[Reporter's View] govt's foreign drug price comparisons

The pharmaceutical industry's concerns grow over the government's plan to reevaluate foreign drug price comparisons.

 

The government has established a policy to reduce domestic drug prices by comparing them to those in 'A8 countries (United States·Japan·Germany·France·Italy·Switzerland·Canada).' As the policy is set to be effective, the industry is busy estimating the scale of damage.

 

Companies are estimated to experience a 5-20% reduction in annual sales.

 

Therefore, the pharmaceutical industry voices concern that a sales reduction and an operational profit reduction will result in bigger damage.

 

There are concerns that the scale of damage this time will be more substantial than the recent reintroduction of a stepped pricing system and reimbursement appropriateness reassessment.

 

After considering the pharmaceutical industry's concern, the companies are not opposing to the reassessment soley due to the estimated damage.

 

The industry has criticized that the criteria for comparing South Korean prices to those of foreign countries as unfair.

 

For example, the industry considers referencing drug prices of Germany and Canada unfair.

 

The government announced that when referencing drug prices in Germany and Canada, their public reimbursement prices, excluding outpatient payment, will be used.

 

However, Korean drug prices include outpatient payments.

 

In other words, the drug prices of countries for comparison will be lower, resulting in a greater degree of drug price reduction.

 

For the past ten meetings since the end of last year, the pharmaceutical industry has strongly criticized the discrepancy in reassessing foreign drug price comparisons, including the issue mentioned earlier.

 

However, sources said the government hesitated to take the pharmaceutical industry's opinion.

 

Ten meetings between the government and the industry have concluded, and an agreement has yet to be reached.

 

After the tenth meeting officially concluded, the Ministry of Health and Welfare (MOHW)'s Director of Pharmaceutical Benefits, who is in charge of the agenda, was replaced.

 

In the second half of July, the MOHW held a regular personnel appointment and appointed a new Director of Pharmaceutical Benefits.

 

Consequently, the person in charge of the final implementation of reassessing foreign drug price comparison has changed.

 

The pharmaceutical industry has high hopes for these changes.

 

They hope that the new Director will consider the industry's submitted opinions.

 

At the last meeting, the industry had suggested several alternative measures.

 

Opinions included improving how the government references drug prices in Germany and Canada, reducing drug price reductions amount by 50%, and putting a ceiling cap on the percentage of drug price reduction.

 

It remains to be seen whether the new Director will consider these opinions.

 

The prevalent opinion in the industry is that the government must completely reconsider the plan for reassessing foreign drug price comparisons.

 

However, some are likely to follow the plan when unfairness is addressed.

 

Now, the government is left to decide.

 

The industry waits for appointment of the new Director.