem announced the acquisition of a US biotech firm on the 18th. LG Chem will invest KRW 800 billion to acquire a 100% stake in AVEO Pharmaceuticals. This is the third-largest in the history of M&As made by domestic pharmaceutical companies. It is also the largest single-company investment along with SK's acquisition of Ampac. AVEO Pharmaceuticals is a 20-year-old biotech specializing in anticancer drugs. The company developed a vascular endothelial growth factor (VEGF) inhibitor and received FDA approval. Although its new drug, ‘Fotivda (tivozanib)’ is not a first-in-class drug, therefore not the first drug with that mechanism of action, it has much potential. Rather than directly attacking the tumor cells, VEGF inhibitors starve the tumor cells of the nutrition required for tumor cell growth by blocking the nutrition supply pathway. Due to this mechanism of action, it goes well with other anticancer drugs and also pairs well with the cancer immunotherapies that are expanding influence in the anticancer drug market. LG Chem has long been interested in advancing into the global market through new drug development. For this, the company established a local research center in the US 22 years ago, and also invested USD 5 million in a US bioventure for the development of an anticancer drug. Also, the company has spared no amount in R&D, with its company’s R&D-to-Total-revenue ratio reaching nearly 20%. The company was also the first Korean company to obtain approval for a new drug from the U.S. FDA. However, with new drug development being quite challenging in itself and management problems, LG Chem could not succeed in global expansions. LG Chem’s Life Sciences division was unable to continue the development of new drugs in the process of spin-offs, restructuring, and statutory mergers, and also lost a large number of professional personnel. Then, after absorbing LG Life Sciences in 2016, LG Chem restarted its attempt to advance into the global pharmaceutical market. The company secured cash cows – diabetes treatments, fillers, vaccines – to invest in new drug pipelines for autoimmune diseases, anticancer drugs, nonalcoholic steatohepatitis, etc. LG Chem owns 23 new drug and vaccine pipelines. Also, the company has recently started a global Phase III trial for a new gout drug candidate it has been developing. The trial is set to be conducted in the US, China, and Europe. In the field of oncology, the company opted to acquire a biotech. Of course, LG Chem already owns an in-house oncology drug pipeline that consists of 7 candidate substances. However, their development is not so easy as all are in the early stages of Phase I trials, and the company does not have much experience in developing anticancer drugs. Aside from the huge cost, even big pharmas with extensive commercialization experience, often discontinue the development of anticancer drugs midway. The acquisition of AVEO Pharmaceuticals will be an opportunity for LG Chem to understand all areas of anticancer drug development, approval, and sales. In addition to acquiring expert personnel that develops anticancer drugs, the company will be able to acquire the development know-how of big pharmas that have been conducting joint research with Aveo. Also, by transferring its own cancer pipeline to AVEO in the future, the company will be able to conduct global clinical trials more effectively. With the initiation of a global Phase III trial and the acquisition of AVEO this year, LG Chem made a big leap forward in advancing into the global market. Whether LG Chem's two-track strategy will bear fruit will remain to be seen.
- Opinion
- [Desktop] Increase accessibility by beating generic prices
- by Kim, Jung-Ju Oct 19, 2022 05:48am
- The direction of the government's guarantee policy has been consistent. It is to reduce finances by preventing inefficient operations and increase patient accessibility with sufficient funds. It's a kind of 'trade-off' way. At one time, there was a massive plan to strengthen the search for hospitals and pharmacies that illegally borrow licenses to prevent unfair claims and raise funds to improve coverage. However, hospitals and pharmacies do not easily lead to collection even if they are searched, so this does not have a significant impact on fiscal appropriation. Then how about the drug price? Generic has already been restricted to cascading hurdles, and the additional system maintenance and re-evaluation of registered drugs have been confirmed to enter the benefit. All drugs must cross the last hurdle of PVA, the concept of follow-up management. Even if you enter a low price in the first place, the price falls easily if selling a lot. Drugs that do not have competitive drugs with the same ingredients are included, and companies eventually decide to stop supply. The imbalance in the supply and demand of cold medicine applies PVA exceptions without worrying about fundamentally solving the problem. When planning such a generic regulation policy, the government explained that it was a strategy to strengthen accessibility by using it to register expensive new drugs by increasing trade-offs, that is, generic drug prices and follow-up hurdles. This price-pressure strategy, which comes out whenever the financial situation is shaken and the need to strengthen guarantees grows, is actually a relatively easy way to secure funds. There is definitely a limit to securing financial resources by cutting drug prices like this without managing prescriptions. We should not delay the diversification of resources to meet the growing need for guarantees, including expanding patients' options, resolving information refraction or asymmetry, activating alternatives and introducing prescriptions for ingredients, and improving consumer awareness.
