Industry fumes over government's drug price reeval plan

that compares foreign drug prices to enforce price cuts on Korea’s drug price

Plans to use average drug price of A8 countries, excluding the highest and lowest price, as comparator, which will raise drug price cut rate

Unfounded, unreasonable proposal..."The government is trying to use unreasonable standards”

The pharmaceutical industry continues to criticize the government's plan to reevaluate Korea’s drug prices based on foreign drug prices.

 

Not only is the industry unconvinced about the purpose of the reevaluation itself, but the industry believes that the government's proposal has been designed to disadvantage the pharmaceutical industry while disregarding existing evidence.

 

As a result, the industry is reluctant to accept the government's proposal this time as final.

 

However, what they worry is that the government will proceed with the reevaluations using the ‘A8 average price excluding the highest and lowest price’ standard nevertheless.

 

The government’s foreign drug price reevaluation plan seeks to adjust Korea’s insurance ceiling price of off-patent drugs by comparing it with the highest price of the same drug in A8 countries.

 

According to industry sources on the 29th, the government proposed the average price of the A8 countries (Japan, France, Germany, Italy, Switzerland, the United Kingdom, and Canada), excluding the highest and lowest prices, as the adjustment standard for the pricing reevaluations at the 8th meeting for the foreign drug price comparison reassessment that was held on the 26th.

 

This news has sparked outrage from many in the pharmaceutical industry.

 

The industry’s position is that the reevaluation using foreign drug prices is a redundant follow-up mechanism and that the government should conduct a research service or pilot project to evaluate its effect before commencing the project in earnest.

 

Some argue that if it is inevitable to implement the program, the adjustment standard should be set as the 'A8 adjusted average price.’ An industry official said, "The A8 adjusted average price is the most reasonable option, as it has been used as a standard in the comparative reevaluation using foreign drug prices in the past and is also being used for new drug listings.” The A8 adjusted average price had been 1 of the 4 options originally proposed by the government.

 

The industry has simulated the 4 adjustment standards proposed by the government and found that the 'A8 adjusted lowest price' will bring the most price reduction, followed by the 'A8 adjusted average price excluding the highest and lowest', then the 'A8 adjusted median price', and finally the 'A8 adjusted average price'.

 

In other words, the government's proposal is the second worst.

 

Another industry official said, "The impact of excluding the lowest price is minimal because there is not much price difference between the countries, but if the highest price is excluded, the price reduction rate will become immense." On the other hand, if the A8 adjusted average price is used as the standard, the price reduction effect is said to be slight.

 

In the industry, there is talk that the government clearly intends to reduce the price of off-patent drugs to save health insurance finances through the measure.

 

An industry official said, “Using the A8 adjusted average price that excludes the maximum and minimum prices has not been used for reevaluations or new drug registrations, and has an equity issue to continuously use the mechanism for the follow-up management of drug prices in the future.

 

The government seems to be trying to refer to that standard without reason, as the effect of drug price cuts is small with existing methods,” expressing discontent.

 

The government plans to hold additional meetings to gather industry opinions regarding its proposal.

 

However, there are those in the industry who believe that even if the government receives more opinions, it will be difficult to change the evaluation standard already set out by the government.

 

An official from a domestic pharmaceutical company said, "This is the first proposal presented by the government after 8 meetings, so it will be difficult to overturn it again.

 

However, industry opinions on subjects for exclusion, detailed criteria, and reduction rates may likely be reflected.” However, despite the government's proposal, it is still unclear whether the reevaluations will be conducted within the year.

 

As the supply and demand of drugs continue to be unstable after the COVID-19 pandemic, the government would be conscious of public opinion that the reevaluation should be postponed as a sharp reduction in drug prices could worsen the supply shortage.