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- 2025-12-26 13:07:29
- Policy
- IMD pricing reduction dispute to continue on
- by Lee, Jeong-Hwan Dec 30, 2019 09:48pm
- Pharmaceutical industry and lawmakers are reprehending the government for not laying down any specific plan, despite their demand for the government to abolish or revise the pricing reduction policy on new incrementally modified drugs (IMDs). The criticism is on the lack of any follow-up action from the government, although Minister of Health and Welfare Park Neung-hoo at the National Assembly annual audit session agreed with the lawmaker’s concern about reducing incrementally modified drug pricing and stated he would revisit the matter. According to the industry sources and a few of lawmakers of the National Assembly Health and Welfare Committee on Dec 29, Ministry of Health and Welfare (MOHW) has not disclosed a detailed policy revision plan as demanded. The industry and the lawmakers claim IMD is a uniquely competitive cash cow and stepping stone for the emerging Korean bio and pharmaceutical industry that would leverage Korea to become a new global pharmaceutical powerhouse. Ultimately, abolishing pricing benefit for IMD would impair pharmaceutical industry’s advancement and their commitment to develop new drug. Such point was clearly made when the Health and Welfare Committee-affiliated Democratic Party lawmakers, Nam In-soon and Oh Jae-sae, questioned Minister Park directly at the National Assembly audit session. The issue fired up the lawmakers and the industry when MOHW issued a notice on the generic pricing regulation revision, which would apply the same early pricing reduction regulation as generic on the IMD to reduce the pricing after maximum three years a same class generic is launched. Although the generic pricing reduction may be inevitable, the industry insists pricing benefit on IMD should be maintained as it is associated as a drug with innovativeness-recognized data. A Health and Welfare Committee lawmaker’s office official pointed out, “The National Assembly audit has raised the same issues on the IMD pricing reduction policy numerous times, and the minister has said he would look into the matter. But the ministry has now followed up with any plan for months now.” “The Special Act on Fostering and Support of Pharmaceutical Industry that passed the National Assembly plenary session clearly provides pricing benefit on IMD. Basically, the government is removing regulations the lawmakers have regulated. Recklessly lowering drug pricing would eventually harm the quality of drug product directly affecting the people’s health. We suspect the recent valsartan contamination issue broke out, partially because the companies were pushed to use competitively low-priced active ingredients due to the past drug pricing reduction,” the official elaborated. A director of drug development department at a medium-sized pharmaceutical company urged, “Fundamentally, we understand the government’s intent and logic behind the pricing reduction. They are trying to reform the Korean pharmaceutical industry’s present business model centering generic. Although we agree with the intent, their actions are too fast and too unrefined. Their message would come across fine regulating only against generics while maintaining the benefit for IMDs.” “The Korean pharmaceutical industry has already well-noted the government’s intent to redirect the industry’s effort on new drug development with the revised generic pricing reduction regulation. It would make a better sense for pharmaceutical industry and government to cooperate and together leap as an emerging pharmaceutical powerhouse than to strictly regulate IMD pricing,” said the director. However, MOHW begs to differ and argues drug pricing regulation is essential for Korea to become a new global pharmaceutical powerhouse. At a recently convened drug pricing-related policy seminar, the ministry reiterated its aim to significantly raise the proportion of new drug expenditure within the National Health Insurance (NHI)-covered drug expenditure breakdown. In other words, the ministry means to significantly cut down the NHI expenditure on expensive generic and IMDs. At a seminar convened last month by Korean Research-based Pharmaceutical Industry Association (KRPIA) about the social value of new drug and management of NHI, MOHW expressed its commitment to shift the NHI expenditure management towards new drug and explained, therefore, regulating the pricing of generic and IMD is unavoidable. A MOHW official at the seminar stated, “Other pharmaceutical powerhouses do not spend as much as Korea does on generics. Off-patent drugs should exit the market and inexpensive generic should fill up the market instead. While we needed to reconstruct the pharmaceutical expenditure structure itself, we happen to have reformed the generic pricing regulation first as a transitional step.” As a result, the pharmaceutical industry and lawmakers, and government would continue to clash about the IMD pricing benefit and regulation.