- Opinion
- [Reporter’s View] The key to the ‘PE Exemption’ issue
- by Eo, Yun-Ho Oct 17, 2022 10:52pm
- The cries that the improvement reduces rather than expand benefits have reached the National Assembly. The government’s improvement plan for the special pharmacoeconomic evaluation (PE) exemption system was brought onto the chopping block at the NA audit. During the NA audit for the Health Insurance Review and Assessment Service that was held on the 13th, Rep. Sun-Woo Kang of the Democratic Party of Korea raised an issue on the PE exemption system improvement plan that had been submitted by the Ministry of Health and Welfare and HIRA. The “Measure to improve patient access and reinforce reimbursement management for high-priced severe disease treatments” that was recently presented by the government includes a measure to improve the PE exemption standards. According to Rep. Kang, unlike the authorities’ explanation, the drugs subject to PE Exemptions will be rather reduced if the improvement plan is applied. The “small number of eligible patients” which had previously been an “OR” clause for PE exemptions became a prerequisite in the proposed amendment, reducing the scope of eligible drugs. This issue has been raised continuously across the industry, including by the Korean Research-based Pharmaceutical Industry Association (KRPIA), since the government announced the amendment. In other words, the concern is that all drugs that wish to take the PE exemption track will have to have a “small number of eligible patients (less than 200 patients)” if the amendment is applied. On this, HIRA President Sun-Min Kim replied that “The 200 people limit is not absolute. All drugs that do not have enough patients to prepare evidence for PE evaluations are applied the PE evaluation exemption track.” In other words, the authorities will show some flexibility in the “small number” standard. However, the impact of this amendment is not only due to the changed premise. If the amendment is applied in the current state, all drugs that wish to take the PE exemption track have to have a small number of patients (as defined as 200 in the current criteria) and receive recognition from the committee for its difficulty in producing evidence to satisfy Article 2.c of the regulation. In other words, the companies will not be able to know if their drugs are eligible for the PE exemption track until HIRA’s Drug Reimbursement Review and Assessment Committee make a decision. This will inevitably have a significant impact on the predictability of reimbursement listings for companies that wish to use the PE exemption system. Considering how the new administration promised rapid listing of anticancer and rare disease drugs immediately upon its inauguration and the non-reimbursed blind spots still remain for drugs that are applied special exemptions, the government needs to seriously consider whether this amendment is achieving its original purpose.
