Only 1 of 10 CEOs ‘positive’ about drug regulations in KOR

Drug pricing system satisfaction rate at the ‘lowest’

New Year’s Pharmaceutical & Bio CEO Survey ① Perception of Government Regulations in Korea

Only 2 out of 53 CEOs 'positive' about government’s regulations... dissatisfaction over drug pricing and reimbursement at an ‘all high’

Satisfaction scores regarding regulations for approval, drug pricing, and sales are all less than 5 out of 10... Satisfaction score for drug pricing regulations is the ‘lowest’ at 3.15 points

2024 Pharma-Bio CEO Survey: Business strategies and perceptions on regulations in Korea

A survey showed only 1 in 10 CEOs of pharmaceutical companies were found to be satisfied with the Korean health authorities' regulatory policies for the pharmaceutical industry.

 

In all major regulatory areas such as approvals, drug pricing, and sales, the satisfaction rate of CEOs was more negative than positive towards the set regulations.

 

In particular, the CEOs expressed the least satisfaction with Korea’s drug pricing and reimbursement regulations.

 

According to a survey Dailypharm conducted on 53 CEOs of pharmaceutical companies on their perception of government regulations in Korea, only 8% of the respondents expressed positivity towards the government regulations made for the pharmaceutical industry in Korea.

 

Of the 53 CEOs surveyed, only two responded that they were "very positive" and "positive” towards the regulations each.

 

The proportion of respondents who showed a negative attitude towards government regulations (42% was more than 5 times higher than the proportion of respondents who expressed a positive attitude towards government regulations.

 

Those who expressed "very negative" and "negative" feelings toward the government regulations accounted for 8% and 34% of the respondents, respectively.

 

Around half of the respondents expressed a ‘moderate’ feeling towards government regulations.

 

Also, CEOs of pharmaceutical companies perceived that the government regulation was having a negative impact on their company’s business management.

 

Nearly half of the respondents (49%) said government regulations had a negative impact on their business.

 

"Very negative" and "negative" responses accounted for 9% and 40% of all responses, respectively.

 

Only 6% said government regulations had a positive impact on their company management.

 

In particular, the CEOs expressed the most dissatisfaction with the government’s drug pricing and reimbursement regulations.

 

When asked to name the most unreasonable regulation, 57% of the respondents cited reimbursement and drug pricing regulations.

 

This means that 3 out of 5 pharma CEOs perceive reimbursement and drug pricing regulations as the most unreasonable.

 

25% of respondents cited approval, production, and quality control regulations as the most unreasonable.

 

Only 11% said distribution, sales, and marketing regulations were the most unreasonable.

 

In terms of satisfaction for each type of regulation, the average satisfaction rate was in the 3-4 range for all categories.

 

In all 3 major categories of regulations – approval/production/quality control, drug pricing/payment, and distribution/sales/marketing – the scores were rated below 5.

 

To quantify the CEOs’ degree of satisfaction, respondents were asked to answer on a scale from 0 to 10.

 

A higher score indicated greater regulatory satisfaction.

 

Pharma CEOs were the least satisfied with drug pricing and reimbursement regulations.

 

When asked about their satisfaction with drug pricing and reimbursement regulations, they gave an average score of 3.15.

 

Only 2 respondents gave scores above 5 regarding satisfaction with Korea’s drug pricing and reimbursement regulations.

 

More than half (53%) of the CEOs gave satisfaction scores below 3 for Korea’s drug pricing and reimbursement regulations.

 

The most urgent area in need of improvement among drug pricing and reimbursement regulations was new drug listings, which 22% of the respondents had selected.

 

Companies expressed dissatisfaction over the disruptions they experience in their businesses from delayed listing or non-designation of an appropriate price for their new drugs after spending a long time and considerable expense on developing a new drug based on their R&D capabilities.

 

The next urgent area in need of improvement, which 18% of respondents selected, was improving the post-listing drug price cuts of generics.

 

This is due to the great deal of dissatisfaction that arose from last year's generic drug price reevaluations.

 

Last year, the government lowered the drug prices of more than 7,000 generic drugs through generic drug price reevaluations.

 

After the reform of the drug pricing system, which was implemented in July 2020, was applied to listed generic drugs, the prices of products that had not undergone bioequivalence tests were lowered in large quantities.

 

It is analyzed that pharmaceutical companies' dissatisfaction grew as the drug price cuts made on the products already in the market affected the companies’ performance.

 

More than 10% of the respondents said that it is urgent to reform the drug pricing system, by improving the reimbursement evaluation system, price-volume agreement system, external price referencing, and listing of generic and incrementally modified drugs.

 

The average satisfaction level of pharma CEOs gave for the approval, production, and quality control regulations was 4.00.

 

This is higher than the CEO’s satisfaction rate for drug pricing or reimbursement regulations, but there were still more complaints than compliments.

 

Only 4 of the 33 respondents rated their satisfaction level as 6 or higher.

 

9 out of 10 respondents had a negative stance in terms of satisfaction with Korea’s approval, production, and quality control regulations.

 

In terms of the area in need of the most urgent improvement among approval, manufacturing, and quality control regulations, an overwhelming majority of respondents (55%) pointed to the period of approval.

 

The companies saw that the development of new drugs and incrementally modified drugs were not leading to the prompt approval expected by the companies, and has negatively affected company business.

 

Clinical reevaluations and improved GMP regulations were the next top priorities, accounting for 15% and 12% of all CEO respondents, respectively.

 

On average, pharma CEOs rated their satisfaction with distribution, sales, and marketing regulations at 4.22.

 

This was higher than the satisfaction they expressed for approval, production, quality control, or drug pricing and reimbursement, but still more negative than positive.

 

The CEOs most frequently cited the regulation of CSOs (CSOs) as the area in need of most improvement among distribution, sales, and marketing regulation.

 

48% of respondents cited the need to regulate CSOs.

 

Recently, there has been an increase in companies using CSOs and reducing their own sales force, especially among small and medium-sized pharmaceutical companies.

 

There is a growing recognition of the need for strong regulations to regulate the CSOs' aggressive sales activities that can lead to overheated and confused market competition.

 

Among the distribution, sales, and marketing regulations, 33% of respondents said that advertising regulations should be improved.

 

There is a common perception that strict drug advertising regulations hinder companies' sales.