"Will establish preferential pricing for drug R&D"

Re-evaluation of Foreign Drug Prices and the Reimbursement Appropriateness Re-evaluation to be reviewed

Minister of Health and Welfare Jeong Eun Kyeong "Domestic generic pricing is higher in Korea compared to overseas countries…drug pricing management is needed for optimal pharmaceutical reimbursement"

Rep. Nam In-soon·Rep. Lee Kai Ho·Rep. Suh Myeong-ok urge improvement to the drug pricing system to foster domestic pharmaceutical companies

Minister of Health and Welfare Jeong Eun Kyeong

Minister of Health and Welfare Jeong Eun Kyeong is drawing attention after stating, "It is necessary to reform the pharmaceutical company compensation system through a drug pricing system linked to R&D investment.

 

The Ministry will prepare measures to improve the drug pricing system." Minister Jeong also promised, "The Ministry will prepare multi-faceted support measures, including finance, tax, and human resources, for domestic pharmaceutical companies, including those designated as Innovative Pharmaceutical Companies." Regarding plans to reduce drug prices through the Re-evaluation of Foreign Drug Prices and the Reimbursement Appropriateness Re-evaluation, Minister Jeong acknowledged the following: the high level of domestic generic drug prices compared to major overseas countries, and the need for appropriate drug price management within limited National Health Insurance finances to ensure optimal drug coverage.

 

She responded, "The Ministry will review drug price management after consulting with citizen groups, patient organizations, the pharmaceutical industry, and academic societies to ensure fair management and acceptance." Minister Jeong made these statements on October 22 in response to written inquiries during the parliamentary inspection from Democratic Party Representatives Nam In-soon and Lee Kai Ho, and People Power Party Representative Suh Myeong-ok.

 

Rep.

 

Nam and Rep.

 

Suh pointed out the necessity of drug price incentives to encourage domestic pharmaceutical companies' New Drug R&D investment.

 

The Ministry of Health and Welfare stated that the pharmaceutical and bio-industry is a national strategic industry and that national-level investment expansion is needed for it to become the next growth engine.

 

In particular, the Ministry agreed on the need to reform the drug pricing system and compensation structure to strengthen the reward for the innovative value of new drugs and incentivize R&D investment, aiming to foster pharmaceutical companies with global new drug development capabilities.

 

Minister Jeong stated, "We will prepare drug pricing system improvement measures after gathering opinions from industry experts and academic societies." She added, "We will comprehensively review the sound growth of the pharmaceutical and bio-industry and the sustainability of National Health Insurance finances by closely examining the status of domestic and foreign drug pricing systems, policy improvement areas, and global trade situations, while considering social acceptance." Regarding plans to foster domestic pharmaceutical and biotech companies, Minister Jeong explained, "The government has established three core tasks to achieve the vision of making Korea a global top 5 nation in the K-BIO and Pharmaceutical sector," and added, "We will shift to consumer-oriented regulations, accelerate innovative growth by linking technology, human resources, and capital, and support the co-growth of anchor and biotech companies to strengthen global competitiveness." Minister Jeong further stated, "We plan to establish detailed implementation plans for each task through consultation with relevant ministries and will execute follow-up measures without fail, reviewing opinions gathered from forums," and added, "We will improve the Innovative Pharmaceutical Company Designation System to reflect changes in the industry ecosystem.

 

We will support the strengthening of domestic companies' competitiveness through field-centered workforce training and support programs for attracting overseas talent." Regarding the push for the Re-evaluation of Foreign Drug Prices and the Reimbursement Appropriateness Re-evaluation, Minister Jeong gave a principled answer, stating that the Ministry will consider industry opinions during the review process.

 

Minister Jeong said, "Drug expenditure in Korea continues to increase due to the growing number of elderly and chronic disease patients." She added, "Domestic generic drug prices are high compared to major overseas countries.

 

We will reasonably manage drug prices after listing by gathering feedback from the field, including the pharmaceutical industry." She concluded, "The Ministry is currently conducting the reimbursement appropriateness evaluation for eight APIs this year," and added, "We are preparing a fairer and systematic implementation plan based on the results of the five-year re-evaluation effort.

 

We will review it after sufficient consultation to ensure social acceptance."