Possibility of passing the drug price reduction Act

Rising pharmaceutical crisis

Violation of the constitutional right to appeal

A sense of crisis in the biopharmaceutical industry is rising as the possibility of passing the 'drug price reduction/refund bill' in the plenary session of the National Assembly is increasing.

 

The pharmaceutical industry is concerned that the amendment will infringe on the right to request a trial as stipulated in the Constitution, and furthermore, it will damage the domestic pharmaceutical and bio-industry as a whole.

 

According to the pharmaceutical industry on the 16th, the revision of the National Health Insurance Act, the so-called Drug Price Reduction and Refund Act, proposed by Rep.

 

Kim Won-i and Nam In-soon, respectively, will be decided at the National Assembly plenary session this month at the earliest.

 

According to this amendment, if a pharmaceutical company loses a lawsuit on drug price cuts, it must discharge the health insurance finances invested during the drug price cut suspension period.

 

In the opposite case, the amended bill also contains content that allows the NHIS to refund the damages incurred by the pharmaceutical company during the course of the lawsuit if the pharmaceutical company wins the primary case.

 

However, in the pharmaceutical industry, the position is that in the case of 'refund', it does not fall under the requirements for citation for suspension of execution.

 

In the current legal system, suspension of execution is cited when there is a 'concern about serious and irreparable damage'.

 

However, in the case of a refund, it is argued that these requirements are not met.

 

As a result, concerns are raised that the enforcement of the law will be biased toward the recovery among refunds and refunds, which will violate the right to request a trial specified in the Constitution and worsen the remedy of rights.

 

There are concerns that companies' attempts to suspend the execution of the government's drug price cuts will significantly shrink.

 

In the pharmaceutical industry, it is the position that the economic gains and losses caused by the difference between the decision to suspend execution and the judgment on the merits should be remedied according to the existing procedures, such as claims for damages between companies or parties.

 

It is also criticized that it is not right in the legal system for the state to consider unfair gains and return them after the fact, and that excessive infringement of property rights is unconstitutional.

 

Furthermore, the pharmaceutical industry is concerned that if this amendment is passed, it will deal a blow to the domestic pharmaceutical bio-industry as a whole.

 

In fact, in past cases of suspension of execution citations, three-fourths of the total number of citations are for domestic pharmaceutical companies.

 

The expected surcharge upon redemption of these is estimated at 490 billion won.

 

This is eight times higher than multinational pharmaceutical companies' 59 billion won.

 

In particular, the pharmaceutical industry is criticizing that legal disputes over drug price reduction, which is a legitimate right of companies, will shrink in a situation where government re-evaluation mechanisms such as re-evaluation of already-listed drugs, re-evaluation of benefit adequacy, and re-evaluation of overseas drug prices are expected to continue in the future.

 

It is expected that the Drug Price Reduction Act will discourage domestic pharmaceutical companies from challenging patents and thereby worsen the positive function of reducing health insurance finances.

 

This is because if the original company finally wins the lawsuit and the NHIS refunds the pharmaceutical company the loss caused by the drug price cut, the NHIS can claim the right of indemnity from the generic company that participated in the patent lawsuit.

 

The pharmaceutical industry was concerned that the amendment would undermine generic companies' willingness to challenge patents and hinder active patent challenges.

 

As a result, there are concerns that the opportunity for financial savings due to the release of generics will be lost.