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- 2025-12-18 15:33:00
- Opinion
- [Reporter’s View] Real test begins for K-CDMOs
- by Son, Hyung Min Sep 15, 2025 06:01am
- In the midst of global supply chain restructuring, Korea’s CMO (Contract Manufacturing Organization) and CDMO (Contract Development and Manufacturing Organization) industries are emerging as new growth drivers for the biopharmaceutical sector. The shift away from China is acting as an opportunity factor, while independent achievements based on Korean firms’ technology and quality are also increasing. However, challenges such as potential overcompetition and global political and security risks still loom large. Samsung Biologics has been securing large-scale contracts since the beginning of this year. The company signed agreements worth more than USD 1 billion each with pharmaceutical firms in the U.S. and Europe. Its cumulative orders for the year have reached KRW 5.2435 trillion, nearly matching last year’s total of KRW 5.4035 trillion in just 8 months. Since its founding, the company’s cumulative orders have exceeded USD 20 billion. ST Pharm, though smaller in size, is also attracting attention with solid contracts. It secured a KRW 20.3 billion deal with a European pharmaceutical company for small-molecule APIs, and a KRW 18.3 billion supply contract with a U.S. biotech firm for oligonucleotide APIs. Its order backlog surged 76% from KRW 232 billion at the end of last year to KRW 407.9 billion as of date. Once considered a latecomer in RNA therapeutics manufacturing, ST Pharm has quickly increased its presence by signing consecutive deals with global companies. SK Pharmteco achieved a symbolic milestone in December last year with a KRW 2 trillion order for obesity drug APIs. At a time when global pharmaceutical firms are heavily investing in the development of GLP-1 class drugs, the fact that a Korean CDMO has actively joined this trend carries significance. At the same time, the company has also demonstrated diversification potential in cell and gene therapy (CGT), securing a contract with Switzerland’s Ferring Pharmaceuticals for a bladder cancer therapy. Smaller and mid-sized firms are also moving actively. ENcell signed a KRW 5.7 billion AAV gene therapy CDMO contract with the Korea Research Institute of Bioscience and Biotechnology in July, the largest single deal in the company’s history and equivalent to 80% of its annual revenue. Prestige Biologics landed a KRW 13.2 billion deal with an undisclosed pharma company, laying the groundwork for long-term CDMO operations. Medipost also entered the CDMO market in earnest with a KRW 2 billion deal for cell therapy manufacturing. However, viewing this trend solely as a ‘tailwind’ may raise issues. While it's true that global pharmaceutical companies are turning their attention to Korea, it also means the competitive arena has broadened and become more complex. Potential manufacturing bases like India and Eastern Europe are also rapidly expanding their scale. This is precisely why Korean CDMOs must differentiate themselves by emphasizing development capabilities and innovative technologies, moving beyond simple contract manufacturing. Moreover, the moment dependency increases, paradoxically, so does the risk. If revenue becomes concentrated on specific companies or products, the structure becomes entrenched, making it more vulnerable to external environmental changes. To avoid a ‘second China dependence’ incident, the contract portfolio needs to be diversified, and a mid-to-long-term investment roadmap supported. The surge in orders driven by the de-China effect is also sparking concerns of excessive competition among Korean companies. While the U.S. Biosecure Act may restrict Chinese firms, companies from Japan and Eastern Europe are also moving to capture opportunities in supply chain realignment. This makes it difficult to assume that Korea alone will enjoy a sustained boom. The recent contract wins are certainly encouraging signals. Yet, as the saying goes, true competitiveness lies not in winning contracts but in maintaining them. What is needed now is not celebration, but sober assessment.’ The boom Korean CDMOs are experiencing is only the beginning. The answer to whether they can lead the global market through ‘development’ and ‘innovation’ beyond mere ‘contract manufacturing’ will naturally emerge through the challenges ahead.