- Policy
- Impurity checks are left to the industry
- by Lee, Tak-Sun Dec 30, 2019 09:47pm
- As announced after the 2018 Valsartan incident, the MFDS focused on regulating generic entry this year. In the sense that all restrictions can be made, irrational systems were introduced as soon as possible to prevent the entry of generics. Generic regulatory measures, including restrictions on cooperative and entrusted activities, the introduction of three batches of commissioned generic trial production, and mandatory licensed generic DMF, have already been implemented or heralded. Among them, the joint and consignment limit is an administrative notice announced in April, and the domestic pharmaceutical industry is under pressure and is keen to implement it. Generic entry restrictions up to maximum aimed at consigned production items The restriction on the joint and entrusted bioequivalence test was cited as the most representative generic entry regulation when criticism was raised that there were many Valsartan preparations in which carcinogen NDMA was detected. Earlier this year, the MFDS held a meeting with CEOs to limit the number of items allowed for co-communication to 1 + 3 from 2020, and informed them that they will not allow it in 2022, three years later. In April, the government announced an amendment to the relevant regulations and is going to start at any moment. However, it is unreasonable regulation that the co-commission is not allowed. In 2010, the regulatory reform committee under the Prime Minister's Office was also braked. As the review of the proposed rule is delayed, it is noteworthy whether the 1+3 regulation, which was announced in the first half of next year, will be implemented on time. Currently, generic drugs of the same ingredient produced in the same plant through a consignment contract are replaced by a review of the existing Bioequivalence test by existing consignees. This has been criticized for the exponential increase in the number of generically approved generic ingredients. In November, it announced the introduction of another regulation. The contractor is obligated to produce three batches of licensed drugs that were exempted. The system, which disappeared in 2014, has also been revived in the name of preventing generic upheaval. Once this system is introduced, the consignor, who is entrusted with the production of the consignment company, must test and produce three batches as part of the GMP review, even at the time of generic approval. The domestic pharmaceutical industry is complaining of the burden of livestock costs due to the limitation of co-prosperity and the additional cost of trial production due to the revitalization of three batches. There are also new regulations that have already been announced as part of the ban on generics. In March, an amendment that mandates the submission of safety proof data on the genotoxicity or carcinogenic impurities and metal impurities of medicines will be announced in next September. In October, an amendment was announced to include licensed generics in stages for drug substance registration. ▲ Commercial drugs by December 31, 2021 ▲ High-cost drugs by December 31, 2022 ▲ Other drugs and drugs that require testing without a living body should register DMF by June 30, 2023. Since June 12, the pharmacological law revision has extended the restriction period for healthy people to participate in clinical trials to six months, making it difficult to conduct bioequivalence trials in the field. Ranitidine, Nizatidine Impurities Continue to Burst, direct assessment of all synthetic raw materials Even during the mobilization of generic regulations, the fear of impurities in pharmaceuticals did not go away. Following the hypertension Valsartan formulation, the carcinogen NDMA was continuously detected in the gastric ulcer therapeutic Ranitidine and Nizatidine formulations. Pharmaceutical industry officials attending the drug impurity response briefing held at Samjung Hotel on the 6th attended and showed interest.The MFDS banned sales and recovery of all Ranitidine products in September, and banned and recalled some Nizatidine products in November. In addition, as NDMA is detected in the anti-diabetic Metformin preparation in Singapore, some items are being recovered and impurity fears are still in shape. The MFDS instructed pharmaceutical companies to submit their own results of impurity evaluations to all synthetic materials by next May and test results on drugs concerned with impurities by May 2021 for self-examination of persistent impurity issues. Advanced Law Passes Parliament, laying grounds for fast track such as serious diseases Unlike generic regulation, new types of drugs have provided the basis for supporting rapid licensing. This is accelerated in August when the Act on Advanced Renewable Medical and Advanced Biologics Safety and Support passed the National Assembly. As a result, drugs that need to come to market early, such as serious illnesses, rare diseases, and pandemic infections, will be included in the expedited treatment for early approval. The organization and system are being set up by establishing the Convergence Innovative Product Support Group in the Korea Food and Drug Administration for the next August. However, the threshold for safety testing for advanced drugs has been strengthened due to the effects of ' Invossa', which was released in April due to the fact that the main component cells were changed and the license was revoked.
- Policy
- NHIS "providing reliable and reasonably priced generics"
- by Lee, Hye-Kyung Dec 30, 2019 06:19am
- Korea’s National Health Insurance Service (NHIS) has reported it would take over the generic management from next year. The Price-volume Agreement (PVA) system currently limited to new drug only would be also applied on generic pricing negotiation. The government agency plans to form a task force team to support Ministry of Health and Welfare (MOHW) making a related revision on the official notification. NHIS is focusing on the additional conditions required by side agreements for the generic pricing negotiation. The government body’s plan is to set a legal basis for imposing price reduction on rebate-providing drug as stated by the side agreement. President Kim Yong Ik of NHIS spoke at the end-of-the-year press conference for government correspondents convened recently, and stated “NHIS would endeavor managing generics next year,” and accordingly “we have acquired insights on generic supply structure through the recently completed research on prospective improvement on pharmaceutical supply and purchasing system.” The research is also known as the ‘All-around Pharmaceutical Product Research,’ initially led by then Professor Lee Eui-kyung of Sungkyunkwan University School of Pharmacy since November last year. The research was later passed on to her student Professor Lee Sangwon, as the former principal investigator was appointed as a new Minister of Food and Drug Safety, and it presented the final result of the research recently. The one-year-long study comprehensively delved into pharmaceutical development, manufacturing, supplying, distribution and consumption with key research topics, such as the present pharmaceutical industry status and regulatory policy in Korea; analysis on generic supply structure and efficient pharmaceutical expense management; new drug supply analysis and recommendation on improving efficiency in pharmaceutical distribution industry; recommendation on advancing pharmaceutical distribution transaction system; prospective vision and tasks of pharmaceutical supply structure. In particular, the research task of analyzing generic supply structure and improving efficiency in pharmaceutical expense management studied the present regulations and related improvements, and also analyzed generic manufacturing structure of Korean pharmaceutical companies. President Kim said, “80 percent of listed drugs at the moment are generics, and most of the health conditions are treated with generics. As we mentioned many times before, we, as an insurer, need inexpensive but good generics.” So far, the president has been emphasizing on amending the industry’s distribution structure for the ‘principle’ of providing the best drug with the lowest price. “We need reliable generics with reasonable price. But when it was announced NHIS would be managing the generics, the public thought we would recklessly lower the pricing. However, we see that consistent investment is needed to purchase even better quality of generics with even lower price,” said President Kim. In short, a ‘two-sided strategy’ is needed to purchase better priced but reliable generic with a consistent investment. President Kim stated, “We would make various plans for next year to figure out how to provide better quality but better priced generics.” Regarding the side negotiation for the generic pricing negotiation, Health Benefit Strategy Office Park Jong Heon mentioned, “A task force team would be formed early next year to support the process of amending the official notification. The amended negotiation procedure would not be in effect immediately from next year. The goal is to have the notification revised within next year.”
