45% rate to apply to generics listed from October

Previous rules apply to generics listed through Sept. 1

Delayed June applications may also be applied the new rate… price cuts for existing products expected from November

A 45% reimbursement rate will apply to generics newly added to the reimbursement list from October, creating a temporary price gap between newly listed generics and already listed products until price cuts for existing products take effect.

Price reductions for existing products are planned based on the September reimbursement list and could begin as early as November. This means that, at least for October, reimbursement rates for the same ingredient could differ by up to 8.5 percentage points between existing products and newly listed generics, ranging from 45% to 53.55%.

The revised reimbursement rate applies to drugs submitted for reimbursement from July. Earlier applications may also be subject to the new rate if their evaluation is delayed due to reassessment requests or requests for supplementary data.(AI-generated image)

According to relevant agencies and industry sources on Aug. 11, the 45% reimbursement rate will apply to drugs submitted in July as well as certain June applications whose evaluations have been delayed.

In general, generics are listed about three months after reimbursement applications are filed. Accordingly, drugs submitted in July are expected to go through deliberation by the Health Insurance Policy Deliberation Committee at the end of September and be listed on Oct. 1.

Although evaluation procedures are occasionally expedited because of drug supply concerns, no products submitted in July are expected to qualify for such accelerated review.

Drugs submitted in June and scheduled for listing on Sept. 1 may also be subject to the 45% rate if their evaluations are delayed due to reassessment requests or supplementary data submissions.

An industry official said, “Companies usually have to accept the outcome within about a week after being notified, but there are cases where an immediate launch is difficult or where acceptance is delayed because of lack of documentation. Companies can also request reassessment within 1 month if they believe the decision is incorrect.”

However, industry observers expect only a very small number of products will opt to have their listing dates pushed back because of evaluation delays, given the significant gap in reimbursement rates.

For already listed products, the first phase of price reductions this year is expected to lower the reimbursement rate to 49%. Following public notice and notification to pharmaceutical companies, the first round of reductions is scheduled between November and December.

Another industry official said, “A public notice has not been issued yet, so it is uncertain whether the reductions can actually begin in November. Each company must be informed of the price cut for each product, and the authorities also need to gather opinions, including requests for redeliberation, so the schedule could be delayed.”

Some expect pharmaceutical companies to intensify sales and marketing of existing products before the price reductions take effect. However, the scope for such activity may be limited because pharmacies and distributors are also seeking to minimize inventory losses and the burden of refunding the price differences.