"Why are pharma developing salt changes called innovative?"

Professor Yong Jin Kwon calls for a major shift in perspective among domestic pharmaceutical companies in Korea, the MOHW, and the NHIS

"The industry can only advance if funds are given to 'true' pharmaceutical companies developing super-innovative new drugs"

Professor suggests introducing a dual pricing system so that domestic new drugs can command high prices when exported to foreign market

Professor Yong Jin Kwon

"There are no developed countries that provide public funds and National Health Insurance resources to pharmaceutical companies for simply changing salt formation.

 

South Korea is the only country in the world that recognizes incrementally modified drugs as having the value of innovative new drugs.

 

(If we want to call incrementally modified drugs innovative new drugs), The government should establish the concept of a super-innovative new drug and allocate funds to companies that develop truly innovative treatments.

 

The National Health Insurance authorities shouldn't be worrying about Korean pharmaceutical companies; they should be preparing to spend hundreds of millions, or billions, of KRW from the NHI budget when a genuine domestic innovative treatment is developed." Criticism calls for a major shift in perspective among domestic pharmaceutical companies in Korea, the Ministry of Health and Welfare (MOHW), and the National Health Insurance Service (NHIS) to foster the Korean pharmaceutical industry and develop new domestic drugs into global blockbusters.

 

The argument is that to produce domestic new drugs that meet the standards of the global market, the NHI authorities must establish an environment that invests limited national budgets and NHI funds into genuine new drugs, rather than salt-changed, incrementally modified drugs.

 

Pharmaceutical companies must step up their investments in New Drug Research and Development (R&D).

 

Immediately after the parliamentary forum, held on September 26, on improving NHI financial management, Professor Yong Jin Kwon of the Public Healthcare Center at Seoul National University Hospital met with DailyPharm and sharply criticized the government's new drug administration and the R&D direction of domestic pharmaceutical companies.

 

Professor Kwon asserted that the current innovative new drug support policy of the Korean government is fundamentally flawed.

 

He pointed out that Korea is the only country in the world to support these efforts with national budgets and NHI funds, recognizing the value of incrementally modified drugs based on salt changes.

 

Professor Kwon emphasized that the Korean pharmaceutical industry must deeply reflect on the fact that it has grown significantly over the past 25 years, driven mainly by public health insurance premiums, yet failed to produce innovative new drugs during that period.

 

"I believe that the presidential pledge for a drug price premium based on innovative new drug value is someone's lobbying work," Professor Kwon stated.

 

"We need to have a conversation with the public about whether there is any developed country that gives NHI funds to companies that just change salt formation.

 

I don't think (the domestic pharmaceutical industry) should be operating this way." He further pointed out, "Twenty-five years ago, when the National Health Insurance Act was introduced and the separation of prescribing and dispensing was implemented, domestic pharmaceutical companies made enormous net profits, eliminating all their debt until generic prices were cut in 2013." He criticized, "That's why structural reform of the pharmaceutical industry failed.

 

There are no studies on how much of the R&D funding provided to pharmaceutical companies, which includes high generic drug prices paid by the public and government support from the MFDS, actually led to tangible results, and no one is looking into it." Professor Kwon said, "The R&D support budget for pharmaceutical companies is public tax money and insurance premiums.

 

So, how much has the domestic pharmaceutical industry truly developed over the past 25 years?" He added, "We need to evaluate this before talking about developing the pharmaceutical industry.

 

The NHIS shouldn't be worrying about domestic pharmaceutical companies.

 

The NHIS should be pushing them to create proper rare disease drugs (new drugs)." Professor Kwon also proposed improving the financial soundness of the NHI by rationalizing the prices of generic drugs.

 

It is to lower generic drug prices to an appropriate level relative to the original price and use the saved resources to support and expand investment in innovative drug development.

 

Specifically, Professor Kwon suggested unilaterally reducing generic drug prices, which currently account for 53.55% of the original drug price, to a level of 30% to 40%, and mitigating the market shock through phased adjustments.

 

It is believed that this redistribution of NHI finances could expand investment in innovative new drugs by two to three times without increasing the total medical expenditure.

 

Professor Kwon said, "I strongly disagree with the NHIS's remark that we should reconsider the structural reform (reduction) of generic drug prices.

 

The NHIS is the public's agent.

 

If they look into where the public's NHI money has been wasted, I absolutely want to tell them that this is not the time to worry about domestic pharmaceutical companies," he asserted.

 

"The Korean government and pharmaceutical companies must raise the competitiveness of the domestic pharmaceutical industry and be prepared to spend hundreds of millions, or billions, of KRW from the NHI budget when an innovative new drug is developed." Finally, Professor Kwon said, "How long will we continue to out-license all our new drug candidates and then have to slash prices when we bring them back from overseas markets?

 

We are a developed country now." He added, "(The government) should improve the system by modifying the current actual transaction price reimbursement system and introducing a dual pricing system so that our new drugs can command high prices when exported to foreign markets."