[Reporter's view] Bothered by the PE exemption system

discontent grows on its role as a 'leeway' for drug reimbursement listings

The pharmacoeconomic evaluation exemption system is receiving much scrutiny.

 

Under the pretense of improving the system, there are growing voices in favor of reducing of the system, supporting its reduced and limited application.

 

These discussions reached culmination in a session titled, ‘On improving the pharmacoeconomic evaluation exemption system’ held during a symposium by the Korean Association of Health Technology Assessment (KAHTA).

 

At the symposium, Professor Sojeong Hwang from the Seoul National University Graduate School of Public Health gave a presentation titled 'Research on the improvement of the cost-effectiveness evaluation waiver system for drugs (current status and evaluation).’ The presentation covered various topics, including the history of cost-effectiveness evaluation-related systems and regulations, the evaluation status of drugs up to Sept.

 

2023, and the consequences of the system.

 

According to the presentation, the number of drugs that have been reimbursed via the PE exemption track has been increasing.

 

As of November, a total of 33 ingredients have received reimbursement via the PE exmption pathway.

 

Professor SeungJin Bae from the College of Pharmacy at Ewha Womans University presented opinions gathered from a Focus Group Interview (FGI) involving 29 participants, including pharmaceutical industry representatives, patient and civic organizations, government officials, policy experts, and clinical specialists.

 

The results of the FGI indicated that most stakeholders, except for pharmaceutical industry representatives, favored implementation of 'deferred cost-effectiveness evaluation' system, such as downscaling the cost-effectiveness evaluation waiver system and post-evaluation data submission, to strengthen management.

 

In other words, the growing cost and number of patients receiving the drugs exempt from subimtting PE results have increased financial burden.

 

Therefore, it may be necessary to consider measures to defer PE evaluations rather than merely reducing it or exempting certain drugs from conducting it completely.

 

The PE data waiver system, also known as the PE exemption system, is the only way for drugs that have difficulties presenting evidence on their cost-effectiveness but is necessary to receive reimbursement.

 

It has incorporated various fiscal control methods and ‘limited total cost’ design in place from the beginning.

 

In reality, the industry contends that the existing system already presents significant barriers, and that there has been a persistent call for its expansion.

 

Interestingly, the data presented at the symposium have shown that only six ingredients included in the PE exemptions were for orphan drugs.

 

The drugs that received PE exemptions were often intended for 'extremely rare diseases.' As a result, most stakeholders agreed that treatments for rare diseases, which are challenging to generate evidence for, should be included in the PE exemption system.

 

One key criterion for PE exemptions that the drug is used for 'life-threatening level of serious diseases.' However, most rare diseases, instead of being immediately life-threatening, are characterized by causing lifelong suffering, which makes it challenging to meet this exemption condition.

 

Only at the beginning of this year, efforts were made to address this limitation by expanding the waiver system to drugs proven to improve the quality of life, but this expansion was limited to pediatrics.

 

The ongoing discussions involve the flexible application of the ICER and the consideration of social benefits in economic evaluations.

 

Simultaneously, there is a growing list of high-priced new drugs with clinical data incomparable to existing treatments.

 

This situation has led to a slowdown in the pace of reimbursement listing in South Korea.

 

Among the 60 pharmaceuticals awaiting reimbursement listing after being designated as orphan drugs in Korea, 46% have already listed for reimbursement in at least five of the A8 countries.

 

The drugs that have been listed in all A8 countries were represented by four indredients.

 

One or more of those four indredients are currently under review by the Health Insurance Review and Assessment Service (HIRA).

 

However, despite being designated for extremely rare diseases, some of these indredients do not meet the standard for PE exemptions.

 

Maintaining a balance is crucial.

 

The government is already devising financial savings plans by implementing measures to lower drug prices, such as re-evaluating drug prices based on international standards and revising the volume-price contract.

 

Such improvement may be deemed necessary due to the increasing number of subject drugs under the system.

 

In fact, the PE exemption system does serve as a ‘breathing space’ within the reimbursement listing system in Korea.

 

If the authorities seek to narrow down this system, another breathing space should first be put in place.