- Opinion
- [Reporter's View] Interest Rate Cuts and Investment Revival
- by Kim, Jin-Gu Sep 09, 2025 06:13am
- Will the long wait finally come to an end? With growing expectations that the U.S. Federal Reserve will lower its benchmark interest rate, optimism is rising that frozen investor sentiment could finally thaw. The Korean pharmaceutical and biotech sector, particularly bio-ventures with strained finances, has endured severe challenges. As external funding dried up in the wake of the COVID-19 endemic, many companies were forced to let go of researchers, sell off facilities and patents, and, in many cases, shut down entirely. Even as of September 2025, numerous firms remain on the brink of survival. Investment in actual biotech ventures peaked in 2021 and has sharply contracted since. According to the Korea Venture Capital Association, domestic venture investment in the bio-medical sector, which reached KRW 1.677 trillion in 2021, shrank to KRW 1.1058 trillion in 2022 and KRW 884.4 billion in 2023. Although it rebounded to KRW 1.0695 trillion last year, it remains at the 2019 level (KRW 1.1033 trillion). Analysts attribute this investment contraction to the prolonged period of high interest rates. The U.S. Federal Reserve's tightening stance has dampened the investment environment globally and across all industries, squeezing the lifeblood of biotech ventures with weak funding capabilities. However, the situation is shifting as strong signals for U.S. interest rate cuts emerge. Recent wobbles in U.S. economic indicators have bolstered financial market expectations that the Fed will lower its benchmark rate by 25-50 basis points this month. Major investment institutions, including Morgan Stanley, also strongly anticipate rate cuts within the year. Of course, a reduction in the U.S. Federal Reserve's benchmark rate does not immediately guarantee a flood of new investment capital into domestic pharmaceutical and biotech companies. A clear time lag is expected before the waves of the global macroeconomy reach Korea. Time is also needed for investor confidence to recover. Even if investment sentiment does recover, the likelihood of funds flowing into companies that have yet to prove their performance remains limited. Still, even a modest easing of funding pressures that have strangled biotech R&D would be highly meaningful. For ventures and mid-sized firms caught at the crossroads of survival, it may provide the breathing room needed to continue both research and operations. The darkest hour comes before the dawn. As signs of recovery emerge from an investment environment battered by high rates, an opportunity for renewed growth is approaching. The capabilities honed through enduring harsh times will fuel the upcoming leap. Pushing through just a little further now could turn past perseverance into tangible results. It is this reporter’s hope that the Korean pharmaceutical and biotech industry seizes this change as an opportunity to make a new leap forward.
- Opinion
- [Reporter's View] Approval-to-reimbursement takes only 6 mth
- by Lee, Hye-Kyung Sep 08, 2025 06:15am
- The Ministry of Food and Drug Safety (MFDS) has been operating the 'Global Innovative products on Fast Track (GIFT)' since 2022. GIFT is a 'Program Supporting the Expedited Review of Global Innovative Products' launched by the MFDS, aiming to quickly launch medicines for life-threatening diseases, such as cancer, and rare diseases, as well as those demonstrating innovativeness. It is intended to deliver these medicines to patients quickly. According to the MFDS, 55 items have been designated as GIFT over the past three years. Significant achievements have been made; for example, 39 items among these were approved. Notably, GIFT-designated products, which are treatments for severe and rare diseases, are a good fit for the 'concurrent approval-evaluation-negotiation pilot program' led by the Ministry of Health and Welfare since 2023 and are generating synergistic effects. The 'concurrent approval-evaluation-negotiation pilot program' is a system that supports expedited National Health Insurance listing by conducting MFDS product approval, Health Insurance Review & Assessment Service (HIRA) reimbursement evaluation, and National Health Insurance Service (NHIS) drug price negotiation in parallel. Previously, the process from approval to reimbursement took over 300 days: 120 days for MFDS approval, 150 days for HIRA evaluation, and 60 days for NHIS negotiation. This pilot program has shown that such procedure was cut by about half. Candidates for the pilot program must meet specific criteria, such as treatments for cancer or rare diseases with a life expectancy of less than one year, a small patient population, the absence of alternative treatments, and demonstrated superior efficacy with over two years of survival. As such, GIFT-designated products are the optimal candidates. All five products selected for the pilot program so far have been GIFT products: Recordati Korea's Qarziba (dinutuximab beta), Ipsen Korea's Bylvay (Odevixibat), Curocell's LimKato (anbasel), UCB's Fintepla (fenfluramine), and MSD's Winrevair (sotatercept). Currently, Qarziba, Bylvay, and Winrevair have received expedited approval. Qarziba, in particular, was reimbursed from December 1, 2024, completing the process from approval to drug pricing in just six months. In terms of results, both the GIFT program and the 'concurrent approval-evaluation-negotiation pilot program' are welcome developments for the industry and for improving patient access. However, even though the systems have been in operation for two to three years, their scope remains limited, and there are concerns for broader implementation. While the GIFT program has established a preferential drug pricing regulation for new drugs developed by innovative pharmaceutical companies, only five products (2.6%) that received expedited review under GIFT have been approved. The selection criteria for the 'concurrent approval-evaluation-negotiation pilot program' are also so stringent that it is difficult to select more products, even from the GIFT list. Although the government is aware of the need for expanded operation based on the systems' records, there is a perception that many issues still need to be resolved regarding staffing and inter-ministerial communication. As the necessity of these systems is proven by their results, there may be a need to focus on expanding the expedited review and 'concurrent approval-evaluation-negotiation pilot program.'
