[Reporter's View] Besides speeding reform of pricing system

If the government's goal for reforming the drug pricing system is to improve structure of the pharmaceutical and biotech industry, then an appropriate processing speed is necessary.

To encourage pharmaceutical companies to expand R&D investment and align their interests, the government must provide sufficient time for companies to devise new plans.

The government will gather industry-wise opinions and finalize the pricing system reform by January. Then, it plans to implement the policy in July, half a year later. The schedule is too fast-paced, as concerns arise about potential exhaustion rather than improvements to the industry structure.
 
The Ministry of Health and Welfare (MOHW) has repeatedly stated that the system reform is not intended to achieve pharmaceutical cost savings. The MOHW asks that the reform, which has been designed to encourage innovations, should be viewed as an attempt to establish South Korea as a strong nation for new drugs.

The question is whether companies devising plans in a hurry following the Health Insurance Policy Review Committee's decision in February next year can bring innovation to the industry? Even if the rate of R&D investment can be increased, the policy is highly likely to be a half-baked deal to maximize drug pricing.

Furthermore, the greed to reach the goal in a short period may be the underlying reason that pharmaceutical companies with high potential for change give up.

The government has suggested direction of the drug pricing system. Now, it should give enough time for the industry to reorganize portfolio and devise 5- to 10-year plans. Six months is too short for the industry to finalize revision measures.

If the government were to ignore the industry's reality and focus solely on the roadmap for system implementation, there may be unintended consequences beyond the expected goals.

Besides the industry, the government must consider well-designed implementation measures to achieve both goals, including innovation and stable supply.

There are concerns about anticipated side effects of changes to the post-marketing management system, including the side effects of simply offering drug pricing priority based on R&D rate or actual transaction price survey.

Once the post-marketing monitoring system is reduced to twice a year, remaining tasks to specify include how to permit retroactive application or how to promote listing within 100 days for rare disease pharmaceuticals.

It is difficult to build a healthy ecosystem. It carries the danger of collapsing the existing ecosystem while failing to establish the intended ecosystem. Once collapsed, an ecosystem requires substantial financial resources.

Setting the right direction and improving the system requires the government's firm stance. However, as this is a critical decision impacting the industry and future business, the government should take the time to carefully review the policy, while the industry works to monitor and develop effective plans.