One expands the post-notification method for generic substitution at pharmacies to include information systems operated by the Ministry of Health and Welfare and the Health Insurance Review and Assessment Service; the other expands the scope of essential medicines and elevates the legal basis for operating the Stable Supply Council from presidential decree to law.

The National Assembly's Legislation and Judiciary Committee has also passed an amendment to the National Health Insurance Act, which allows for the reduction of drug prices or the suspension of reimbursement for unfairly traded drugs when reverse payment agreements are detected.

These agreements involve originator and generic drug companies colluding to delay the launch of generics, thereby avoiding price reductions for the original drug.

Once these bills are passed in the plenary session, they will complete the necessary legislative process and take effect on the enforcement date stipulated in the addenda following government promulgation.

Bill to simplify the post-notification of generic substitution notifications#eB (Partial Amendment to the Pharmaceutical Affairs Act) establishes a new Article 27-2 (Establishment and Operation of a Substitution Information System) in the Pharmacuetical Affairs Act, enabling the MOHW to establish and operate an information system to support post-substitution notification.

Specifically, the bill allows the Minister of Health and Welfare to delegate this task to the Health Insurance Review and Assessment Service (HIRA), with the necessary details to be stipulated by MOHW ordinance.

The bill retains the existing obligation that when a pharmacist substitutes a drug listed on a prescription with an item recognized by the Ministry of Food and Drug Safety as having bioequivalence, the pharmacist must inform the patient of this fact and notify the prescribing physician or dentist within one day (or three days if unavoidable circumstances exist).

National Essential Medicines definition expansion bill(Partial Amendment to the Pharmaceutical Affairs Act) allows medicines without substitutes or facing supply instability to be designated as National Essential Medicines.

The basis for the composition and operation of the National Essential Medicines Stable Supply Council, previously established by Presidential Decree, has been elevated to the Pharmaceutical Affairs Act.

The chairmanship of the council was revised: instead of appointing a single Vice Minister of MFDS as chair, it now requires adding one ‘senior public official designated by the Minister of Health and Welfare of the MOHW’.

Generic drug collusion prohibition bill (Partial Amendment to the National Health Insurance Act) mandates that if the Fair Trade Commission detects collusive reverse payment agreements between originator and generic drug companies, the prices of the unfairly traded drugs must be reduced or their reimbursement suspended.

Specifically, it stipulates that cases violating Article 40(1) or Article 45(1) of the Monopoly Regulation and Fair Trade Act, where the violation was committed “for the purpose of increasing or maintaining the upper limit of drug reimbursement costs,” the insurance drug price can be reduced or reimbursement suspended.

When a reverse payment agreement violation is first detected, drug prices can be reduced by up to 20%.

If another reverse payment agreement is detected within five years of the price reduction, drug prices can be reduced by up to 40%.

If another illegal reverse payment agreement is detected within five years after the second price reduction, drug reimbursement can be suspended for up to one year.