'Choline alfoscerate' prescription market continues to grow

Rebounded from the decline since Q3 of last year…third-largest size in history

Prescription market for 'choline alfoscerate' in Q3 is worth KRW 155.3 billion…up 3% YoY

More companies exit clinical re-evaluations…prescription market continues to grow

The cognitive enhancer 'choline alfoscerate (choline products)' has expanded its presence in the prescription market.

 

Choline products' growth slowed earlier this year but rebounded in Q3, further expanding the market size.

 

Although a few companies withdrew from the market due to the risk of failing clinical re-evaluation, the prescription market continued sales boom.

 

According to the pharmaceutical market research firm UBIST on November 11, the outpatient prescription market for choline products totaled KRW 155.3 billion in Q3.

 

It decreased by 0.9% compared to Q3 of last year but increased by 3.0% compared to the previous quarter.

 

Choline products' prescription sales recorded KRW 158.1 billion in Q2 of 2023.

 

Then they went on a downward slide for three consecutive quarters until Q1 this year.

 

In Q2, the sales slightly increased compared to the previous quarter.

 

In Q3, they showed a strong rebound.

 

Choline products' prescription size for Q3 was recorded as the third highest in history.

 

The slowing growth of choline products in the first half of this year is likely due to steep growth in the past few years.

 

The prescription market for choline products recorded KRW 308.8 billion in 2018.

 

Then, it continued to renew the best record every year.

 

Last year, the market amounted to KRW 622.6 billion, expanding more than twice in five years.

 

Quarterly prescription sales indicate a 46.4% increase over five years from KRW 106.1 billion in Q3 of 2019.

 

Outpatient prescription sales of pharmaceuticals containing choline alfoscerate (unit: KRW 100 million, source: UBIST).

Even though choline products are under clinical re-evaluation for efficacy evaluation, clinical practices have continued to have a high demand for choline products.

 

In June 2020, the Ministry of Food and Drug Safety (MFDS) requested companies with choline products to submit their clinical trial documents, and 57 pharmaceutical companies began clinical trials for reassessment.

 

Previously, three indications for choline products had been approved, including ▲secondary symptoms caused by cerebrovascular deficit or degenerative organic brain syndrome ▲emotional and behavioral changes ▲senile pseudodementia.

 

In the re-evaluation process, two out of three indications for choline products were deleted, excluding 'secondary symptoms caused by cerebrovascular deficit or degenerative organic brain syndrome.' Choline products are facing the possibility of reduced reimbursement in addition to the issue of their efficacy.

 

In August 2022, the MOHW issued revised regulations on 'The Criteria and Scope of National Health Insurance,' indicating that patients without prior dementia diagnosis will have a copayment increased from 30% to 80%.

 

After that, two groups of pharmaceutical companies, led by Daewoong Bio and Chong Kun Dang, filed an administrative suit to cancel the MOHW's notification.

 

However, they all lost in the first trial in 2022.

 

Chong Kun Dang also lost in the second trial in May.

 

However, as the suspension of execution filed by pharmaceutical companies has been accepted, reimbursement reductions are on hold.

 

Despite many products being withdrawn from the market after the clinical re-evaluation of choline products, the prescription market continued to grow.

 

According to the MFDS, choline products that received Korean approval total 278 items.

 

Among these, 134 items have been withdrawn from the market due to approval withdrawal or cancelation.

 

Previously, the MFDS ordered the clinical re-evaluation of choline products from 134 companies.

 

77 companies withdrew from undergoing re-evaluation, resulting in a significant number of withdrawals from the market.

 

More companies that commenced clinical re-evaluation of choline products are withdrawing.

 

In two months from September, Guju Pharmaceutical, Kyongbo Pharmaceutical, PharmGen Science, YooYoung Pharmaceutical, and Medix Pharm voluntarily withdrew choline product approval.

 

Increasing number of companies are exiting the market due to potential retrieval amounts that arise when they fail the re-evaluation for choline products.

 

In 2020, the MOHW issued a national health insurance contract to companies with choline products, entailing 'companies failing clinical trials must return the prescription sales.' Within eight months of the negotiation order, pharmaceutical companies agreed to the term that they would return 20% of the prescription sales from the time they received IND approval to the date of deletion when the indication for the product was deleted due to failed clinical re-evaluation.

 

The retrieval negotiations for choline products are determined by agreements between the MOHW and each pharmaceutical company, resulting in different contract details for each company.

 

While a 20% retrieval rate from prescription sales is commonly applied, the timing of the retrieval rate varies among companies.

 

Sources said that most companies have agreed to increase retrieval rate.

 

For instance, companies may have agreed to set a 10% retrieval rate for this year when they fail the clinical re-evaluation of choline products, then increase to 30% after five years.

 

As the prescription market for choline products continues to grow, companies that agreed to a gradual increase of retrieval rate would end up exponentially expanding retrieval amount due to the market growth.

 

Pharmaceutical companies may have to face increased retrieval amounts as the market for choline products continues to grow if they fail clinical re-evaluation.

 

For these reasons, sources said that more companies are considering exiting the market before completing the clinical re-evaluation.

 

However, analysis suggests that the entire market for choline products continues to grow as other products replace the withdrawn products.

 

Prescription sales by major products indicate that Daewoong Bio's Gliatamin recorded KRW 41.2 billion in Q3, a 4.4% reduction from the previous year.

 

Chong Kun Dang's Chongkundang Gliatirin generated prescription sales of KRW 31.1 billion in Q3, up 10.9% from last year.

 

Arlico's Choliatin recorded prescription sales of KRW 5.1 billion in Q3, a 28.7% reduction from the previous year.

 

Daewon Pharmaceutical's Alfocholine generated prescription sales of KRW 4.9 billion in Q3, down 10.3%.

 

Yuhan's Alfoatilin recorded KRW 3.7 billion, down 16.7% from the previous year.

 

Dongkoo Bio's Glifos' sales increased from KRW 2.7 billion in Q3 of last year to KRW 3.7 billion in a year, up 33.9%.

 

Mother's Pharm's Memoem recorded prescription sales at KRW 1.1 billion in Q3 of last year, then increased to KRW 3.3 billion in a year, an increase of over threefold.