- Opinion
- [Reporter’s View] Be aware, be prepared
- by Eo, Yun-Ho Sep 03, 2025 06:10am
- Even if it seems premature, there is nothing wrong with being prepared. Following the Trump administration’s executive order on the Most-Favored-Nation (MFN) drug pricing policy, the deadline for major multinational pharmaceutical CEOs to submit their proposed drug price reduction plans is fast approaching—September 29. The MFN drug pricing policy seeks to adjust U.S. drug prices to match the lowest price among advanced countries. Initially, this standard was set to apply to Medicaid—health insurance for low-income patients—and gradually expand to Medicare, the public health insurance program. In short, U.S. drug prices will be aligned with the lowest prices found among developed nations. Experts warn that South Korea could become that benchmark country. Given the already heightened concern about “Korea passing,” this may further push multinational companies to avoid listing their drugs in Korea’s reimbursement system altogether. The U.S. pharmaceutical market is the largest in the world and accounts for nearly half of the global market share, which is more than 20 times than that of Korea’s. For multinational firms pursuing profit, Korea becomes a market they can easily abandon. The signs are already visible. Since Trump’s drug pricing policy was announced, some multinational pharmaceutical companies have withdrawn evaluation applications for new drug listings, while others have temporarily halted headquarters’ approval for such applications. Even products already listed have been affected: in one case, a company withdrew authorization, leading to deletion from the reimbursement list. It is time to revisit solutions that have long remained at the “proposal” stage, such as list price preserving mechanisms and structural improvements in expenditure. For drugs already listed, policymakers need to explore alternatives to continuous post-listing price cuts imposed through current pricing mechanisms. Admittedly, dual pricing is an inherently self-serving policy that undermines transparency. By concealing actual country-to-country pricing, it widens the ambiguity of drug costs. Yet, it is also an unavoidable choice for a government seeking to protect its own citizens. Within this dilemma, Korea must now make its own rational choice. There is a chance the scope of Trump’s “bomb” will shrink compared to its initial form. But it remains a possibility nonetheless—even if positive signals were received at the Korea–U.S. summit. Being aware and being prepared is essential.
- Opinion
- [Reporter's View] New opportunities have emerged for K-Bio
- by Son, Hyung Min Sep 01, 2025 06:04am
- In the global antibody-drug conjugate (ADC) market, the rapid rise of Chinese pharmaceutical companies is being noticed. Just five to six years ago, China was considered a 'technology follower.' However, with massive capital and swift clinical development, it has quickly become a key player in the global market. Chinese pharmaceutical companies are transforming the global landscape by establishing a comprehensive new drug development system, encompassing initial candidate discovery, clinical entry, late-stage trials, regulatory approval, and large-scale manufacturing. These companies are rapidly securing an increasing number of approvals in the US and Europe, while also inking major technology transfers with global pharmaceutical giants. The fact that Chinese companies can run their clinical and sales cycles on the strength of their domestic market alone is a point that Korean companies cannot easily match. With rapid clinical trials based on thousands of patient populations and strong policy support from regulatory authorities, China's 'volume offensive' is demonstrating immense power. In contrast, Korean ADC companies are exploring a different path. LigaChem Biosciences made major technology transfer deals with global pharmaceutical companies by developing a pipeline of over 20 candidates. Orum Therapeutics is accelerating its clinical development with a unique linker-payload technology. ABL Bio aims to expand into the ADC field based on its bispecific antibody platform, while IntoCell explores new ADC targets using its novel platform. In short, while China focuses on 'scale and speed,' Korea is emphasizing 'platform differentiation' with the global market in mind. This differentiated new drug development strategy is not just a competitive dynamic; it also opens up opportunities for collaboration. The production infrastructure and clinical networks of Chinese companies can serve as valuable resources for Korean firms. Indeed, some Korean companies are already trying to enter the market by partnering with Chinese Contract Research Organizations (CROs) to accelerate clinical trials or by forming strategic alliances with Chinese investors. Technology transfer also presents opportunities with Chinese pharmaceutical companies. For instance, LigaChem