Issues to look into when pricing drug by each indication

Scope on the trending keyword ‘indication-specific pricing’ pt. 2

HIRA and NHIS say relevant government bodies’ management system should also be established

The biggest issue is creating a social consensus on differentiated pricing for patients

Amending a regulatory system is not a simple work.

 

Moreover, introducing the indication-specific drug pricing would have to entirely change the premise of the National Health Insurance (NHI) system that grants ‘unified insured pricing on a single drug.’ Regardless of the final result, the government would need to have detailed discussions and survey the public opinion.

 

As for the industry, it is positive that the government is still open to the idea to discuss it further.

 

In fact, Vice Minister Kang Do-tae at Ministry of Health and Welfare (MOHW) spoke during an interview with the industry news media and noted, “The indication-specific pricing could help strengthening the treatment access in severe disease patients.

 

But the feasibility of realizing the novel payment system within the current billing structure and payment system the NHI system uses should be confirmed.

 

And also various views of stakeholders, such as related government bodies, pharmaceutical industry and civic group, should be sufficiently surveyed as well.” And there is already a number of issues raised regarding the subject.

 

Following are the concerned voices on adopting the indication-specific pricing;

◆Issuing a variety of drug codes and the risk of abuse: Inconvenience in administration work is inevitable.

 

Using the indication-specific pricing would mean giving two to three unique codes on a single drug.

 

And the Health Insurance Review and Assessment Service (HIRA) and the National Health Insurance Service (NHIS) would undergo big changes in their billing system, which could cause confusion in healthcare institutes when inputting the main or sub disease code.

 

Nevertheless, these are literally some ‘inconvenience’ that can be handled.

 

When the government implemented the NHI coverage enhancement initiative and lowered the copayment rate of anticancer treatment expense to 5 percent and differentiated the billing, unique code for the variant copayment rate code was issued.

 

In other words, issuing unique code for each indication on a single drug could be bothersome, but not impossible.

 

However, the issue of the system abuse should be looked into.

 

For instance, a drug could be priced at 100,000 won or 150,000 won when prescribed as a stomach cancer or liver cancer treatment, respectively, according to the indication-specific pricing.

 

Then a healthcare institute may falsely report the drug as a prescription for treating liver cancer, when it was prescribed to a patient with stomach cancer to make profit from the difference.

 

Actually, there are drugs containing same substance but priced individually.

 

Regardless of the same substance, each item is approved under different name with a variety of doses and formulation.

 

An immunosuppressant Certican and anticancer treatment Afinitor both containing everolimus, and enlarged prostate treatment Proscar and hair loss treatment Propecia sharing finasteride are prescribed under different pricing.

 

Recently, Pfizer won separate approvals on Vyndaqel and Vyndamax sharing tafamidis and started the reimbursement listing procedure (Vyndamax).

 

But even with these drugs, there were reported cases of abusing the drugs.

 

People with hair loss receiving prescription of Proscar, instead of non-reimbursed Propecia, are apparently breaking the tablet into pieces to take them in smaller dose.

 

But considering the anticancer treatment prescription scene and the initial talks on indication-specific pricing limited to RSA drugs only, it would be unlikely for the system abuse to be apparent widely.

 

Nevertheless, the regulatory measures to manage such system abuse would be accompanied when implementing the indication-specific pricing.

 

An official from NHIS said, “Even if it is a same drug, a pricing reasonable in one country or payment model could be inappropriate in other countries.

 

Ultimately, it would be wise to select optimized payment model taking in account of unique situations in each countries.

 

We need to have talks on the possibility of realizing the novel payment system within the current billing data structure and payment system.”

◆Patient acceptance and social consensus: The most fundamental issue and the core of the conflict is the patients’ reaction.

 

Literally, the indication-specific pricing would differentiate the price of a drug a patient has to pay depending on the disease they have.

 

And for a cancer patient, it may be difficult to accept the fact that the specific cancer they are fighting against is costing them more.

 

In the end, the public should be aware and create a social consensus recognizing that the indication-specific pricing would ‘accelerate the reimbursement listing for anticancer treatment, and be a solution to drugs struggling to expand reimbursement on additional indication after its first.’ Patients could feel the burden of pricing, but ultimately receiving reimbursed treatment would be a better than no option at all.

 

Also the actual price is subject to change when adjusting refund rate, but the gap would be narrowed when the copayment rate is applied.

 

A market access personnel in a multinational pharmaceutical company urged, “Beyond the issue regarding the international reference pricing (IRP) system, the Korean offices are having more difficulties in getting the headquarters’ approval during the reimbursement expansion process.

 

A company has to give up on expanding the coverage when a drug’s actual price, despite the labeled price, is making a loss.

 

We want the public to understand that what the industry wants from the indication-specific pricing is not to burden the patients, but to improve treatment access for them.”