- Policy
- 'Brakes' on reimbursed drug’s listing process
- by Lee, Hye-Kyung Dec 27, 2019 06:27am
- This year, the insurance authorities were able to reorganize their drug price system to the organization of the person in charge of drug prices. Last year, The NHIS chairman Yong-ik Kim, who designed Moon Jae-in Care, was very active, and this year, there have been a number of institutional improvements that have been carried out by staff in charge of implementing the policy. In the drug sector alone, there were many big and small things happening, including the expansion of screening benefits and RSA drugs, and the creation of contracts that included supply obligations prior to drug price negotiations and patient protection and confidentiality. As the HIRA manages the health insurance finance, it has to focus on the income expansion to support the policy of strengthening security and the task of spending expenditure efficiency. If the focus has been on finding new drug-based follow-up management plans, next year, it will continue to seek ways to improve the 'price-volume agreement' that has been spinning the wheels with research services several years ago. The HIRA reviewed the revised economic evaluation guidelines and reference methods for foreign drug prices until the second half of this year to improve the drug listed system. In August, the RSA target was expanded from cancer and rare diseases to severe and intractable diseases, and the severe atopic dermatitis, Dupixent, will be paid from next January. ◆Enhancing Access to Medicines by Moon Jae-In Care= This year, the first case of drug screening benefits was released. In order to strengthen health insurance coverage, six types of anti-cancer drugs, which had no reimbursement standard or remained as 'baseline non reimbursement' at 100% of the copayment rate, were selected as a screening benefit. The protagonists of the first screening benefits include breast cancer treatments ‘Perjeta (Pertuzumab)’, ‘Halaven inj (Eribulin)’, Prostate Cancer Therapeutics, ‘Xtandi soft cap (Enzalutamide)’, and ‘Zytiga (Abiraterone)’. RSA targets for late-release drugs were also expanded. Dupixent, which was not an anticancer drug or a rare disease treatment drug, had difficulty in applying RSA expansion, but the health insurance policy review committee decided to complete the reimbursement registration process on the 23rd. The MOHW applies a special calculation to reduce the incurable cost of medical expenses (20~60% → 10%) for rare and incurable diseases, and expanded the target diseases. In January of this year, The MOHW identified 100 rare diseases and included them in the exception, and added 91 new rare diseases in the second half of this year. In the case of medicines, health insurance coverage is being expanded to focus on the treatment of serious diseases such as anticancer drugs and rare diseases. Compared to 2016, anti-cancer drug spending rose 41% from ₩1.47trillion to ₩1.46trillion in 2018, and rare disease treatment spending increased 81% from ₩235.2 billion to ₩4265 billion. During the same period, the drug cost growth rate exceeded 19%. This year, a new high-priced drug called Spinraza, which costs ₩560 million for the first year and ₩280 million from the next year, will cost ₩92.35 million per vial per patient. It is also a significant year for reimbursement listing under both total contracts system and RSA. ◆Reorganization of departments related to drug price in the HIRA=The organizational reform of the department in charge of drug prices in the HIRA, which was in charge of the implementation of Moon’s care, was an issue. The HIRA changed the existing insurance reimbursement division to the reimbursement strategy division from January 1 through amendment of the Order Regulations and the Enforcement Rules of the Order Regulations, and increased the departments related to drug prices from two to three. Dr. Jong-Heon Park, former researcher, was appointed as the head of the reimbursement strategy division. Since the establishment of the Drug Price System Division, it has also lowered the threshold of 'secret drug price negotiations' by opening a foreign drug price inquiry guidelines bulletin board and opening the drug price negotiation drug. In July, the glass ceiling of the 2nd level pharmacy occupation promotion of the HIRA broken. In order to guarantee the opportunity for promotion of pharmacy jobs, which was stopped at Level 3, the HIRA has been reorganizing its personnel and organizational regulations since 2017. As a result, Nam-sun Shin, the head of drug price negotiations, a second-level manager was produced from the pharmaceutical industry. ◆The HIRA, fix the drug price system= Last year, the Economic Evaluation System Improvement TFT was operated to revise the economic evaluation guidelines for medicines. TFT focused on the comparative drug, ICER, utility, and discount rate that the pharmaceutical industry has pointed out. Based on the TFT report, the HIRA is publishing commissioned research announcements to develop guidelines and conducting research. The economic evaluation system was created in 2007 following the introduction of a drug screening system. Over the past decade, the Economic Evaluation Subcommittee of the Committee on Drug Benefit Evaluation has reviewed data of approximately 190 ingredients (80 times) based on economic evaluation guidelines. However, since the guidelines used to evaluate the economic feasibility have been applied since the beginning of June 2006 and only one revision was made in December 2011, the pharmaceuticals complain that the reality is not reflected. At the Fifth Health Insurance Policy Review Committee held on April 3rd, there was a brake on the decision to skip negotiations. Another issue is the decision to delay negotiations to negotiate during the April 3 meeting of the Health Insurance Policy Review Committee. At the time of the face-to-face screening process, 90-100% of the weighted average price of alternative drugs was accepted and drug price negotiations were skipped. Among the drugs envisaged by the Health Insurance Policy Review Committee, there was a brake on reimbursement such as antidepressant Agotine tablet of Whanin, Faslodex of breast cancer treatment of AstraZeneca Korea, and Alunbrig tablet of non-small cell lung cancer treatment of Takeda. This is because members of the Health Insurance Policy and Deliberation Committee have put in place conditions for the