Biosciences transferred its technology to China's Fosun Pharma, and the HER2-targeted ADC from that deal is currently awaiting approval in China. However, collaboration with China doesn't come without risks. China's volume offensive can quickly drive down the price of a specific modality. With numerous antibodies, novel payloads, and diverse platforms entering the market simultaneously, competition is intensifying. From the perspective of global pharmaceutical companies, they will inevitably weigh the 'cost-effectiveness' of Korea versus China. If Korean companies' platform differentiation is not sufficiently proven, there is a significant risk that their technology will be viewed as a mere consumable commodity. Therefore, Korean companies' strategies must become more sophisticated. The companies need to secure differentiated data at each clinical stage, diversify partnerships with global pharmaceutical companies, and simultaneously manage a relationship of both 'competition' and 'collaboration' with China. Ultimately, how well they solidify their position in the US and European markets will determine the success or failure of the Korean ADC industry. China's rapid emergence in the pharmaceutical sector is both a threat and an opportunity for Korea. It has too much potential for collaboration to be dismissed as just a competitor, yet the risk of market encroachment is too significant to be viewed solely as a partner. The global challenge of the K-ADC will ultimately be judged by how it navigates this delicate balancing act. It is a critical time to clearly understand that even if Korea falls behind in a war of attrition and speed compared to China, there are still opportunities in platform differentiation and strategic partnerships.
- Opinion
- [Reporter's View] Innovativeness and trust in healthcare AI
- by Whang, byung-woo Aug 29, 2025 06:07am
- As the innovation of Artificial Intelligence (AI) is robustly developed in the healthcare sector, concerns related to both utilization and implementation are arising. In Korea, the cost required for AI utilization in medical institutions is considered the number one priority for discussion. Additionally, 'awareness' has also been brought to attention recently. In this context, Philips Korea recently launched the "Future Health Index 2025 Korea Report,' highlighting the issue of building 'trust.' According to the report, 86% of the healthcare professionals answered that healthcare AI will improve the medical field, whereas only 60% of the patients responded positively. This indicates a trust gap over 26%. For instance, answers such as 'AI enhances work efficiency' and 'patients still have concerns' suggest that there are conflicting responses. In this regard, the hospital cases presented by Dr. Kim Eun-kyung, Director of Yongin Severance Hospital at Yonsei University, are worth considering. Since its opening, Yongin Severance Hospital has advocated for an AI-based digital hospital. The use of AI in healthcare has shown promising results through various applications, including assisting with chest X-ray interpretation, tracking the movements of infected individuals, and enabling digital pathology and voice-recognized medical records. Notably, tracing contacts in just 10 minutes, a task that previously took half a day for infection control, truly demonstrates the value of AI. However, there is a recurring concern. "The irony of needing to hire more people to support a digital system that's supposed to be for people." This is because integrating AI into systems like EMRs (Electronic Medical Records) is a costly endeavor. There's also the administrative burden of obtaining patient consent repeatedly. Although there is a designation of Innovative Medical Technology group, its procedures and costs are often criticized for hindering progress. The fundamental issue lies in the regulatory framework. While healthcare professionals agree that AI is helpful, there's a lack of clarity regarding legal responsibility. The question of who is liable for a misdiagnosis made by AI has not been clearly defined. A report found that 74% of Korean healthcare professionals expressed concern about this issue. The key discussion surrounding AI ultimately narrows down to 'trust'. The core challenge is not just the technical performance of AI, but how regulations and systems can support it. This includes the implicit guarantee of government financial support. For patients, transparent explanations and safety nets are essential. Healthcare professionals require clear rules of liability and cost compensation, and companies need a sustainable policy. The speed of technology is already sufficient. Now, it's time for a framework that can institutionally support trust to follow suit. For innovation to be implemented, regulations must be able to keep up. It is essential to consider how to enable AI to fulfill its inherent role of providing efficiency and allowing for the reinvestment of human resources.
