Reinforced drug regulations change generic drug approvals

The number of generic drugs approved per bioequivalence tests falls drastically with reinforced regulations

No of drugs approved through bioequivalence tests reach 648 in 2021... 73% less than those compared to 2 years ago

No of approved generic drugs fall after drug pricing restructuring...number of consigned generic drugs fall drastically

The number of generic drugs approved per every bioequivalence test fell greatly.

 

Affected by the reform made in Korea's drug pricing policy, the proportion of generic drugs approved per bioequivalence test dropped significantly.

 

According to the Food & Drug Statistical Year Book published by the Ministry of Food and Drug Safety on the 6th, 648 items were approved after being recognized as bioequivalent to their alternative in 2021.

 

This was a 58.8% decrease from the 1,573 approved in 2020.

 

Compared to the 2,358 in 2019, this was a 72.5% decrease in 2 years.

 

Drugs recognized as bioequivalent are products recognized as being equivalent to their original drug, and are mostly granted for newly approved generic drugs.

 

No.

 

of bioequivalent items (left) and No.

 

of items approved per bioequivalence test (right) (Unit: items, Data: MFDS)

The drastic reduction in the number of bioequivalent drugs in 2021 is considered to have been directly influenced by the reform of the drug pricing system.

 

The main change that had been made with the reform of the drug pricing system that had been implemented in July 2020 was that only generic drugs that meet both requirements – those that directly perform bioequivalence tests and those that use registered APIs – are allowed to maintain a price level that is at 53.55% of the original drug price prior to patent expiry.

 

The reformed system also contained a stepped drug pricing system that lowers the price ceiling of drugs by order of listing and reducing the price of those that are listed later.

 

If 20 or more generic drugs are listed for a certain ingredient, the price ceiling set for the newly listed drugs afterward is set at 85% of the existing lowest price.

 

As companies cannot receive a high drug price without directly performing bioequivalence tests, this reduced the companies’ attempts to receive approval for generic drugs after consigning the whole manufacturing process.

 

Therefore, the number of generic drugs approved per bioequivalence tests has been reduced greatly.

 

Among the 648 bioequivalent drug items approved in 2021, 75 performed a direct bioequivalence test.

 

This roughly translates to 8.6 generics being approved for each test.

 

In 2019 and 2020, the number has been 29 and 9.4 drugs per bioequivalent test each.

 

The proportion of consigned generics among bioequivalent drug items reached 96.6% in 2019 but was reduced to 88.4% by 2021.

 

By year, the number of bioequivalent drug items increased exceptionally in 2019 and 2020.

 

The number, which had been 625 and 789, suddenly rose threefold in just a year to 2,358 in 2019.

 

This explosive increase is analyzed to be caused by the government's move to tighten regulations on generic drugs.

 

A total of 175 valsartan-containing hypertension drugs were suspended sales due to excess detection of impurities.

 

At the time, the Ministry of Health and Welfare and the Ministry of Food and Drug Safety prepared measures to inhibit the flooding of generic drugs by organizing a ‘Consultative Body to Improve the Generic Drug System.’ In response to the government’s move to reinforce regulations, pharmaceutical companies have worked to receive approval for their generic drugs in advance, which greatly increased the number of generic approvals for a short period of time.

 

In other words, the government’s work to reinforce regulations had caused an increase in generic approvals, and the level only returned to the previous level after the system reform.

 

As the regulations for the approval of generics have also been strengthened, the proportion of approved consigned generics is expected to be further reduced.

 

According to the amended Pharmaceutical Affairs Act, which took effect in July last year, the number of consigned generics that can be approved for each bioequivalence test has been limited to a maximum of three.

 

Therefore, the proportion of consigned generics among generic approvals will not be able to exceed 75%.