Basic refund type-drugs granted early RSA termination

The National Health Insurance Service (NHIS) finalizes the 'Guidelines for Drug Price Negotiations and Detailed matters'

If the renewal of the RSA agreement is unsuccessful, the timeframe for renegotiation will be shortened

The timeframe for drug price negotiations will be shortened to 30 days…'pre-negotiations' to be permitted

Only drugs categorized as a basic refund type are possible when a pharmaceutical company wishes to terminate the Risk Sharing Agreement (RSA) early.

 

However, pharmaceuticals on the cost-effectiveness evaluation waiver track, demonstrating cost-effectiveness, can be submitted for negotiation through the renewal of the agreement.

 

The National Health Insurance Service (NHIS) has finalized the 'Guidelines for Drug Price Negotiations and Detailed matters.' On the afternoon of December 19, the NHIS held a briefing session at the Korea Pharmaceutical and Bio-Pharma Manufacturers Association (KBPMA) to explain the revisions made to the 'Guidelines for Drug Price Negotiations' and the 'Guidelines for Drug Price Negotiations and Detailed matters.' The finalized revised guidelines include the changes reported to the Health Insurance Policy Review Committee meeting held in December 2024.

 

These changes are part of the 'Proposal to reflect the new drug's innovative value and the nation's healthcare security.' Health Insurance Review and Assessment Service (HIRA) included these updates in the 'Specific evaluation criteria of new drugs and medicines in consideration for negotiation' during revisions made in August and December.

 

Meanwhile, the Ministry of Health and Welfare (MOHW) incorporated these changes in the October administrative notice outlining partial revision to the drug reimbursement and adjustments criteria.

 

The NHIS has improved its policies to align with regulatory revisions.

 

The revised guidelines for drug price negotiations and detailed matters for RSA underwent consultation starting on November 28 and concluded on December 4.

 

On the afternoon of December 19, the NHIS held a briefing session at the Korea Pharmaceutical and Bio-Pharma Manufacturers Association (KBPMA) to explain the revisions made to the

Despite differing opinions from some associations, the revisions were finalized as initially proposed.

 

One association suggested that early termination should be allowed for all RSA types.

 

However, the final decision limited early termination to basic refund RSA type only.

 

Current policy states that companies can request early termination of an RSA, but under the revised guidelines, this will be limited to basic refund RSAs.

 

However, for cost-effectiveness-evaluated drugs that have demonstrated cost-effectiveness through the HIRA’s Drug Reimbursement Evaluation Committee (DREC) review, companies, and NHIS can renegotiate to adjust reimbursement ceilings, reset expected claim amounts, or modify·terminate total expenditure-capped RSAs.

 

This opens the possibility of terminating total expenditure-capped RSAs through renewal of agreement.

 

Additionally, one association suggested simplifying re-renewal processes for all RSA types but was rejected.

 

The revision will apply only to basic refund RSAs, as this approach aligns with existing HIRA regulations, which NHIS incorporated into its guidelines.

 

The negotiation period for RSA renewals following contract expiration will also be reduced.

 

If renewal or termination negotiations fail, the NHIS and the company can renegotiate once under the Minister of Health and Welfare’s directive.

 

The drug is removed from the reimbursement list if this second negotiation fails.

 

However, based on the revised guidelines, in case of a negotiation failure, the NHIS and the company will have 60 days for renegotiation under the directive of the Minister of Health and Welfare without any extensions.

 

If renegotiation fails, the drug will be removed from the reimbursement list.

 

"Currently, negotiations can take up to 300 days, which burdens the individuals involved," Oh Se-rim, head of the HIRA's Pharmaceutical Benefits Department, stated.

 

"The revised guidelines reduce this period to a maximum of 240 days." The updated proposal indicates that when applying for reimbursement listings of the same formulation under a RSA, the NHIS and associated organizations may mandate the applicant to sign a confidentiality agreement and provide details regarding the RSA associated with the drug.

 

The recent revision of pricing negotiation guidelines remains intact.

 

Updates include a 30-day timeframe for essential medicines.

 

Additionally, a new provision permits 'pre-negotiations' to occur during the evaluation period conducted by the HIRA.

 

The NHIS has already implemented this strategy in negotiations concerning drugs experiencing shortages, such as acetaminophen, after the COVID-19 endemic.