drug price agreement. The conditional resolution was foreseen to some extent from the time the Ministry of Health and Welfare switched all the drugs proposed to the Health Policy Review Committee to face to face examination. The MOHW raised the CJ Healthcare's K-cap tablet for gastroesophageal reflux disease to the Health Insurance Policy Review Committee on February 26, and decided on an internal policy to turn the face-to-face examination of drugs that had been settled through price negotiations. From this point on, a subsidiary agreement on 'performance of supply obligations' will be drawn up for all drugs undergoing drug price negotiations with the HIRA, and the 'pre-counseling system' will be actively operated until the Minister of Health and Welfare 's order for drug price negotiations. The HIRA has signed and managed a contract containing the same provisions, including 'Supply Obligations and Patient Protection' on 172 drugs of 59 pharmaceutical companies by October this year. It is necessary to negotiate in advance whether there is a drug that can be replaced by itself and how the supply will proceed in the future. In the research process conducted by the HIRA, the foreign drug price standard referred to in the process of listing domestic drug benefits is added from A7 (USA, UK, Germany, France, Italy, Switzerland, Japan) to A10 (additially Taiwan, Canada, Australia). When the results of the study suggest that they should be expanded. The movement has begun to improve this. Recently, the HIRA also added 'Post-Pharmaceutical Evaluation' and 'Herbal Drugs' to the Subsidy Commission of the Pharmaceutical Benefits Evaluation Committee. The new Sub-Committee on Subsequent Drug Evaluation will conduct post-evaluation of those drugs that have extended their coverage by anticancer drugs, rare drugs, and clinical usefulness, which are expensive drugs. ◆Yang-ho Cho ’s issue=n last July, the prosecution filed a warrant for arrest of the chairman of Hanjin Group, Cho, Yang-ho, for fraud, embezzlement, and duties. He also illegally borrowed a pharmacist's license and ran a pharmacy to violate the pharmacist law, and retrieval process begins for ₩100 billion in insurance financing. Six criminal detectives at the Southern District Prosecutors' Office investigated Cho's suspicion of escaping the inheritance tax, and have been accused of running a pharmacy illegally as a nominee for over 20 years. But, on April 8, when President Cho suddenly passed away, the trial proceedings have been disrupted including violations of the Pharmaceutical Affairs Law. At present, Mr. Cho's illegal pharmacy trial continues against Mr. Won, a pharmacist Lee, and his spouse Mrs Ryu , who conspired to commit the crime. Sue was suspected of violating pharmacological law by opening a pharmacy on the first floor of the company's annex under the name of pharmacist Lee, through Mr. Won and Mrs Ryu. ◆Field survey=Since this year, the self-check system has been expanded. The autonomous check system was introduced to allow the reviewers to detect and report unfair claims by informing the appropriate nursing institution of the possibility of unfairness of the reimbursement expenses already paid before the on-site investigation. Trial project from December 2017 ▲ Temporary mandibular joint shooting (1st) ▲ Increase of claims after divided use of injection (2nd) ▲ Violation of breast biopsy calculation standard ▲Pharmacy differential index and night addition error claim based on the results of the autonomous inspections in turn, the autonomous inspection system was introduced in earnest from November 1, 2018. The HIRA noted that such a problem was also pointed out by the State Auditor last year. The HIRA feels the necessity of reviewing administrative measures for improvement based on the type and billing amount. On the other hand, the NHIS has argued that employees of the HIRA should have the special judicial police right to eradicate operated hospitals by office manager, not a doctor. ◆Bending of the first ₩1 trillion in history= The NHIS announced the average rate of increase in the conversion index for nursing institutions on the 1st of next year at 2.29% (bending ₩1.47 trillion). Although it was determined to be slightly lower than 2019 (2.37%) in consideration of the subscriber's ability, financial integrity, and medical expenses growth rate, it recorded the first ₩1 trillion in sales. Next year's budget is estimated at ₩1.4688 trillion, with ₩434.9 billion for hospitals, ₩93.5 billion for dentistry, ₩66.9 billion for oriental medicine, and ₩114.2 billion for pharmacies. The rate of increase was 3.5% in pharmacies, 3.1% in dentistry, 3% in oriental medicine, and 1.7% in hospital, but the order of the distribution of bending shares was reversed. ◆DUR Advancement Pilot Project=The Drug Utilization Review (DUR) Advancement Pilot Project, which has been in progress since August 1st, was completed this month. The HIRA conducted a pilot project for 20 medical institutions (2 senior general hospitals, 2 general hospitals, 1 hospital, 4 clinics, and 11 pharmacies) in the second half of this year. Based on the results of 2018 DUR Research Plan for Advancement of DUR, the pilot project was undertaken to establish a comprehensive management system before and after drug use as well as to establish a compensation system. And there are two types of systems in which pharmacies participate: aftercare, allergy, and adverse event monitoring. ◆Drug serial number system= From January 1, the serial number system has been implemented. The average reporting rate for the first half of all distributors released in August was 89.1%, at the time of shipment, 2591 companies (96.4%) had a serial number reporting rate of more than 50%, and 98 companies (3.6%) had less than 50%. The appeals of 18 wholesalers were cited as a result of the request by the HIRA to 98 companies for administrative disposal. 80 unappealed or rejected complaints were selected as the final administrative disposal request companies and notified to the public health center. In the second half of this year, the administrative reporting criteria for the distribution number serial number of distributors have been raised from 50% to 55%. From July to December this year, after the first half of this year's accounting period, requests for administrative disposal of manufacturing import companies are applied from the serial number reporting rate in the second half of this year.
