Improved reg. allow price succession of transfer products

Organon Korea’s ‘Ezetrol’ newly listed at highest price… maintaining its price through transfer/acquisition

Avoided drug price cuts using the product transfer/acquisition regulations newly added in January

Daewoong Bio, Alvogen and Celltrion also lists transferred/acquired products at highest price

Drug price succession in transferred pharmaceutical products has been increasing.

 

As the stepped pricing system is no longer applied to drugs that are relisted due to change of licensees, companies have been actively engaged in the transfer of their products.

 

Some products have seen a twofold increase in their price compared to when the stepped pricing system was applied.

 

According to the Ministry of Health and Welfare (MOHW) on the 30th, Organon Korea’s ‘Ezetrol tab.’ will be listed at a ceiling price of 744 won.

 

Ezetrol (ezetimibe) originally used to be owned by MSD Korea.

 

As the license holder was changed to Organon Korea, a new spin-off of MSD Korea, the drug had to be newly listed on the health insurance benefit list.

 

MSD Korea’s Ezetrol will be removed from the reimbursement list from next month and its license will be transferred to Organon Korea.

 

In January this year, a drug price succession regulation for transferred products was newly added, which allowed Ezetrol to maintain its previous maximum ceiling price of 744 won.

 

In July last year, the drug pricing system was revised to add a stepped-pricing system that reduces the price of drugs that are listed late.

 

The key point of the system was to reduce the price of later entrant generics by 15% when the number of products exceeds 20.

 

In other words, if there are more than 20 drugs listed of the same ingredient, the drug price is set at ‘85% of the drug price of products that does not satisfy the two qualifications’ or ‘85% of the lowest price among the previously listed drugs,’ whichever is lower.

 

Under the system, an unexpected issue arose as the drug products transferred between businesses were being listed at the lowest price among all products in the same category due to the application of the stepped pricing system.

 

In transfers where the license of a pharmaceutical product is handed over to another company, the product needs to undergo a removal and relisting process.

 

Even products that were previously listed are regarded a newly listed product after removal from the benefits list and is inevitably applied the stepped pricing system.

 

The industry had pointed out that it was unreasonable to list transferred products the same as newly listed products, and the MOHW agreed to improve the system.

 

From January, MOHW had made a partial amendment to the ‘Criteria for Decision or Adjustment on Drugs,’ so that in cases ▲where the manufacturer’s position was succeeded; ▲ where the same company switches its license from manufacturing and marketing to import authorization; or ▲ where the company withdraws its license due to business conversion, etc.

 

and receives relicensing for the same product; the product’s price will be calculated at the same ceiling price that was previously set for the removed product.

 

The regulation allows for the succession of the previous drug price in process of removal and relisting the same products in product transfers, etc.

 

42 ezetimibe products are currently listed in the reimbursement list, and their prices range from 480 won to 746 won.

 

If Organon Korea’s Ezetrol was to be regarded as a newly listed product, its price may not have exceeded 408 won, which is 85% of the lowest listed price of 480 won.

 

However, with the amendment, the company was able to maintain Ezetrol’s price at its previous listing price of 744 won.

 

Recently, the drug price succession is actively being carried out among transferred drug products.

 

In only this month, 4 products succeeded their previous drug price and were newly listed on the reimbursement benefits list.

 

Daewoong Bio’s amlodipine and Valsartan combination ‘V-Forge Tab 10/160mg’ was newly listed at a ceiling price of 1,128 won on the 1st of this month.

 

1,128 won is the highest price among all products in its category and dose, and is a price 60% higher than the lowest price, which is 699 won.

 

81 products of the 10/160mg dose Amlodipine and Valsartan combination are currently listed in Korea.

 

Under the stepped pricing system, newly listed products may not exceed a price of 594 won, which is 85% of the lowest price of 699 won among the same products.

 

However, V-Forge Tab 10/160mg was a transferred product from Cosmax Pharma.

 

By entering the market through a transfer, Daewoong Bio was able to be listed at a price that was twice higher than that of newly authorized products.

 

Alvogen Korea’s ‘Maxgrel-A,’ which was newly listed from this month, received a ceiling price of 1,209 won.

 

This is the highest price among the same products.

 

With 35 Maxgrel-A products already listed, the price of a newly listed product in the same class would have had received a price discount through the stepped pricing system.

 

However, Maxgrel-A was able to maintain its highest price by being newly listed through a transfer.

 

If Maxgrel-A was a newly licensed product, its price would not have been able to exceed 732 won, which is 61.4% of the highest listed price.

 

Celltrion Pharm’s ‘Celltrion Neopa,’ and Albogen Korea’s ‘Lutsnal Cap.

 

0.4mg’ would also have been applied the stepped drug pricing system, receiving a price that is ‘85% of the lowest price’ or ’61.4% of the highest price.’ However, the drugs were able to maintain their previous price as a transfer product.