[Reporter's View] Gov’t cooperation leads to a price cut?

When cooperation with the government leads to a price cut

There are times when cooperation ends up causing losses.

 

In an ironic twist, pharmaceutical companies that participated in the government's infertility support program have now found their products caught in the net of the Price-Volume Agreement (PVA) system, leaving them little choice but to face rapid drug price cuts.

 

The government's infertility support program, aimed at addressing the low birthrate issue, has been steadily expanded over the past years.

 

Last year alone, it was expanded 3 times, and in January 2024, the previous eligibility criterion of “household income at or below 180% of the median income” was abolished, and subsidies for in vitro fertilization and artificial insemination were provided regardless of income.

 

In February, the number of reimbursements covered by national health insurance was increased from a maximum of 16 sessions per person for in vitro fertilization (9 times for fresh embryos and 7 for frozen embryos) to a maximum of 20 sessions per person (without distinction between fresh and frozen embryos).

 

In November, the government also expanded the co-insurance rate for infertility treatments, which had previously been differentiated by age (30% for those aged 44 and under and 50% for those aged 45 and over), to a uniform 30% regardless of age.

 

With the expanded infertility support, demand also increased significantly.

 

The supply of infertility treatments could not keep up with demand, leading to supply disruptions and shortages.

 

Follicle-stimulating hormone (FSH) preparations, which are essential for infertility treatment, are used to induce hyperovulation in assisted reproductive technology (ART) such as in vitro fertilization or artificial insemination.

 

The issue is that most follicle-stimulating hormone preparations are hormone preparations (biological drugs) with complex manufacturing processes, making it difficult to increase production to meet the increased demand.

 

From 2023 to the present, companies have reported supply disruptions or shortages for 7 follicle-stimulating hormone preparations to the Ministry of Food and Drug Safety.

 

However, major FSH preparations that had expanded their supply to meet the rising demand have now been selected for PVA (Price-Volume Agreement) negotiations starting this July.

 

The outcome will almost certainly lead to drug price reductions.

 

Demand for infertility treatments is expanding globally beyond domestic markets.

 

China has expanded public health insurance coverage for in vitro fertilization (IVF) in major cities like Beijing and other provinces starting in 2023 as part of efforts to address low birth rates.

 

The United States is also expanding support policies, including the first federal-level executive order in February 2025 to enhance access to IVF, moving beyond previous state-level initiatives.

 

In other words, it is not easy for any pharmaceutical company to ensure a smooth supply of the lacking IVF drugs in line with policy trends.

 

The fact that many pharmaceutical companies are giving up is evidence of this.

 

It is time for the government to provide appropriate compensation for those who cooperate with national healthcare initiatives.