[Desk’s View] Are Korean modified drugs really beneficial?

Generics with modified formulations are currently the hottest trend in product development among domestic pharmaceutical companies. In particular, products that convert tablets into orally disintegrating tablets (ODTs) to improve ease of administration are steadily emerging.

ODTs, which dissolve in the mouth, are undoubtedly convenient for elderly patients, children, and those with swallowing difficulties. For these patients, there is no reason not to welcome the product development efforts of domestic pharmaceutical companies.

However, whether it is really necessary for multiple companies to simultaneously develop orally disintegrating tablets containing the same active ingredient remains well in question, given the relatively small target patient population.

For example, in the case of pitavastatin ODTs used to treat hyperlipidemia, not only the originator but also numerous generic companies have entered development competition, even though the 2mg tablet market is already saturated with 42 products.

Behind the competition in ODT development lies pricing. In Korea, drug prices are calculated based on the criteria of identical active ingredients, identical dosage forms, and identical strengths. Under the stepwise pricing system, if there are more than 20 identical formulations meeting these conditions on the market, the price of the next product to be listed is set 15% lower than the previous lowest price.

Since there are already 42 pitavastatin 2mg tablets, prices are inevitably set lower than the current minimum of KRW 462. However, ODT formulations, being classified as different formulations, can receive the highest price of KRW 561 for that ingredient.

However, one must consider whether charging the highest price with a different formulation can truly satisfy a company’s profit needs when the patient population itself is small. Moreover, if multiple pharmaceutical companies compete, the market share will inevitably shrink.

Naturally, to meet their profit targets with orally disintegrating tablets, pharmaceutical companies will target general populations as well, not just those who have difficulty swallowing tablets. As a result, a significant number of general patients may end up being prescribed ODTs.

If a patient taking two or more medications has different dosage forms for each, this may increase inconvenience, as the patient must swallow one pill with water and dissolve another to take it, creating additional hassle.

This means that a drug designed for the convenience of a specific patient group may actually cause inconvenience for the general patient population. This is because the choice of medication rests solely with the medical staff.

The development of pharmaceuticals with improved convenience is on the rise. Although the market for combination drugs, which combine multiple medications into a single formulation, is already saturated, new combinations continue to emerge. Incrementally modified combination drugs are also granted pricing premiums. If ODTs prove commercially successful, development will likely evolve further.

Pharmacy shelves are already filled with such products, and pharmacists have identified Korean modified drugs as a growing inventory burden. Given that hundreds of millions of won have been invested in developing these drugs, this cannot help but be a waste of social resources.

While the emergence of more convenient medications is a positive development for patients, too many products are being released in Korea relative to the size of the market. In this highly competitive environment, it is unclear whether formulation changes and combination products truly contribute to the sustainability of the national health insurance system.

If drug pricing is driving this competition in product development, the government may need to reassess whether the current pricing system truly aligns with patient needs.