Will the external reference pricing reevals be resumed?

Industry eyes whether the reevaluations will resume

Re-evaluation expected to resume after organizational restructuring, including appointment of the MOHW minister

Discussions on “post-approval linkage management” emerge... Industry opinions are likely to be accepted

Pharmaceutical industry “Large-scale damage is inevitable... Industry discussions are essential if re-evaluation resumes”

Tensions are rising in the pharmaceutical and biotech industry amid speculation that the external reference pricing reevaluations may be pushed forward again in the second half of this year.

 

The industry is reacting sensitively, as the proposal previously discussed by the consultative body could lead to large-scale drug price cuts if adopted as is.

 

External reference pricing reevaluation that was scheduled for this year...

 

specific promotion schedule unclear According to industry sources on the 3rd, there is a possibility that the external reference pricing reevaluations will be pushed forward again in the second half of this year.

 

Once the organizational restructuring is complete with the appointment of the Minister of Health and Welfare, it is expected that discussions on external reference pricing reevaluations will resume.

 

The Lee Jae-myung administration has nominated Jeong Eun-kyung (60), former head of the Korea Disease Control and Prevention Agency, as Minister of Health and Welfare.

 

With the appointments of the first and second vice ministers already finalized, the reorganization of the MOHW will be mostly complete once Jeong passes her confirmation hearing and is officially appointed as minister.

 

This has led to speculation that the MOHW will accelerate its efforts to revive policies that have been effectively put on hold since the state of emergency was declared at the end of last year.

 

Discussions on reevaluating foreign drug prices began in earnest at the end of 2023.

 

The government formed a task force (TF) with the participation of the pharmaceutical industry and held a total of 10 meetings until July last year.

 

The meetings discussed the foreign drug price reference standards, the targets for reevaluation, and the implementation date.

 

It was decided to lower domestic drug prices in line with the adjusted average prices of the 6 countries with the highest and lowest prices among the A8 countries (the US, Japan, Germany, the UK, France, Switzerland, and Italy).

 

The price cut will apply to 22,920 drugs listed on the drug reimbursement list, which will be divided into three categories and re-evaluated every three years.

 

However, there were still some areas where no consensus was reached.

 

These include the method of referencing Germany and Canada's drug prices.

 

Ultimately, the pharmaceutical industry proposed to the government that the drug price reference standards for Germany and Canada be changed and that the drug price reduction rate be reduced by 50%.

 

The government had originally planned to announce its final proposal by the end of last year and conduct the reevaluation in the first half of this year.

 

It then planned to begin full-scale drug price adjustments in the second half of this year.

 

However, all discussions were suspended after the state of emergency was declared at the end of last year.

 

This situation continued until recently due to the impeachment of the president and early presidential elections.

 

An industry official said, “As far as I know, there have been no official or unofficial discussions on the external reference pricing reevlautions since the last meeting last year.

 

A new Director of the Division of Health Insurance Benefits has been appointed, but the situation remains the same.” Various scenarios proposed, ranging from “including integrated post-marketing management measures” to “excluding Germany and Canada” The pharmaceutical industry appears to be feeling burdened by the mere fact that related discussions may be restarted.

 

An industry official said, “Although the continued uncertain state is unsettling, it is better than having a definite implementation schedule.

 

There is an underlying hope that the discussions stay suspended for a long time.” With the implementation schedule and details still unclear, various scenarios are being raised.

 

Some predict that the plan for the external reference pricing reevlautions will be included in the integrated post-marketing management plan and be renegotiated from scratch.

 

This prediction is gaining traction given that President Lee Jae-myung promised to integrate and advance Korea’s post-marketing management of drug prices.

 

In addition, there are predictions within and outside the MOHW that the government will partially accept the pharmaceutical industry's opposition.

 

The government is expected to partially accept the pharmaceutical industry's opposition to the German and Canadian drug price reference methods and either exclude those two countries or change the reference method.

 

On the other hand, there are also predictions that the government will push ahead with the reevaluation as originally planned.

 

In this case, significant opposition is expected as considerable damage to the pharmaceutical industry is anticipated.

 

A pharmaceutical industry official said, “Discussions on various pressing issues have been suspended.

 

At present, it is difficult to predict when and how they will resume.

 

However, it seems likely that discussions will resume in some form in the second half of this year.” The official added, “Among these, concerns about the resumed external reference pricing reevaluations are particularly high.

 

If the re-evaluation proceeds as previously discussed, the damage is expected to be very significant.

 

If the government decides to proceed with this, it must first once again engage in discussions with the pharmaceutical industry.”