- Opinion
- [Reporter’s View] Addressing the Drug Shortage Issue
- by Kim JiEun Aug 28, 2025 06:09am
- With the bill that revises the Pharmaceutical Affairs Act, centered on simplifying generic substitution notifications, recently passing the NA Health and Welfare Committee's Legislative Subcommittee review, the Korean Medical Association readily voiced its opposition. This amendment primarily expands the scope of post-substitution notifications from pharmacies to include the information system operated by the Health Insurance Review and Assessment Service (HIRA). If passed, it is expected to provide the legal basis for implementing the simplified generic substitution notification enforcement rules under the Pharmaceutical Affairs Act, scheduled to take effect on February 2 next year. As soon as the amendment cleared the National Assembly's subcommittee hurdle, the KMA readily protested, calling it a harmful law that facilitates generic substitutions, and immediately demanded its withdrawal. The KMA used the term ‘arbitrary generic substitutions,’ arguing that implementing a related system would disregard physicians' prescribing authority. This reaction from doctors was not unexpected. Medical associations, including the KMA, have consistently opposed not only international nonproprietary name prescribing but also any systemic improvements related to simplifying generic substitutions. The reasons doctors have consistently cited for opposing the promotion of generic substitutions include threats to patient safety from pharmacist-initiated prescription changes, the undermining of doctors' prescribing authority, and the consequent collapse of the separation of prescribing and dispensing. Setting aside the claim that it would undermine physicians' prescribing authority, the argument that promoting generic substitution threatens patient safety and undermines the foundation of the separation of medical and pharmaceutical practices is difficult to accept. The drug supply issue has persisted for over five years since the spread of COVID-19. Even if the severity of the issue has lessened somewhat compared to the COVID period, unpredictable drug shortages continue to occur simultaneously and persistently. As a result, not only the pharmaceutical and distribution industries but also pharmacies are devoting a significant portion of their operations to securing drug inventories and managing supply. Had it not been for the efforts of frontline pharmacists to secure drug inventories during the severe COVID-era shortages, along with attempts at generic substitutions and patient understanding, the patients’ ‘pharmacy runaround’ – which might have otherwise been a temporary issue – could very well have escalated into a major societal problem threatening patient safety. Drug shortages and out-of-stock issues have persisted for years without effective countermeasures, yet the government has failed to present clear alternatives, and relevant legislation remains indefinitely stalled in the National Assembly. In this process, this reporter must ask: What voices have doctors, who emphasize maintaining prescription authority, raised for patient safety? What alternatives have they proposed? Claiming rights inevitably entails corresponding duties and responsibilities. To secure the authority to prescribe medications, there must also be a duty and responsibility to contribute to creating an environment where prescribed drugs can be delivered to patients without incident. Asserting rights without responsibility can only be perceived as an abuse of authority. The government must now focus its full efforts on establishing the institutional foundation to ensure that generic substitutions—which it has sought to promote, even introducing incentive systems—can truly become ‘activated,’ without being swayed by the claims of specific professions.
- Opinion
- [Reporter's View] Double standard against natural medicines
- by Kim, Jin-Gu Aug 22, 2025 06:06am
- The government announced the '4th New Natural Product Drug Development Promotion Plan' in May 2024. The plan outlines a joint effort by seven ministries, including the Ministry of Health and Welfare, the Ministry of Science and ICT, Ministry of Trade, Industry and Energy, Ministry of Environment, Ministry of Oceans and Fisheries, Rural Development Administration, and Korea Forest Service, to build a foundation for natural new drug R&D and promote its industrialization. To achieve this, the plan selected three strategies and six key tasks, and pledged support for customized consulting to enhance clinical success rates, as well as assistance for global expansion. The budget allocated for this was KRW 153 billion, a 2.7% increase from the previous year. However, in the reimbursement sector, the exact opposite policy is underway. A prime example is the ongoing discussion to delist the mugwort extract treatment for gastritis from reimbursement coverage. The government selected the mugwort extract as a target for the 2025 drug reimbursement appropriateness re-evaluation last year. In discussions held this year, the conclusion was that it 'lacks appropriateness for reimbursement.' While an objection procedure remains, the prevailing view, considering past precedents, is that a dramatic reversal of this decision is unlikely. On the one hand, the government is expanding the budget to industrially promote natural medicines, while on the other, it is reducing patient access due to a lack of clinical utility. This contradiction of simultaneously fostering industrial growth and removing a flagship product is seen as a decision that weakens the government's policy consistency. The problem of inconsistent policy is also evident in the differing results from two re-evaluations. The mugwort