No companies have won suits on Gov's price cut dispositions

Litigation success rate of pharmaceutical companies on suits filed for price cuts of original drugs was 0%

NHIS emphasizes the need to urge and issue disposition for arrears to collect losses

NHIS delivers opinion on adjusting and accepting NA member Woni Kim’s representative bill on redeeming and refunding price cuts after review

The National Health Insurance Service said it needs to be granted the authority to urge or dispose of arrears in order to efficiently collect the losses that were caused by the non-price cuts that occurred during the stay of execution when preparing a bill to recover and refund the drug price cut amount.

 

The NHIS delivered its opinion on modifying and accepting the ‘Partial Amendment of the National Health Insurance Act (bill No.12727) that NA member Woni Kim presented as representative for the recovery and refund of drug price cuts after adding the request stated above.

 

The bill allows the NHIS to collect the loss incurred due to the drug price not being discounted during the suspended period if the company loses the original case after the suspension of execution is applied in the administrative suit.

 

On the other hand, if the pharmaceutical company wins the trial regarding the disposition of drug price reduction, the bill allows the pharmaceutical company to compensate for its loss.

 

According to the analysis data disclosed by NHIS on the status of drug price cut lawsuits filed by pharmaceutical companies, 40 out of the total 58 cases have been ruled upon in the first or subsequent trials since 2011.

 

Among these, pharmaceutical companies have partially won 17 cases (42.5%).

 

The NHIS said, “One thing to note is that there had been no cases in which the pharmaceutical company won the suits regarding price cut dispositions of original drugs.

 

The stay of execution has only become a means of delaying the price cuts by pharmaceutical companies.” Data on the suspension of execution of drug price cuts and the status its original lawsuits since 2018 showed that the court accepted the suspension of execution in 38 out of 39 administrative lawsuits.

 

The court’s acceptance rate of the stay in execution is 100% as the pharmaceutical company did not apply for suspension of execution for the 1 remaining case.

 

On the other hand, the government won 15 of the 20 cases (75%) that have been ruled upon in the first or subsequent trials after the suspension of execution was applied.

 

The NHIS explained, “Pharmaceutical companies have only won 25% of the suits filed regarding the price cut dispositions.

 

However, as the suspension of execution on the price cut dispositions is accepted 100%, this has been causing losses in NHI finances.

 

In this context, we fully agree with the purpose of the proposed bill.” The reimbursement expense is the actual transaction price of a drug that does not exceed the price cap (as notified by the MOHW).

 

However, in reality, drug transactions are being made at the set upper limit, so the decision to suspend execution of the disposition that lowers this upper limit allows the companies to maintain the previous drug price during the period set by the decision.

 

The NHIS said, “ It may seem excessive that the company needs to bear the loss when the court decides on the stay of execution.

 

However, on the other hand, the NHIS will also be allowing pharmaceutical companies to preserve their loss if the companies win.

 

In this sense, the bill is not disadvantageous to any parties and can be implemented." However, the NHIS added that the scope of the legal provisions, the location of the provisions, and the accepted provisions need to be more specifically stipulated.