Will Godex overcome its reimb crisis at half price?

Will the 'half-price' strategy allow the company to overcome its reimbursement cancellation crisis for Godex?

May work to increase sales after making a voluntary price cut from ₩371 to ₩144

Single-agent drug Nissel that contains the same API priced at ₩144, and two-drug combination drug Pennel at ₩312

Celltrion Pharm’s Godex cap, which was not recognized for its reimbursement adequacy and rejected reimbursement by the Health Insurance Review and Assessment Service’s Drug Reimbursement Evaluation Committee on the 7th, is drawing attention due to the possibility of receiving a reimbursement cut rather than a reimbursement deletion decision.

 

The reason why this speculation is gaining strength is that other drugs that contain the same main active ingredient as Godex - biphenyl dimethyl dicarboxylate (BDD)- such as Pharma King’s Nissel Tab and its 2-drug combo Pennel Cap (BDD+garlic oil) are still listed and recognized for reimbursement in Korea.

 

Also, the current drug pricing regulations are based around a phased price reduction system that cuts the price of original drugs with the entry of generics, forcing reimbursement deletions or cuts after reevaluations with no other follow-ons in the market may be considered somewhat irrational.

 

Therefore, the industry speculation is that Celltrion Pharm will overcome the current situation using a voluntary drug price cut, which would reduce the price of Godex to the level set for single and two-drug combo agents as its negotiation card during the objection period after demonstrating Godex’s efficacy and effect through literature and clinical data.

 

Godex, a combination drug that contains BBD and 6 other ingredients, is currently listed at ₩371.

 

The two-drug combo Pennel is listed at ₩312, and the single-agent drug Nissel at ₩144.

 

Under the indication approved by the Ministry of Food and Drug Safety, Godex is used to treat liver disease with increased serum glutamic-pyruvic transaminase (SGPT), and Nissel and Pennel are used to treat chronic persisting hepatitis.

 

Based on the indication, Godex may be considered to be different from Nissel or Pennel.

 

However, the API used in all three drugs, BDD, is a standardized and synthesized derivative of schisandra chinensis (Omija) that rapidly lowers the liver inflammation GPT level with its antioxidant action and normalizes ALT with little rebound effect.

 

In this broader sense, the three drugs can be considered to be in the same drug group.

 

The sales performance of each drug last year amounted to ₩53.8 billion for Godex, ₩0.3 billion for Nissel, and ₩5.9 billion for Pennel.

 

No latecomer of the combination drugs Godex and Pennel has been released yet due to difficulty securing subjects for bioequivalence tests, etc.

 

Among single agent drugs, 23 products including Nissel are currently competing in the ₩4 billion market.

 

HIRA aims to consolidate NHI finances using its reimbursement adequacy reevaluation standard to adjust items that cost ₩20 billion or more in claims (0.1% of the NHI claims amount).

 

Using Nissel and Pennel as comparators for Godex also reflects HIRA's determination.

 

Then, by how much would Celltrion Pharm need to lower Godex’s drug price to persuade HIRA?

 

Celltrion Pharm would have two options.

 

First, it could reduce the price of Godex to align with the price of the two-drug combination Pennel at ₩312.

 

In this case, Godex’s price will fall 15.9% from its current price.

 

The other option is to accept Nissel’s price, which is listed at ₩144, and attempt a blowout reduction in its price, lowering the price by 61%.

 

When only considering the situation where Godex’s reimbursement adequacy was already rejected without regarding the current drug price regulation or rationality, using Nissel’s price for the voluntary price cut would be safer than using Pennel’s price to persuade the members of DREC.

 

If Godex, which makes external sales of ₩60 billion, continues to sell the same after a 15.9% price cut, the drug can maintain its position as a blockbuster drug, bringing in ₩40 billion.

 

However, with a 61% price cut, the drug’s sales will drop under the "claims of ₩20 billion or more" guideline that was set for reevalurationalehis time, and nullify any rational HIRA has to reject the proposition.

 

Also, the fact that a new administrative notice has been issued for the "Rule for Standard of Medical Insurance Benefits of National Health Insurance" that stipulates the patent continuity as a factor for reimbursement reevaluations in addition to the existing standards such as clinical efficacy and drug pin overseas countries, may also act as a factor.

 

If the continuity of a patent is applied as a new standard in the reevaluation, Celltrion Pharm would need to take into account the patent expired status of Godex even after demonstrating Godex’s efficacy and effect through literature and clinical data.

 

In this case, it would be more advantageous to reduce the price of Godex to the price level of the single-agent drug rather than the two-drug combination.

 

Regarding the overall situation, an industry official said, “If Celltrion Pharm and HIRA do not come to an agreement during the arbitration period, it can result in a lawsuit.

 

And the court may accept the injunction to suspend the deletion of reimbursement, considering the current drug regulation and reevaluation conditions.

 

However, rather than turning for the worst, the company may pursue a lesser evil method and work to increase sales after undergoing a reimbursement cut.”