[Reporter’s View] Mutual understanding is required

not forced understanding on the pharmaceutical companies' part

The National Health Insurance Service made a pre-announcement for the amendment of the detailed guidelines of the ‘Price-Volume Agreement.’ The Price-Volume Agreement, or PVA, is a system that discounts a drug’s price by up to 10% through negotiation between the pharmaceutical company and NHIS for products whose use volume had rapidly increased.

 

The system was implemented to save NHI finances.

 

The current system has been in place since 2014 after the system was implemented in 2007, therefore the move for its improvement seems timely.

 

However, the NHIS and the pharmaceutical industry have mixed opinions on how to amend the system.

 

This clash is most prominent in the matter of deciding whether to expand or reduce the scope of eligibility of the system.

 

The NHIS believes more pharmaceuticals should be applied the system through an amendment.

 

In other words, the authorities plan to reduce the scope of pharmaceuticals that are exempt from PVA negotiations, therefore applying the system to a broader range of pharmaceuticals.

 

In detail, the authorities had planned to narrow the exclusion criteria to ‘below 90% of the arithmetic mean price’ from the ‘below the arithmetic mean price of same ingredient drugs,’ Under the new criteria, products subject to PVA negotiations would increase to 69 from the 59 reviewed in the previous year.

 

On the other hand, the industry claims that the scope of exclusion should be increased to reduce even just one more pharmaceutical subject to price cuts.

 

Currently, products that file an annual claims amount of less than ₩1.5 billion every year are excluded from PVA negotiations.

 

The industry claims that this limit should be raised to ₩5 billion or even ₩10 billion, The NHIS had partially accepted the industry claims and can accept increasing the ceiling to ₩2 billion from the current ₩1.5 billion.

 

Disregarding the complex calculations in place, the clashing values of the industry and NHIS are clear.

 

The NHIS prioritizes ‘sustainability in NHI finances,’ whereas the industry prioritizes ‘concern over reverse discrimination of homegrown new drugs.’ Neither side can be 100% right, and no side should be forcing its claim on the other.

 

This is why the NHIS’s past actions leave some room for disappointment.

 

The NHIS had continuously emphasized that “the industry needs to understand and sympathize” with the NHIS’s position.

 

Although the words “understand” and “sympathy” were used, in context it is more coercion than persuasion.

 

Under the inviolability rationale of protecting the sustainably of our national health insurance, the sacrifice of the pharmaceutical industry was dismissed as a ‘trivial’ matter.

 

The NHIS had planned to enforce the guidelines effective as of January 1st this year.

 

However, the authorities held back from implementing the amendment due to strong opposition from the pharmaceutical industry and said it will prepare a better The industry believes that the amendments will be disclosed soon.

 

However, one clear thing is that neither side can unilaterally continue to force understanding and sympathy on the other’s part.

 

It is this reporter’s hope that an improvement on which both sides can truly understand and agree on could be reached soon.