- Policy
- Severe atopic drug Dupixent listed, first benefit from RSA
- by Kim, Jung-Ju Dec 26, 2019 06:34am
- Sanofi Aventis' treatment for severe atopic dermatitis, Dupixent PFS 300mg (Dupilumab), will be listed next month after all of its reimbursment hurdles. Although it was not an anticancer drug or a rare disease treatment agent, there was a difficulty in expanding the RSA, but the government and the health authorities were able to follow this track as they decided to expand the RSA disease. The MFDS held a Health Insurance Policy Deliberation Committee this afternoon, saying Dupixent's reimbursement was resolved. Dupixent was the first to be listed due to the expansion of RSA diseases. According to the resolution, the drug is listed on the first day of next month as an RSA with a combination of initial treatment refund type, refund type and total limit type. The reimubrsed price is ₩710,000 per syringe. The RSA initial treatment reimbursement type included in this drug contract is the reimbursement by the pharmaceutical company to the NHIS for the initial period of time. In addition, the refund type refers to the pharmaceutical company refunding a certain percentage of the drug bill to the NHIS, and the total limit contract is the mechanism by which a pharmaceutical company refunds a certain percentage of the amount to the NHIS if the actual amount exceeds the pre-set annual expected cap. Dupixent entered the domestic market in earnest with the approval of the MFDS on March 30 last year. Following the application for insurance registration on Feb 22 this year, the Pharmaceutical Benefits Evaluation Committee (Pharmaceutical Committee) was determined to be eligible for RSA on July 25. Later, on October 10, Formulary approval was recognized. The drug price negotiations with the NHIS were held from Oct 22 to Dec 17. At the time of deliberation, the textbook and clinical guidelines indicated clinical usefulness in severe atopic patients who were not adequately controlled or recommended by local or systemic immunosuppressants. Indeed, the cost of one-day administration is more expensive than alternative drugs, but the cost-effectiveness is considered to be acceptable through additional RSA and economic evaluation. Looking at the prices of major seven countries (A7) referring to the prices, they are listed in the United States, Italy, the United Kingdom, France, Germany, and Japan, and the A7 foreign drug prices (adjusted average price) are set at ₩ 971,661 per syringe. Meanwhile, the annual fiscal expenditures (estimated billings) presented during the drug price negotiations with the NHIS are about ₩76.2 billion.
- Policy
- Unpaid medical benefits “fully solved next month”
- by Kim, Jung-Ju Dec 26, 2019 06:31am
- The government reflected the unpaid medical benefits in the budget of ₩100 billion in next year's budget. Most of this year's unpaid payments have been resolved, and the unpaid payments of nursing institutions, which appeared at the beginning & the end of the year, are being resolved somewhat. However, dues are reflected in next year's budget, and may occur partially in some regions. The MFDS said in a recent question by the Professional Reporters Council that the unpaid medical benefits to be received by nursing homes this year have been resolved by supplementary budget, and the budget has been secured by reflecting the expected unpaid payments next year. The medical care budget for next year is about ₩7 trillion, an increase of ₩600 billion from ₩6.4 trillion this year. The reimbursement per capita has increased by more than 16%, the MFDS said that it was first reflected in the budget to prevent unpaid payments. Looking at the budget by year, it is increasing by ₩4.59 trillion in 2015, ₩4.81 trillion in 2016, ₩5.24 trillion in 2017, and ₩5.61 trillion in 2018. Nursing institutions, including pharmacies and other hospitals, have complained of difficulties in management due to the delayed payment of medical benefits for several months at the beginning & the end of the year. According to the MFDS, Ministry of Health and Welfare Committee Seung-Hee Kim's report presented at the National Audit, the unpaid medical benefit in 2018 was ₩869.5 billion, the highest ever. This is an increase of ₩430.9 billion (98%) compared to 2017, which is doubled compared to last year. As a result, the unpaid amount reflected in next year's medical benefit budget amounted to ₩108.7 billion. However, the MFDS explained that due to the portion reflected in next year's budget, the unpaid amount may be partially generated in some attempts. The Ministry of Health and Welfare said, “We expect little delay in payment every year, and the nursing institutions like pharmacies and hospitals would take a breather”.
- Policy
- Moon Care on new drug and generic pricing in 2019
- by Kim, Jung-Ju Dec 26, 2019 06:29am
- The Moon Jae-in administration’s ambitious Moon Jae-in Care has directly affected the drug pricing system, essential to the insurance coverage. The healthcare coverage enhancement policy lowered the threshold of new drug listing standard, but further complicated the post-marketing drug pricing system. Also Ministry of Health and Welfare’s (MOHW) had its pharmaceutical benefit sector to concentrate their drug pricing capability on the designing of the technicalities of the healthcare policy. Lowered threshold, but complicated post-marketing evaluation for all-around management of generic and new drug The impact of the groundbreaking insurance coverage enhancement program by the Moon Care has struck down on the general drug pricing system this year. In the beginning of the year, the government, as previously notified, presented generic pricing and new drug listing system revision, listed drug reevaluation and pharmaceutical expense management all at once. For the bigger frame of enhancing healthcare coverage and reducing the people’s medical bills, the government has decided to progressively reinforce coverage on new drug while strictly managing already-listed new drugs and generics. To better manage quality of generic after the valsartan contamination issue, the government has decided to link approval and drug pricing system under the name of ‘3+1 System.’ Ministry of Food and Drug Safety (MFDS) revised the generic approval system and pricing system to gradually lower pricing of items depending on the number of listed items. In July, MOHW issued an administrative notice on partially revised regulation of ‘Pharmaceutical Affairs Decision Making and Approval Criteria’ with the said changes, and plans to finalize it by the end of the year. On the other hand, the barrier of new drug listing has been alleviated. The RSA eligibility and scope have been expanded for high-cost new drugs as constantly demanded by the industry. But for an item to choose the option, it has to pass the three following conditions; a drug used for treating cancer or disease either recognized by ‘Special Case Standard for Partial Copayment Benefit’ or ‘Special Case Benefit for Patients with Rare Disease and Chronic Disease’; drug with clinical efficacy proven to improve quality of life or recognized so by a related committee; drug recognized as Breakthrough Therapy Designation (BTD) or Priority Medicines (PRIME) by the US Food and Drug Administration (FDA) or European Medicines Agency (EMA), respectively, or recognized as equivalent by Drug Reimbursement Evaluation Committee (DREC). But some have raised an issue about the regulator turning Health Insurance Policy Deliberation Committee (HIPDC) on-paper reimbursement listing review into a face-to-face review for new drug exempted from negotiation. They claimed it would cripple the system’s effectiveness and accessibility. Meanwhile, the government plans to establish a listed drug reevaluation standard and to elaborate the post-marketing evaluation procedure. The three reevaluation types—external reference pricing, listing contract expired drug, and performance-based post-marketing evaluation—would be categorized by literature-based reevaluation and real world evidence (RWE)-based reevaluation. But the industry is firmly opposing on the notion of reevaluation, as the result of the reevaluations would eventually either reduce reimbursed price or adjust the general pricing lower. Reevaluation procedure on reimbursed drugs (summarized by Daily Pharm) The government also finalized the ‘7.7 Pricing System’, which raised both Korean and global pharmaceutical companies’ eyebrows, as its initial version and enforced it from this year. First it started from the KORUS FTA renegotiation agenda, but technically the government dropped both benefit for Korean-made new drug exporting to global markets and the U.S.