- Opinion
- [Reporter’s View] Real crisis will come after COVID-19
- by Kim, Jin-Gu Oct 05, 2022 06:11am
- Contrary to the hopes that peace will come with the end of the COVID-19 crisis so near, another crisis of the ‘three highs’ - high exchange rates, high interest rates, and high inflation – has now arrived. Experts are predicting shock waves at the level of the 1997 IMF crisis and the 2009 global financial crisis or severer. Externally, the exchange rate, trade balance, and current account are shaking at the same time. Internally, red lights are flaring in Korea’s growth rate, price level, and interest rates. The future outlook is also bleak. Negative prospects are pouring in, that the low growth will continue for the time being, resulting in fewer jobs and a contraction in investment. Some analysts believe we have already entered stagflation, in which high inflation and economic downturn occur at the same time. Obviously, the domestic biopharmaceutical industry cannot be immune to this macroeconomic trend. The high exchange rates, high interest rates, and high inflation constrain the pharma and bio companies from all directions. Anxiety is growing bigger and bigger, and with the growing anxiety, companies contract. Given that the long-term investments made by the industry are just beginning to bear fruit, concerns are being voiced that the potential of the K-pharmaceutical and bio industry will be nipped in the bud, without blooming to its full potential. The Korean pharmaceutical and bio industry is considered to have made good progress during the past 3 years in the COVID-19 crisis. Some companies have used the crisis as an opportunity to grow significantly or to attract large-scale investments. It is not that the industry has fared well, but it is difficult to say that the COVID-19 crisis has been overcome solely by the capabilities owned by Korea’s pharmaceutical and bio industry. Pharmaceuticals are consumer staples, therefore, the industry was not greatly affected by the surge of confirmed COVID-19 cases or strengthened social distancing measures, etc. Also, much of the cash released through the quantitative easing measures competitively carried out by countries had flowed into the industry. In such a sense, it is true COVID-19 did not greatly impact the pharmaceutical industry as much as other industries. The government believes that COVID-19 will turn into an endemic by early next year. The pandemic is finally coming to an end. With the declaration of an endemic so near in sight, the pharmaceutical and bio companies are now on the testing bed. How well the companies have built their foundation will be tested in the era of the ‘three highs.’ Experts have contrasting views on how long the factors of concern represented by the ‘three highs’ will last. However still, one thing certain is that the companies must now brace for the long-term recession that is certain to come. Executives would need to make cool-headed judgments about the situation and set the right direction. The real crisis has only just begun.
- Opinion
- [Reporter's view] Reimbursement of Zerbaxa
- by Eo, Yun-Ho Oct 04, 2022 06:07am
- Super antibiotic Zerbaxa will receive insurance benefits from this month. It is the first time in about five years that a domestic permit has been granted. The government's response to the application of the PE system to some of the national essential drugs, especially in the face of the seriousness of antibiotic resistance issues internationally, has made new antibiotic drugs. Even though it is not a "life-threatening disease," the need for important drugs has been recognized. Zerbaxa was approved in Korea in April 2017, but the prevailing view was that it was difficult to register under the system at the time. This is because new antibiotic drugs are not easy to prove cost-effectiveness compared to existing conventional drugs, and it is difficult to prove clinical superiority due to the nature of the drug. In fact, an application for Zerbaxa was submitted in the second half of 2018 and went through the procedure, but failed to pass the HIRA Drug Benefit Evaluation Committee in 2019. Since then, the government has implemented an improvement plan to include essential drugs such as antibiotics in PE targets as a way to expand coverage. The government designated antibiotics as PE targets, limiting the scope of antibiotics to antibacterial agents such as Zerbaxa. The medical concept of antibiotics refers to antimicrobial medics, which encompasses antimicrobial agents (treatment of bacterial infections), antimicrobial agents (treatment of fungal infections), and antiviral drugs (treatment of viral infections). This continuous increase in antimicrobial resistance is considered the most important public health agenda worldwide. The WHO defines the concept of AMR as 'a threat to the effective prevention and treatment of continuously increasing infections caused by bacteria, parasites, viruses and fungi'. AMR is not limited to the well-known superbacterial outbreak problem. Antibiotic resistance, also called Superbugs, refers to changes that occur when microorganisms (such as fungi, viruses, parasites, etc.) that cause infection, including bacteria, are exposed to antibiotics, antifungal drugs, and antibacterial drugs. In fact, the real liberation of antibiotics has not been achieved. As the benefits of step by step one goes a long way. Zerbaxa began, the medical environment in Korea has improved little by step. With a round of applause, it adds to the remaining concerns.
