‘Will promote phased implementation of INN prescriptions’

Expects up to KRW 9 trillion annual savings

KPA holds policy forum on introducing a Korean-style INN prescription model in the National Assembly

Research Director Dae-Jin Kim presents a proposal for the phased implementation of the system

“High public acceptance… expected to expand patient choice and save insurance expenditure”

Research Director Dae-Jin Kim, Korea Institute for Pharmaceutical Policy Affairs

A study has shown that introducing an International Nonproprietary Name (INN) prescription system could save up to KRW 9 trillion annually in drug costs and related social expenses.

 

At a policy forum on INN prescriptions held at the National Assembly on the 30th, Dae-jin Kim, Director of the Korea Institute for Pharmaceutical Policy Affairs (KIPPA), gave a presentation on “Plans for Introducing a Korean INN Prescription Model.” The forum was hosted by National Assembly members In-soon Nam, Young-seok Seo, Jong-tae Jang, Yoon Kim (Democratic Party of Korea), and Sun-min Kim (Rebuilding Korea Party), and organized by the Korean Pharmaceutical Association and KIPPA.

 

Director Kim first pointed out that the excessive number of generic drug items in the domestic pharmaceutical market is increasing management costs and leading to waste in the National Health Insurance finances.

 

As of January this year, 27.7% of all items had 61 or more products containing the same active ingredient.

 

This directly leads to costs associated with stockouts, unused inventory, recalls, and disposal.

 

He also criticized the structure where a non-differentiated generic industry is being sustained by health insurance finances.

 

He further argued that the high proportion of expensive generics limits cost-saving effects, while the fact that most generic products are marketed under brand names reduces patients’ awareness of the active ingredient, creating communication difficulties between patients and healthcare professionals.

 

This, in turn, heightens concerns about patient safety incidents.

 

Criticism was also raised regarding restrictions on patient choice.

 

Director Kim stated that the low generic substitution rate limits patients' opportunities to choose among medicines with the same ingredients and equivalent effects.

 

Director Kim also presented the results of a survey on public awareness of INN prescribing.

 

In this survey of 3,000 adult men and women residing in Korea, 18.3% reported experiencing drug shortages in the past year.

 

Furthermore, in a survey on acceptance of the INN prescription system, 83.8% of respondents gave positive responses.

 

Based on this domestic pharmaceutical situation and public perception, Director Kim proposed a Korean-style INN prescription model.

 

He explained that its fundamental purpose is ‘to reduce national medical expenses and health insurance premiums while strengthening patient safety and rights’.

 

Director Kim clarified that the definition of INN prescribing in this study refers to prescriptions that list only the ‘active ingredient code + INN + dosage form + strength’ without mentioning brand names.

 

The application targets will be implemented in phases: Phase 1 covers ▲ingredient groups with unstable supply ▲ingredient groups frequently substituted during dispensing ▲the top 100 ingredient groups by claim volume.

 

Phase 2 expands to 5 major efficacy groups (gastrointestinal, diabetes, hypertension, hyperlipidemia drugs, antibiotics, etc.), and Phase 3 extends to all pharmaceuticals.

 

Prerequisites for the system were also outlined: ▲ Reducing domestic drug prices for identical ingredient groups to below the average price of overseas A8 countries ▲ Operating a National Health Insurance Service-recommended drug list and introducing differential co-insurance policies ▲ Improving the coninsurance system.

 

Based on the research findings, Director Kim estimated the maximum annual economic effect of introducing this INN prescription system model at KRW 9.3641 trillion.

 

This figure combines savings of KRW 7.9 trillion in drug costs and KRW 1.4741 trillion in reduced social costs.

 

Director Kim stated, “It is necessary to prioritize applying this system to drug groups with high social demand and cost-effectiveness, then gradually expand the system thereafter.

 

Above all, ensuring patients' right to know and their choice of medication is crucial.

 

Measures to enhance patient access to information, such as utilizing mobile applications or electronic medication guides, can be considered.” He continued, “If fiscal efficiency measures like drug price reductions, differential copayments, and promoting generic competition are implemented alongside the system, they can contribute to reducing national health insurance expenditures.

 

The INN prescription system, implemented in a Korean-style format, will be the core alternative.

 

It strengthens patient safety and rights, reduces national medical expenses and health insurance premiums, and simultaneously addresses chronic issues in the domestic pharmaceutical market, such as the use of high-priced generics and excessive product variety.”

Meanwhile, before the forum, the hosting lawmakers In-soon Nam, Young-seok Seo, and Jong-tae Jang each made remarks on the purpose and necessity of introducing the system.

 

Rep.

 

In-soon Nam said, “Public interest in INN prescriptions has grown since the COVID-19 pandemic prompted drug supply instability.

 

I believe the introduction of INN prescriptions can be discussed not only as an alternative at the production and distribution stages related to supply instability issues, but also as an alternative at the prescription stage.

 

Rep.

 

Young-seok Seo said, “We must strive to ensure the system is implemented, considering whether it is necessary for the public and whether it should be introduced to improve the healthcare system.

 

Given the current state of the global pharmaceutical market, supply instability is likely to worsen in the future.

 

INN prescribing is expected to become a tool ensuring a stable drug supply and delivery to patients.

 

I hope the pharmacy community can effectively persuade the public of this.” Korean Pharmaceutical Association President Young-hee Kwon emphasized, “INN prescriptions allow patients to know the ingredients of their medications and make rational choices, thus ensuring their right to choose and realizing the right to health.

 

At the national level, it is also an alternative to reduce health insurance expenditure, secure sustainability, and expand coverage.

 

From the perspective of public health and socioeconomics, it is an essential system demanded by the times.”