-based multinational pharmaceutical companies’ demand for new drug pricing benefit. Considering the government had its agenda behind it, the industry reprehended the government last year for its concerning and unfair action. The Drug Pricing Benefit for companies states the manufacturer and suppliers of WHO-recommended essential drug or National Essential Drug as designated by Article 2 of the Pharmaceutical Affairs Act should be confirmed to manufacture and supply without an issue. And the government would strip the pricing benefit of the companies, if they have issues supplying drugs on the Reimbursed Drug List, or were imposed with administrative penalty or convicted by a court for providing illegal rebate, according to Paragraph 2 of Article 47 of the Pharmaceutical Affairs Act. But there are exceptions. A company that suspends the supply of the drug with following reasons would be exempted from the penalty; in case manufacturing plant is shut down or closed; manufacturing, import or sales approval is suspended or canceled; new issue of safety or effectiveness arises; manufactured or imported supply shortage occurs due to surged demand (except when the demanded amount is within the predicted billing amount); when the company is faced with inevitable natural disaster. The government is also continuing on with the rebate prevention policy. The so-called ‘K-Sunshine Act’ was enforced and required pharmaceutical companies to file, archive and submit financial profit provision record (within the allowed amount by Pharmaceutical Affairs Act), or the expenditure report. At the moment, the government is reviewing the submitted expenditure reports. The government is focusing on analyzing and investigating expenditure types to set the system down. However, the companies may undergo investigation by prosecution when correlation between their expenditure and rebate are clearly found. The insurance coverage enhancement policy implemented this year constructed with substance-by-substance reimbursement, expanded listing of high-cost drug, and listed drug reevaluation would base even more specified drug pricing policy for next year. The industry is expected to see the effect in the field. Moon Care ploughs on with coverage enhancement with selective reimbursement This year was the first year for the first National Health Insurance Comprehensive Plan. Last year the government was sketching out the technicality of the Moon Care, and this year it was busy executing the detailed policy actions in the set order. Starting from the first pilot program of primary healthcare-based chronic disease management (initiated from December 2018), the government gradually increased healthcare coverage on ultrasound scan, essential check up and treatment for lower abdomen (rectums and anal passage) and urinary system (kidney and bladder). Moreover, coverage on cavity treatment for children under 12, thoracoabdominal MRI scan and Korean medicine treatment has been granted this year. In addition, the government started the pilot program for Community Care that integrated healthcare and welfare, providing customized benefit by each region across the country. On July 2, President Moon Jae-In presented the importance of National Health Insurance, performance of coverage enhancement and prospective plan at the ‘Second Anniversary Briefing of NHI Coverage Enhancement Initiative Implementation’ convened at NHIS Ilsan Hospital. The healthcare coverage statistics presented by the government in July found the coverage rate in general hospital was increased from 62.6 percent in 2016 to 67.2 percent in 2018. But with the figure, the public is skeptical about the government raising the National Health Insurance premium by 3.2 percent. The skepticism is not only about the premium increase, but also about ultimately reducing the people’s medical bills by fixing insurance income source and increasing rate of the government funding. Both industrial organizations and civic groups are urging the National Assembly to push up the government funding rate up to 20 percent to keep the moderate balance of medical service fee and coverage rate. Currently, Ministry of Economy and Finance has promised MOHW to provide the government insurance funding of 14 percent for next year, which MOHW would utilize on reinforcing insurance coverage programs.
- Policy
- Korea’s Drug expense management to settle on ‘trade-off’
- by Lee, Hye-Kyung Dec 24, 2019 06:10am
- Apparently, the government is to redirect finance saved by dropping drug with unproven clinical efficacy from reimbursement listing and adjusting drug price to provide coverage on new drugs for treating severe and rare disease. It would mean that the ‘trade-off’ strategy kept mentioned by Korea’s Ministry of Health and Welfare (MOHW), as a part of the National Health Insurance Comprehensive Plan, would be implemented soon. The technicality of the trade-off strategy and the tentatively named ‘Severe Disease Drug Expense Account’ would be included in the ‘Pharmaceutical Listing and Adjustment Standard’ MOHW is to publicly notify soon after the pre-announcement period started from September. Deputy Director Choi Kyung-ho of Pharmaceutical Benefit Division at MOHW reiterated the notion of ‘money pot’ when describing the trade-off strategy at a policy seminar convened on Dec. 19 about insurance coverage on immunotherapy by Lawmaker Kim Kwang-soo. The deputy director pointed out, “England has Cancer Drugs Fund (CDF) that sets a road map to manage National Health Service (NHS)-covered drug and its annual action plan, but it has a limitation on the ‘money pot’”. The government official indirectly mentioned of the Korean ministry planning to reallocate saved drug reimbursement to cover severe disease drug expense as a trade-off. Deputy Director Choi stated, “Whether it be a household or a state, they need to get an access to money when need be. But there are not many pots of money available, realistically. We need to reevaluate drugs to sort out drug underperforming and ineffective than expected and even considered valueless in other countries”. Recently, Health Insurance Review and Assessment Service (HIRA) held a public hearing on pharmaceutical reimbursement reevaluation standard and procedure, and stated it would conduct a post-marketing review on high-cost anticancer and rare disease treatments with uncertainty in clinical efficacy based on foreign government insurance listing status, usage frequency, and ratio of claimed reimbursement. In short, the government is to revisit pharmaceutical expense increase rate and reimbursement claim cost. Deputy Director Choi stressed, “The ministry is trying to create a pot of money, or an account, by reevaluating listed drugs and reusing saved finance on anticancer or rare disease treatment. Only when we save money from the reevaluation, we would be able to use it as resource to cover anticancer or rare disease treatment”. A so-called trade-off or money pot is a tentatively named Severe Disease Pharmaceutical Expense Account as stated the National Health Insurance (NHI) action plan. The action plan aims to generate an account from adjusted and saved NHI expense according to pharmaceutical reevaluation to utilize it on enhancing coverage over high-cost severe disease treatments. The government is considering various means to operate the Severe Disease Pharmaceutical Expense Account without revising statute, but by having National Health Insurance Service (NHIS) to manage the account separately like the National Health Promotion Fund. In September, Song Young-Jin from the Pharmaceutical Benefits Division published an article in the September issue of HIRA Policy Report and also stated “The government plans to differentiate evaluation style or gradually apply evaluation model, taking in account of unique pharmaceutical quality, on selectively reimbursed drug, high-cost severe disease treatment, conditionally approved drug, evaluation-exempted drug or drug underperforming than expected.” The government official also has mentioned of establishing future reevaluation initiative by reviewing past pharmaceutical reevaluation cases and similar cosigned research, and also set pilot program for year 2020 to expand reevaluation system gradually.
