[Reporter's View]Industry expectations rise with new changes

Industry expectations rise with the new changes made to the preferential treatment for innovative new drugs and RSA expansion measures

The criteria for innovative new drugs that are eligible for the flexible application of the ICER threshold and the measures for the expansion of the risk-sharing agreement (RSA) have been revealed.

 

As always, the industry expressed a mix of expectations and concerns.

 

The disclosed ‘Detailed evaluation criteria for new drugs etc.

 

subject to negotiations’ goes as follows.

 

Firstly, the requirements for ‘innovativeness’ to qualify for the flexible application of the ICER threshold were established.

 

A new drug is regarded as ‘innovative’ when it satisfies all of the following criteria: ▲ there is no substitutable or therapeutically equivalent product or treatment ▲ a significant clinical improvement, such as prolonged survival, is recognized in the final outcome, ▲ the new drug is approved by the MFDS under Article 35(4)(2) of the Pharmaceutical Affairs Act through expedited review or is recognized as equivalent by the committee.

 

The criteria are not very different from what was proposed in the ‘Preferential treatment measures for innovative new drugs’ that was first released last year.

 

The difference is that in that draft, the U.S.

 

FDA Breakthrough Therapy Designation (BTD) and the European EMA Priority Review (PRIME) were required, but this time, only the MFDS’s GIFT (Global Innovative products on Fast Track) designation is required.

 

This is certainly encouraging.

 

Of course, most truly innovative drugs receive BTD and PRIME designations.

 

However, the fact that only MFDS’s GIFT is required as a criterion is, in many ways, removing the hurdle for innovative new drug designations.

 

The most notable changes were made in the RSA eligibility criteria.

 

The amendment expands the scope of the second condition in the RSA criteria, which was ‘drugs eligible for special calculation or equivalent,’ to further specify the ‘or equivalent’ diseases.

 

The ‘or equivalent’ part was specified to severe diseases that do not qualify for the special calculation but are difficult to cure, irreversible disability or organ damage due to the progression of the disease, and hold a significant disease burden.

 

In addition, if the expected additional claim amount for refund-type RSA-type drugs is less than KRW 1.5 billion within the scope of the reimbursement standard expansion, the drug may omit Drug Reimbursement Evaluation Committee evaluations and conduct NHIS negotiations.

 

However, if the drug falls under the second RSA criteria, a new condition was added, stipulating that the expenditure cap must be applied even if it is not a pharmacologic evaluation exemption drug.

 

This raises the potential for a number of issues.

 

Firstly, the removal of the ambiguous phrase ‘special cases or equivalent’ is welcome.

 

The clinical criteria of irreversible disability and organ damage also seem to be specific enough.

 

However, it is unclear how many drugs will be eligible for less than KRW 1.5 billion additional claims criteria.

 

Simplifying the process of expanding the RSA reimbursement criteria has been long desired by the industry, the problem is that while there weren't many drugs that exceeded that 'total amount' in the past, things have changed as we've entered the era of high-priced drugs.

 

Furthermore, the criteria that set all drugs that fall under the second condition to be applied the expenditure cap RSA is a concern.

 

In fact, recently listed drugs are being contracted with combined type RSA that includes the expenditure cap type.

 

The problem is that while there weren't many drugs that exceeded that 'total expenditure cap’ in the past, things have changed as we've entered the era of high-priced drugs.

 

In this situation, it remains to be seen whether the unilateral application of the ‘expenditure cap’ for drugs falling under the second criteria will lead to smooth reimbursement listing.