The guidelines for PVA will be revised soon

The NHIS is expected to consult the pharmaceutical industry for opinions regarding guideline revision

Products subject to price reduction will likely receive a 30-50% reduction

The National Health Insurance Service (NHIS) is likely to seek opinions from the pharmaceutical industry soon to revise the operational guidelines on the price-volume agreement (PVA) program.

 

The revised guidelines draw attention as they include an agenda for easing on products that have reduced their prices more than three times in five years, as announced last year.

 

According to industry experts, on the 14th, the NHIS plans to revise the PVA negotiation’s operational guidelines, including an agenda announced last December regarding easing the PVA for innovative new drugs.

 

The pharmaceutical industry expects the NHIS to conclude revising the guidelines before the type ‘Da’ monitoring starts in April.

 

Therefore, the NHIS will likely consult with pharmaceutical organizations, including the Korea Pharmaceutical and Bio-Pharma Manufacturers Association (KPBMA), for their opinions.

 

What is most interesting is the agenda focusing on easing regulations for products that have reduced their prices more than three times.

 

On December 22nd, the Biohealth Innovation Committee, chaired by the Prime Minister, released a report stating that pharmaceuticals produced by companies that have received an innovative designation or meet the standards will be eligible for an adjusted rate of price reduction on the third round.

 

For instance, drugs that have already undergone two rounds of price reduction through PVA negotiations will receive a reduced rate of price reduction this year.

 

Products undergoing the fourth and fifth rounds of price reductions will be subject to a lower rate of reduction.

 

Upon completion of the revision guidelines this year, many products are expected to receive benefits.

 

The industry anticipates that the rate of price reduction will fall between 30-50%.

 

If the set reduced price is 1,000 won, then 300 won to 500 won may be deducted.

 

However, the final revision measures will be determined following discussions among departments including the Ministry of Health and Welfare (MOHW).

 

According to research conducted in 2022 on the evaluation of achievements and improvement measures of the PVA program, 26 products with the same ingredient have repeatedly undergone price reductions more than three times in 10 years.

 

Among these products, nine from Korean pharmaceutical companies and 17 from multinational pharmaceutical companies have experienced price reductions more than three times.

 

As a result, adjustments are expected to lead to lower reduction rates for many products.

 

The revised guidelines are expected to include differential application of reductions based on claim amounts.

 

Higher reduction rates will likely be applied to higher claim amounts, with 30 billion won as a reference amount.

 

Also, exclusion criteria will likely be updated to include measures that raise the claim amounts to 3 billion won, up from the current claim amount of less than 2 billion won.

 

Furthermore, the guidelines may contain measures for products with temporary increases in volume due to infectious diseases and drug shortages, allowing for a reduction rate or refund.

 

However, the plan to increase the maximum reduction rate from the current 10% to 15% will be reflected through future revisions.