- Policy
- Moon Jae-in Care needs speed control
- by Lee, Hye-Kyung Dec 23, 2019 06:29am
- There were voices of concern that the government's policy to strengthen health insurance guarantees could weaken domestic economic growth potential and national competitiveness. The Korea Employers Federation (Chairman of KEF, Kyung-sik Sohn) held a session on the 19th to evaluate the 1st National Health Insurance Comprehensive Plan (2019 ~ 2023) under the theme of 'National Health Insurance, Sustainable?'. The debate was held in the public's concern about the financial crisis of health insurance due to the overlap of policy factors such as increased measures to the medical use due to aging. In the past 10 years (2008 ~ 2018), Korea's medical expenses growth rate is 6.9% per year, three times the OECD average of 2.3%, and the fastest rate among 36 member countries. In the case of National Health Insurance, which accounts for the largest proportion of medical expenditures, which have increased by 8% every year for the past five years (2014 ~ 2018), are expected to increase by more than 13% this year. Yong-geun Kim, the Vice President of the KEF, said, “Recently, medical expenditures are rapidly increasing, which raises the public's concern about the financial crisis of health insurance, at the current rate of increase in medical expenses, it will soon become a factor that weakens growth potential and national competitiveness as excessive national resources are put into the medical sector”. Mr. Kim said, “Expansive radical guarantees will entail excessive insurance premiums, which will eventually lead to a vicious cycle of lowering private investment and consumption and reducing economic vitality, and it needed to adjust the speed of security measures”. The government plans to raise the rate of health insurance premiums by 3.2% annually to cover the cost of expanding the coverage, but this also means that in the era of low growth with an economic growth rate of around 2%, the burden on the people and businesses is beyond. Mr. Kim said, “Companies paying 43% of the total health insurance income cannot afford to pay premiums anymore due to the deteriorated business environment and poor performance, we need to focus on improving fiscal soundness by rationally improving health care spending while minimizing premium rate hikes”. He also called for a full reform of the health insurance system to make more efficient use of limited resources, and he cited the resolution of moral hazards in the medical field, revitalization of private insurance subscribers, the introduction of incentives for reducing medical expenses, the expansion of comprehensive budget system, the reduction of drug costs, and the introduction of the primary doctor's system. In addition, he urged a preemptive reform of the committee's operating system so that the opinions of companies (labor-management) and community members who are responsible for health insurance can be reflected in a greater proportion. Professor Hee-kyun Yang, Kyung Hee University, who was in charge of the first presentation, predicted that the burden of subscribers would increase because there is no way to solve the overuse of medical services due to the expansion of the guarantee coverage. Therefore, in case of excessive anticipated medical use (MRI, ultrasound, anticancer drugs, treatment materials, etc.) and services (elderly outpatient’s flat sum system, copayment limit, long-term hospitals, upper ward benefits) The government said that it is necessary to prepare a management plan for discounts and surcharges. As a plan to alleviate the phenomena of large hospitals, it was required to establish a four-stage medical delivery system (clinics-hospitals-advanced hospitals-nationalwide hospitals), including the establishment of a nationwide hospital using the total contract method. The second speaker, Seong-in Chang, a professor at Yonsei University, predicted that the cumulative reserves, which amounted to ₩20.8 trillion in 2017, will be exhausted in 2022. Professor Chang said, “To secure financial health of health insurance, we must break away from the stereotype of solving all things with one health insurance and establish a hybrid medical security system that properly connects social security and market economy principles, we need to consider introducing a lifetime health account that manages parts as an individual account”. Seok-yong Chang, a professor of Eulji University, the third speaker, pointed out that despite the establishment of the 1st National Health Insurance Comprehensive Plan, there is still no high-level health development plan. Professor Chang said, “As the rules of the game need to be carefully reviewed, we need a social consensus on strengthening the representation and professionalism of members and the formation of public interest committees in decision governance such as the Health Insurance Policy Review Committee and the Financial Steering Committee, and considering the enormous amount of financial operations, it is necessary to establish a pre-control mechanism of the National Assembly”.
- Policy
- Who holds the key to end financial toxicity?