- Opinion
- [Reporter's view]Bio-Administrative Orders of the USA
- by Kim, Jin-Gu Sep 23, 2022 05:51am
- Korea's CDMO (consignment development production) industry, which has just begun in earnest, has a hurdle. U.S. President Joe Biden recently signed an executive order for the "National Biotechnology and Bio Manufacturing Initiative," which calls for the production of biopharmaceuticals in the country. The Biden administration is emphasizing "Made in USA" every day ahead of the upcoming midterm elections in November. Along with the automobile and semiconductor industries, CDMO, one of the pillars of the pharmaceutical bio industry, has become a target. The decision is based on political intentions, but the intention is expected to have a significant impact on the domestic industry anyway. In the pharmaceutical bio industry, Samsung BioLogics is expected to be affected the most. Samsung BioLogics has been investing generously for the past 10 years. Since two to three years ago, orders for consignment production of biopharmaceuticals have been pouring in from around the world, including the United States. When the fourth plant is completed next year, it will become the world's top production base. However, if the administrative order is materialized, Samsung BioLogics' plan to occupy more than 30% of global biopharmaceutical CMO production is also expected to be disrupted. Just last year alone, about 20% of the company's sales came from the United States. It is not just a problem for Samsung BioLogics. After Samsung BioLogics presented a successful model, many pharmaceutical companies in Korea have entered the CDMO business. As an industry, not a company of Samsung BioLogics, the seed of CDMO was sown. However, the crisis has hit even before it is properly sprouted. The bigger problem is the possibility of U.S. protectionism spreading around the world. Protectionism is highly contagious. This means that if the U.S. takes action first, the world, including Europe, will likely jump into protecting its industries. Concerns are raised about the K-CDMO industry in that most companies that have entered the CDMO business are limited to Korea. The government seems to be aware of these concerns. The Ministry of Health and Welfare and the Ministry of Trade, Industry and Energy plan to hold a joint meeting of government ministries in the near future and come up with countermeasures related to the U.S. executive order. It plans to summarize South Korea's position here and deliver it to the U.S. during the South Korea-U.S. ministerial meeting this week. A single diplomatic negotiation cannot solve all the problems. With all possibilities in mind, other additional measures should be prepared. It is time for the government, which said it will focus on fostering the pharmaceutical bio industry, to show its true will with diplomatic power.
- Opinion
- [Reporter's view] Reform of the innovative system
- by Lee, Jeong-Hwan Sep 19, 2022 05:56am
- Will the "innovative pharmaceutical company certification system," which has been operating unchanged for 10 years since its introduction in 2012, be able to pave the way for reform through the disclosure of the reorganization plan? The Ministry of Health and Welfare announced plans to announce the reform of the innovative pharmaceutical company certification system at the end of the year. It is a relatively large reorganization plan, including subdivision of certification types and customized support measures, and attention is being paid to whether it can be a turning point to remove the stigma of the certification system that is low in effectiveness. Strengthening support for innovative pharmaceutical companies has been an agenda that has been needed for years. The pharmaceutical industry demanded that actual drug treatment or tax support for innovative pharmaceutical companies should be greater to encourage innovative pharmaceutical companies to develop new drugs and encourage non-selected companies to select new drugs, but the government has not been able to provide enough budget or come up with innovative drug measures due to trade friction. The Ministry of Health and Welfare continued to make efforts to improve the certification system for innovative pharmaceutical companies to resolve such criticism, and the reorganization plan, which will be unveiled at the end of the year, will be the first result to determine whether it will improve. First of all, the reorganization plan is expected to discriminate against the actual support method as the certification screening criteria for each size and type of pharmaceutical companies are different. As the customized support plan for innovative pharmaceutical companies has been discussed several times, such contents are expected to be included in the reorganization plan to be unveiled at the end of the year. More important than improving the framework and extension of the certification system is the government's reinforcement of support for innovative pharmaceutical companies, which is the purpose of operating the certification system. If designated as an innovative pharmaceutical company, the government should provide benefits such as preferential drug prices, tax support, and R&D support, but the pharmaceutical industry has long complained that it is difficult to expect sufficient benefits. Innovative pharmaceutical companies are given symbolic titles, but they do not have significant benefits that directly benefit from the development of new drugs. Among the companies selected by innovative pharmaceutical companies, there is also a pessimistic response that they will not be hit much even if the certification is canceled because they do not enjoy any practical benefits. The National Assembly also urges the government to strengthen support for innovative pharmaceutical companies every year. It is pointed out that the overall fostering of the domestic pharmaceutical industry can be achieved only when both the quantity and quality of support measures for innovative pharmaceutical companies are improved. The Ministry of Health and Welfare, which is set to unveil the certification system, also agreed with the criticism that the budget and policy support in line with the reorganization plan should follow, so we hope that the reform will be repeated starting with the reorganization plan.