extract had already been recognized for its usefulness in a reimbursement re-evaluation conducted by health authorities 14 years ago. The Ministry of Health and Welfare reviewed the cost-effectiveness of five therapeutic categories, including cardiovascular and digestive ulcer drugs, as part of the 'Reorganization of the Listed Drugs List' in 2011. At that time, the usefulness of Stiren's 'gastritis treatment' indication was recognized. Conversely, its 'gastritis prevention' indication was questioned, and after a legal dispute over a delay in submitting clinical data, the conclusion was its removal from reimbursement. No issues were raised at the time regarding the usefulness of its gastritis treatment. This amounts to an opposite judgment being made on the same drug. This leaves questions about the consistency of policy not only in clinical settings but also from the perspective of pharmaceutical and biotech companies. A bigger problem is that this double standard has increased overall industry uncertainty and stifled research momentum. In the mid-2000s, major pharmaceutical and biotech companies maintained one or two natural medicine development pipelines; however, this is no longer happening. After Yungjin Pharmaceutical received approval for its atopic dermatitis treatment 'Yutoma' in 2012, no new natural medicines were produced in Korea for 13 years. Yutoma was never even launched due to cost issues, and its approval was canceled in 2022 for failing to submit re-evaluation data. In the same year, Chong Kun Dang received approval for its natural medicine 'G-Tec,' but it has not been launched due to delays in reimbursement listing. A field that was once highlighted as a national strategic project has been halted due to institutional contradictions. The controversy surrounding the mugwort extract extends beyond the survival of a few products and is directly linked to the trajectory of the Korean pharmaceutical and biotechnology industries. While past achievements cannot be uncritically praised, it would be a loss to dismiss the experience and assets accumulated in that process as an anachronistic product. Strengthening regulations to align with global standards is inevitable, but what is needed now is to correct this double standard. The contradiction of simultaneously promoting industrial growth and discussing delisting must be resolved. A balanced policy design that encompasses support for clinical research and commercialization, as well as quality standardization, should follow. Only then can natural medicines re-establish themselves as a competitive asset for the Korean pharmaceutical and bio-industry.
- Opinion
- [Desk View] Can NHI alone cover the costs of cancer drugs?
- by Lee, Tak-Sun Aug 20, 2025 06:23am
- The reimbursement claim amount submitted for anti-cancer drugs has been increasing robustly every year. According to the '2024 Pharmaceutical Reimbursement Claims Data' published by the Health Insurance Review & Assessment Service, drug expenditure for cancer diseases in 2024 amounted to KRW 4.1372 trillion, a 7.4% increase from KRW 3.8506 trillion in 2023. The rate of increase in cancer drug expenditures is steeper than the 4.5% increase for overall drug expenditures (KRW 26.9897 trillion). These data indicate that the costs of anti-cancer drugs are rising with the emergence of expensive drugs like immunotherapies and targeted therapies. The problem lies in what comes next. If the anti-cancer drugs currently awaiting reimbursement approval are approved, an additional KRW 2-3 trillion is expected to be added soon. The national health insurance, which is accumulating financial deficits, may no longer be able to cover these rising costs of anti-cancer drugs. Global pharmaceutical companies are increasingly combining new anti-cancer drugs or expanding investments in more expensive first-line treatments. As a result, cancer treatment is evolving. However, the latest high-cost anti-cancer drugs are waiting in a long queue for reimbursement, putting a burden on national health insurance finances. Some are suggesting that the 5% patient co-payment rate for anti-cancer drugs should be slightly increased. However, adjusting a patient's co-payment rate once it has been lowered is not an easy task. The government and politicians probably refrain from such a move, as it could cost them votes. For this reason, there is a growing argument that South Korea should also establish a separate fund for anti-cancer or rare disease drugs, similar to the UK, to save national health insurance finances and improve access to new drugs. However, the government does not seem to be acknowledging the seriousness of this issue yet. During the candidacy confirmation hearing, Jeong Eun Kyeong, Minister of Health and Welfare, expressed the view that expanding reimbursement coverage should be prioritized over creating a separate fund for patients with rare and severe diseases. The issue of national health insurance drug expenditures is not new, but the current instability differs from past patterns. In particular, merely adjusting the prices of drugs with expired patents, as in the past, has limited effectiveness in alleviating the financial pressure caused by the entry of high-cost drugs, such as innovative new anti-cancer drugs. It is also difficult for the government not to permit the entry of new, more effective anti-cancer drugs. The financial losses caused by these innovative anti-cancer drugs are, therefore, unavoidable. In this situation, it isn't easy to solve both financial stability and access to new drugs with past methods of drug cost reduction or reimbursement expansion. We hope that the new government realizes the seriousness of the cancer drug expenditure problem and prioritizes its policies.
