Eligibility for adjustment applications improved

Criteria for filing adjustment applications was improved for drug subject to pricing calculations… Includes drugs subject to premium reevaluations

HIRA places agenda on DREC’s table for deliberation … if passed, changes will apply starting with cases filed in September

The criteria for adjustment applications that affect drugs subject to pricing calculations will be improved.

 

On the 2nd, the Health Insurance Review and Assessment Service (HIRA) will present the ‘proposal to improve the assessment criteria for drugs that apply for drug pricing adjustments’ as an agenda for deliberation for its Drug Reimbursement Evaluation Committee (DREC).

 

For drugs whose price changes after listing, a pharmaceutical company can request adjustments, upon which HIRA’s Drug Pricing Calculation Department adjusts the price.

 

However, the drugs that may request adjustments were limited to single-brand drugs that are medically essential and have no alternatives, etc.

 

An official from HIRA said, “Until now, not many adjustment applications were filed, so we applied the criteria to DREC’s deliberation for operation.

 

However, with the increase in applications for adjustments that will arise after the reassessment for premium-priced drugs are complete and the complaints from the industry, we presented the agenda on easing the criteria for adjustment applications for DREC’s deliberation.” Companies that have items subject to reassessments of premium pricing had written an agreement regarding their supply obligations etc.

 

after negotiations with HIRA.

 

Since the reassessments were announced, the companies have been ardently awaiting the day to apply for adjustments.

 

In the process, the pharmaceutical industry had requested the government to expand the scope of eligibility for adjustment applications to single brand drugs or drugs that occupy over 90% of its market, national essential medicines or rare diseases, and drugs that are cheaper than other drugs of the same class or cheaper than other countries.

 

A HIRA official said, “Not all the requests made by the pharmaceutical companies were reflected due to concerns over its fiscal impact or rise of other side effects, but we have sent the draft to a public-private consultative body and collected opinions.” If the measures to ease the adjustment criteria pass the DREC meeting, the authorities plan to apply the changes to applications for adjustments filed from September without collecting opinions from pharmaceutical companies.

 

The official added, “The adjustment criteria are currently operated based on an undisclosed internal guideline applied on DREC’s deliberation cases.

 

We plan to reorganize the existing standards to set as operation regulations, then disclose and revise them continuously.

 

Unlike new drugs that undergo the reimbursement listing application process, incrementally modified drugs (IMDs), combination drugs, and generics are listed for reimbursement in 45-75 days after receiving pricing according to a set calculation criteria (a fixed rate of the original’s price) and evaluation for appropriateness of reimbursement.

 

These drugs are subject to the drug premium system, which allows a drug to be sold with a premium at a specific rate for a specific period of time (unlike price increases) for the following purposes: to mitigate the shock of price cuts experienced by original products; to ensure a stable supply of generics (3 or fewer companies); to encourage the entry of generics while providing preferential treatment for technology development, among others.

 

However, the premium pricing criteria was adjusted last year, faced with criticism the system has fallen to become a system that prevents drug price reductions (for originals) and raises drug prices (for generics), as well as the existence of so many products that have maintained their premium long-term.

 

According to the adjusted criteria, the base premium period for all drugs regardless of whether it is a small molecule drug or a biologic is set at 1 year, with a 2-year extension approved for drugs produced with identical ingredients by 3 or fewer companies.

 

Accordingly, 416 generics that exceeded the premium pricing period by over 3 years had undergone price cuts starting September 1st.