- Opinion
- [Reporter’s View] Evrysdi awaits reimb review for over 1 yr
- by Eo, Yun-Ho Sep 16, 2022 05:53am
- One year has passed since the company applied for insurance reimbursement but to no avail. No progress has been made on the matter, not even the frequent news of the agenda being rejected by the Drug Reimbursement Evaluation Committee has been heard on the matter. Although the reimbursement application for the spinal muscular atrophy (SMA) treatment ‘Evrysdi (risdiplam)’ had been submitted in July last year after its approval in November 2020, the agenda has not been listed for deliberation on any of the lists disclosed by the Health Insurance Review and Assessment Service. There is a deadline for each stage of HIRA’s reimbursement assessment. The current overall reimbursement review period is 150 days, and the government had announced a systemic reform to reduce the period to 120 days. However, this period is often not kept. This is why the industry was not so enthusiastic about the reform plan. In the case of Evrysdi, its review period had already exceeded 150 days earlier this year, as the company had once failed to pass the Drug Reimbursement Standard Subcommittee and reapplied for reimbursement after supplementing data. On this, the Solidarity Against Disability Discrimination issued a statement last month when Zolgensma started being reimbursed, asking HIRA to abolish the reimbursement discontinuation standards set for another SMA treatment, ‘Spinraza (nusinersen),’ and the prompt reimbursement discussion to be made for Evrysdi. SADD had pointed out that SMA patients are being left unattended in the blind spot because HIRA is postponing discussions on Evrysdi just to discuss it in line with the adjustment made for Spinraza’s reimbursement criteria. So Evrysdi, which has applied for and is awaiting review, is still waiting in line after a year without even a single discussion made for its reimbursement and remains a ‘pie in the sky' for the patients. The importance of providing a clear explanation of an administrative decision is essential in the process of handling administrative affairs. This becomes all the more important when an exception arises in the application of a system, which raises more questions than an introduction or abolition of a system. However, the government has never provided an explanation on drugs that were extended their drug pricing negotiation period after passing the set deadlines. And more and more drugs receiving reviews for reimbursement listing or standard extensions or are being left without news. In the current “high-priced drug era,” plenty of very effective but expensive drugs are being introduced to the market. Therefore, it can be difficult for the government and the pharmaceutical company to reach an agreement within the set ’60-day’ period. In particular, the area of SMA treatments had been an ongoing issue due to their high price. However still, the emphasis needs to be laid on the word, deadline. Deadline is a promise. Also, the NHIS has described the negotiation deadline as a sort of "benefit" when announcing its plan to shorten the deadline for new drugs. In other words, the period is set for the final negotiation period to speed up listing and allow others to estimate the time to listing or rejection. Also, the people need to know why the negotiation fell through so that they could criticize the faulty party and find a compromise.