- Opinion
- [Reporter's View] Innovation exists in treating all diseases
- by Eo, Yun-Ho Aug 20, 2025 06:23am
- When discussing Korea’s insurance reimbursement system, the qualifier “life-threatening” has long been a source of frustration. It is no exaggeration to say that, for the pharmaceutical industry, this phrase has been the number one target for removal since the very beginning. This was the case in determining eligibility for the Risk Sharing Agreement (RSA) and the exemption from pharmacoeconomic evaluation, and recently, even the preferential treatment for innovative drugs that allow the application of a flexible ICER threshold—another long-standing aspiration—has seen the phrase “life-threatening” implicitly applied in a different form. However, it is now necessary to question the very notion that a disease must be life-threatening to be considered serious. In particular, new drugs for chronic diseases, which are indirect causes of death for a large number of people due to comorbidities and complications, have long been left neglected in Korea’s reimbursement system. Although there are already many old drugs on the market and the number of new drugs being developed has decreased, the new drugs that represent a paradigm shift are being neglected. The breast cancer treatment Trodelvy was the first innovative drug to receive preferential treatment and ICER benefits, and was added to the reimbursement list in June. According to reports, the threshold for Trodelvy was set at KRW 70 million. This is an unprecedented amount. The Health Insurance Review and Assessment Service has stated that it does not use explicit thresholds, but it is well established that since the pharmacoeconomic evaluation system was first introduced in 2007 that the ICER threshold has been set at KRW 25 million for general drugs and KRW 50 million for anticancer drugs, based on the per capita GDP of KRW 25 million at the time, and has remained since for 18 years. In fact, according to HIRA's announcement last year, the ICER values for drugs submitted for pharmacoeconomic evaluation from 2019 to 2023 ranged from KRW 12.06 million to KRW 36.1 million for general drugs and KRW 25.88 million to KRW 47.92 million for anticancer drugs. This is why Trodelvy’s reimbursement listing is a significant milestone. However, such milestones should not become extremely rare cases. Providing benefits that cannot be applied in real life is meaningless. The criteria for receiving ICER benefits include three requirements, one of which states, “Significant clinical improvement must be recognized in final outcome measures such as extended survival.” Although the term “survival” implies “life-threatening,” it was not explicit. And in November last year, Kook-Hee Kim, Director of the Pharmaceutical Management Division at HIRA, said, “If innovativeness of a drug needs to be recognized in consideration of the severity of the disease and the social burden of the disease, the ICER threshold can be raised even if all three requirements are not met,” suggesting the possibility of flexible screening. In July, Minister Eun-kyung Jeong, who was appointed as the new Minister of Health and Welfare under President Jae-myung Lee’s administration, also mentioned the case of Trodelvy during her confirmation hearing in the National Assembly and expressed her agreement with the need for policy changes to recognize innovation. Under these circumstances, Mounjaro, which has been attracting public attention as a treatment for obesity, recently submitted a reimbursement application for its diabetes indication. While its weight-loss effect is well-known, Mounjaro's achievements in the diabetes field are also significant. Beyond blood sugar control targets, 6 out of 10 patients achieved normal blood sugar levels without an increased risk of hypoglycemia, reaching the ultimate treatment goals of preventing cardiovascular complications and reducing mortality. It even demonstrates the potential for “remission” in diabetes. However, assuming that the normal listing process is followed, it seems extremely unlikely that Mounjaro will be granted reimbursement for diabetes. As mentioned earlier, chronic diseases are already mainly treated with off-patent drugs. Given that these drugs are the comparators, it is difficult to predict a bright future for the entry of a new biopharmaceutical in the area. New drugs and drug prices are currently facing a critical turning point. Amidst the Trump administration's pressure on South Korea's drug pricing policy and the flood of high-priced drugs, concerns about “Korea passing” are growing, and future policy directions could have a significant impact on public health. With Korea already a foot into a super-aged society, it is crucial to make policy decisions from a long-term perspective to build a sustainable society capable of overcoming future health crises. We place our hopes in the Lee administration's pledge to “create a country where no one worries about illness.”