- by Lee, Hye-Kyung Dec 22, 2019 09:52pm
- (From left) Professor Kim Hee-jun of Chung-Ang University Hospital, Professor Lee Dae-Ho of Seoul Asan Medical Center Department of Oncology, Professor Park Ji-hyun of Konkuk University Medical Center Department of Hemato-oncology, Professor Suh Dong-Churl of Chung Ang University College of Pharmacy, Baek Jin-young Korea Kidney Cancer Association, and Deputy Director Choi Kyung-ho of Pharmaceutical Benefit Division at MOHW Doctor: “Although it’s non-reimbursed, the immunotherapy option is recommended for kidney cancer. But it’s expensive” Patient: “How much is it?” Doctor: “It’s about 10 million won per month”. Patient: “Can I get fully recovered”. Doctor: “It’s not guaranteed”. Patient: “It’s too expensive”. Doctor: “Discuss and decide with your family after checking the price, if you have a private insurance.” At a policy seminar convened on Dec. 19 about enhancing coverage for immunotherapy, President Baek Jin-young Korea Kidney Cancer Association enacted a common conversation between a doctor and kidney cancer patient. The seminar was organized by Lawmaker Kim Kwang-soo at a seminar room in the National Assembly Member’s Office Building. President Baek said, “During the three-minute counseling time, cancer patients have to listen to a doctor talk about financial toxicity first than the severity of their own health. It happens quite often.” Professor Kim Hee-jun of Chung-Ang University Hospital and Professor Park Ji-hyun of Konkuk University Medical Center Department of Hemato-oncology nodded their heads at President Baek’s story. Professor Kim stated, “It’s dishearteningly relatable. Once when a colleague visited and listened to a conversation between my patient and me, she commented it sounded like I was selling a private insurance. I have to ask patients about their private insurance status and limits. And even if I show a survival rate graph after the talk, I know they are not paying an attention anymore.” She added, “When Obdivo announced its launch in Korea in 2015, I was excited. But it’s disheartening that I cannot use it for all patients.” President Baek and Professor Kim proposed that the special case benefit applying five percent patient copayment rate from first-line therapy could be raised. President Baek claimed “Cancer patients should also stop being stubborn about the five percent copayment rate, but embrace the opportunity to choose different options with higher copayment rate. It is also crucial for pharmaceutical company, patient and government to share the initial risk of uncertainty in treatment efficacy, and to establish reasonable standard of reimbursement.” Professor Kim also added, “At first, I was grateful for the five-percent copayment rate. But the more new drugs were launched, the longer patients had to fight against cancer. Back in the day, cancer patients had about less than a year to survive. But the survival period has gotten longer. We need to carefully consider raising the copayment rate a little bit for all cancer patients to benefit from the system.” Professor Lee Dae-Ho of Seoul Asan Medical Center Department of Oncology pointed out, “The root of all problem is money.” The professor elaborated, “We need to consider if the people would be happy to enhance coverage on four major severe diseases, and if they would be happy to spend their tax money on cancer patients,” and “I also don’t mean to reduce the price of drugs for those pharmaceutical companies trying to bring new drugs to Korean patients.” “It’s skeptical if profit-seeking pharmaceutical companies are truly for the patients,” because it is “unconvincing for insurer paying for the health insurance expenditure [to expand coverage on anticancer treatment], when the companies demand for improved access on new drug, but don’t put an effort to lower their drug price,” the professor added. New drug reimbursement application, it’s up to pharmaceutical companies After a series of criticisms from the panels, Ministry of Health and Welfare (MOHW) defended their position with vulnerable financial situation. Deputy Director Choi Kyung-ho of Pharmaceutical Benefit Division at MOHW urged, “Besides people’s overestimation of immunotherapy as a miracle elixir, it is still an unknown territory as an insurer who has to pay for the insurance expenditure. We need at least a tool to confirm its response rate to grant insurance reimbursement”. Accordingly, Health Insurance Review and Assessment Service (HIRA) is conducting a RWD research for post-marketing evaluation, and National Health Insurance Service (NHIS) is conducting a study on expenditure efficiency for financial feasibility. Deputy Director Choi noted, “We always feel sorry for patients and their family, and we are regretful that we cannot provide the right weapon for medical profession to fight against cancer with. However, it is also regretful that all the responsibility for the unfortunate state is blamed on the government”. The government basically pointed out the public thinking the government is keeping the last key back to end the pharmaceutical company’s tug-of-war against the government, insurer and NHIS with the new drug pricing negotiation. Deputy Director Choi elaborated, “The government is not the one with the last key. MOHW, NHIS and HIRA exist to keep health insurance expenditure justifiable. As the insurance finance is not from a bottomless pot, the ministry set the drug pricing regulation for pharmaceutical companies to apply for reimbursement with according to their drug’s financial impact and patient protection measures and to have negotiation with government for the reimbursement listing.” Deputy Director Choi Kyung-ho of Pharmaceutical Benefit Division at MOHW “Negotiation does not proceed with a unilateral yielding, but it is rather a process of reaching an agreement and seeking a way within the system. The government asks for new drug’s response rate, financial toxicity, and clinical data to base reimbursement decision. But some companies don’t even speak a word. We are not to name names, but the pharmaceutical companies are the ones holding back the key”, the deputy director reprehended. The government official also mentioned of a foreign financial support system, Cancer Drugs Fund. Deputy Director Choi said, “Some have suggested a sort of ‘money pot’ is needed when setting up the National Health Insurance Comprehensive Plan. So we are trying to make an individual account to cover anticancer and rare disease treatments with money saved from reevaluating drugs with low efficacy or not delivering expected effect”. Regarding the five-percent special case reimbursement rate, the official said “We are considering on expanding selective reimbursement scope.” “We are contemplating a realistic solution like preliminary pricing reduction for a limited number of cancer patients. Although monotherapy exists, also having a combination therapy makes the situation complicated. We would do our best to improve patient’s new drug accessibility,” said the deputy director.
