Was AZ's plan to maintain Forxiga’s drug price all along?

Company withdraws litigation on Xigduo ...Xigduo’s price will be reduced from the 20th due to the lifting of the execution suspension order

Is the litigation withdrawal linked to the conclusion of Forxiga’s PVA negotiations?

With the market withdrawal for the diabetes drug ‘Forxiga Tab,' which retained its insurance price ceiling, already decided upon, AstraZeneca’s decision to withdraw its relevant lawsuit has been gaining much attention.

 

AstraZeneca had filed a lawsuit against the ex-officio reduction in the price of Forxiga and Xigduo that was imposed on May 1 last year upon the emergence of their generics.

 

The lawsuit enabled the company to retain Forxiga’s insurance price.

 

On the 17th, the Ministry of Health and Welfare announced that AstraZeneca had withdrawn its lawsuit filed to cancel the reduction in the insurance ceiling price of Forxiga and Xigduo, ending the lawsuit and lifting the suspension of execution previously made on the price cut for Xigduo.

 

As a result, the price of Xigduo XR 10/1000mg will be reduced from KRW 717 to KRW 512, and Xigduo XR 10/500mg will be reduced from KRW 717 to KRW 473.

 

Dapagliflozin is a diabetes combination drug that contains dapagliflozin and metformin.

 

The price of the single-agent dapagliflozin Forxiga Tab will not be reduced because Forxiga Tab has already been removed from the reimbursement list.

 

Fosiga was removed from the reimbursement list on June 1, following the withdrawal of its domestic marketing authorization on April 25.

 

With its removal, its final insurance ceiling price remains the same at KRW 734.

 

AstraZeneca has made tireless efforts to retain this KRW 734 price.

 

In April last year, when the Ministry of Health and Welfare announced an ex-officio adjustment to its price to KRW 514 due to the introduction of generics, AstraZeneca immediately filed a lawsuit to cancel and suspend the administrative disposition.

 

As the first trial dragged on, the suspension of execution remained in effect.

 

Eventually, the company was able to maintain its KRW 734 price until it was removed from the reimbursement list.

 

Industry officials believe that AstraZeneca defended the price cut in order to sell Forxiga at a higher price in other countries that reference Korea’s drug prices.

 

However, Forxiga almost underwent price cuts not just from ex-officio adjustments but due to post-marketing control measures - the Price-Volume Agreement negotiations.

 

The National Health Insurance Service and AstraZeneca had been in PVA negotiations before June when Forxiga was removed from the reimbursement list.

 

After the first round of negotiations broke down, the parties renegotiated until the end of May, when they decided to leave the price as is without changing the insurance ceiling price.

 

This has led to speculation in the industry that the Ministry of Health and Welfare and AstraZeneca had some sort of agreement within.

 

AstraZeneca would have had to make a counterpayment for the government to allow Forxiga to withdraw from the market at its original price.

 

The news of the litigation withdrawal came a month after Forxiga’s removal from the reimbursement list was finalized.

 

While the price cut of Xigduo was inevitable, AstraZeneca still chose to drop the lawsuit.

 

AstraZeneca could have delayed the price reduction of Xigduo by waiting for the outcome of the first lawsuit.

 

This has led some to speculate that AstraZeneca's withdrawal of the lawsuit was a trade-off for Forxiga’s PVA negotiations.

 

There are also rumors that the Ministry of Health and Welfare was very dissatisfied with AstraZeneca filing the lawsuit.

 

In any case, the withdrawal of the lawsuit reinforces the idea that AstraZeneca's original goal was to maintain the cap on Forxiga, not Xigduo.

 

Unlike Forxiga, Xigduo will continue to be sold in the domestic market.

 

In January, AstraZeneca Korea signed a co-marketing agreement with HK Inno.N for Xigduo.

 

However, some distribution industry insiders have speculated that the company may be abandoning Xigduo as well because of the lack of notification on returns and settlements following the price reduction.

 

However, it seems unlikely that the company would abruptly abandon Xigduo, given how Forxiga has been in the process of market withdrawal for half a year.

 

Last year, Xigduo generated KRW 47.2 billion in outpatient prescriptions, according to UBIST.