- Opinion
- [Reporter's view] PVA market should be actively reflected
- by Lee, Tak-Sun Sep 13, 2022 05:51am
- The pharmaceutical industry is in accordance with PVA didn't like being drug price cut. Excessive government intervention in the law according to the principle of supply and demand markets. Other goods has increased the use of demand than supply shortages, needs to be raised prices. But people pay health insurance run to fund health insurance system for the integrity of the principles that are not in arms. The COVID cold medicines such as drug case is a typical example of the increased trend in use. In an emergency due to infectious disease, without reflecting the system would drugs is lowered to in the pharmaceutical industry is concerned. But, but not the government through the correction amount of disadvantage companies contained in the target group cut drug price just worried. Sudden reflex to stop sales profit is a drug containing impurities need medication to take a closer look at the situation. The drugs increased by the use of existing drugs often cheaper than the sales suspension is true, but rather believed to have to reduce the drug price. Whenever these situations unfold, the pharmaceutical industry suggests the Ministry of Health and Welfare or the NHIS to exclude PVA. Each time, the government fully collects opinions from the pharmaceutical industry, but does not reflect all of the industry's claims by citing the purpose or principles of PVA. Some vendors in the end product price to appeal the cut is an injustice to happen happens. The NHIS is currently conducting research services for PVA improvement plans. That are currently fixed up to 10% will raise new standards will increase direct deposits. Most of them are intended to seek expansion and operation of the system for fiscal reduction. But the system of acceptability of the participants to build a broader view of the principles and detailed criteria with the situation and the environment should be reflected in the same time is also necessary. As such, detailed proposals such as national emergency situations caused by infectious diseases and increased use of drugs with reduced finances compared to alternative drugs should not be made to prevent unfair cases. If the system is operated as it is now, consumers will discuss the effectiveness of drug reduction, and on the contrary, suppliers will only highlight unreasonable aspects. We hope that PVA will come up with a more elaborately designed improvement plan.
- Opinion
- [Reporter’s View] Novartis's restructuring path similar
- by Eo, Yun-Ho Aug 31, 2022 05:40am
- Mergers, split-off, purchases, and sales... Global biopharmaceutical companies are busy making transformations to their respective businesses. Among the various transformations being made, the spin-offs and sales of the multinational pharmaceutical companies’ divisions have received particular attention over the past few years. Although such transformations are made under the premise of adopting a "selection and concentration" strategy, the spin-offs and sales draw out various positive and negative responses from society. One thing to note is that this phenomenon is being serially observed in various Novartis, one of the leading Big Pharmas, is currently integrating and spinning off its business at the same time. The company had integrated its Oncology and Pharmaceuticals business units that had been virtually operated like separate entities and announced its decision to separate its generics and biosimilars division, Sandoz. Although Novartis's spin-off of Sandoz was not unexpected, the integration of its other business units may have seemed less usual at first. However, the goal of the company - in conducting the spinoff and merger – has always remained the same. Like the other companies, Novartis is making corporate transformations to “separate innovation with legacy” in its business. Although being in the same company, Novartis’s Pharmaceuticals and Oncology Business Units had been on quite different paths. Its Pharmaceutical Unit focused on sales of relatively low-cost drugs for chronic diseases such as diabetes and respiratory diseases, whereas the Oncology Unit focused on premium-priced oncology drugs like Gleevec. However, at some point, the Pharmaceutical Unit started deviating from its usual path. Including ‘Zolgensma,’ high-priced premium drugs have now become flagship products in non-cancer areas as well. This is why the company decided to integrate the units into one combined unit - Innovative Medicines. Did the company’s separation from Sandoz also affect the company’s internal integration? Of course. With the integration, Novartis is also preparing to create a business unit dedicated to off-patent drugs. Corporate spin-offs cause separation in corporate size and profit structure. In other words, the company is seeking rebirth by dividing its business by concept, into an investment-oriented unit and a legacy unit. Such spin-offs do not impose a financial burden on companies because no claims for stock purchases are made in the process. Since it becomes a legally independent company after the split, the separate company may immediately be listed on the stock market upon spin-off. Most multinational companies conduct split-offs prior to such measures, which then would serve as a stepping stone for improving financial soundness and support sales of companies. For example, Pfizer established three business units (BUs), including its Upjohn Business Unit (BU) that was dedicated to its legacy brands, before initiating the separation of Viatris. Afterward, news of its merger with Mylan had been reported in line with the spin-off. In this sense, Novartis’s separation of Sandoz and integration of its business units are consistent with the steps that had been taken by other multinational companies in the past.
