Choline alfoscerate companies anxious of returning claims

Some generics included for the PVA negotiation

A drug with PVA revoked from approval in reevaluation has to return claimed amount

Returning prescription sales made from removed indication burdens companies

Companies with cognitive enhancer choline alfoscerate products are to face another hurdle.

 

Specifically, the companies are concerned of the clause stipulating the return of the claimed reimbursement when failing the clinical reevaluation during the pricing renegotiation for a product surging in sales.

 

As South Korea’s Ministry of Food and Drug Safety’s (MFDS) clinical reevaluation process has been set, some companies are faced with marketing approval revocation and prescription sales return in the worst case scenario.

 

According to pharmaceutical industry sources on July 30, the price-volume agreement (PVA) negotiation that National Health Insurance Service (NHIS) and pharmaceutical companies are to engage has included a number of choline alfoscerate generics.

 

PVA allows an adjustment of pricing of a drug with a significant surge in use volume through a negotiation between pharmaceutical company and NHIS.

 

Regardless of original or generic, a drug falling under the category of ‘making over 60 percent increase in claim amount compared to the year before, or making over 10 percent increase but increased by over 5 billion won,’ would be designated as a subject for PVA negotiation.

 

Apparently ten choline alfoscerate products have been included for the coming PVA negotiation.

 

As the medication market tends to expand rapidly every year, many generics in the market saw a sharp increase in prescription volume.

 

A pharmaceutical market research firm UBIST found the choline alfoscerate’s outpatient prescription volume in the first half of the year reached 224.1 billion won, growing 19.6 percent from last year.

 

The market volume has tripled in five years from 70.5 billion won in the first half of 2015.

 

Quarterly outpatient prescription volume made in choline alfoscerate (Unit: KRW 1 million) Source: UBIST

Regardless, the choline alfoscerate companies notified to participate in the PVA negotiation seems to be pressured about the sales return regulation.

 

In accordance to NHIS drug pricing agreement, a company conducting a clinical trial for item approval renewal and pharmaceutical reevaluation by MFDS is stipulated to notify the details to NHIS.

 

In case the company fails the reevaluation and loses approval, the responsible company has to pay NHIS back all reimbursement claimed from the date the MFDS ordered clinical trial through the date the listing was removed.

 

Ultimately, if a company decides to withdraw its product from the market due to reevaluation outcome after agreeing on the choline alfoscerate’s pricing cut according to PVA negotiation, the company has to return all sales generated in between to NHIS.

 

Choline alfoscerate is actually subjected to undergo clinical reevaluation.

 

MFDS has recently demanded companies with choline alfoscerate products to submit clinical trial data.

 

The relevant protocol has to be submitted by Dec.

 

23.

 

The companies unable to prove efficacy of their choline alfoscerate during the clinical trial, the products may lose the government approval.

 

And those companies that settled on the PVA would have to refund all prescription sales made from negotiation through approval revocation.

 

And the product partially changing the indication due to clinical reevaluation would also have to return the prescription sales generated from the removed indication.

 

Choline alfoscerate has been indicated to treat patients showing secondary symptoms of cerebrovascular insufficiency and degenerative brain-organic psychiatric syndrome— impairment of sense of direction, motivation, judgment and concentration due to confusion and degenerated memory, judgment and motivation; changes in emotions and behaviors—emotionally insecure, hypersensitive to stimulation, and indifferent to surrounding; and senile pseudo-depression.

 

If any one of the indication gets removed, the pharmaceutical companies would have to pay back a part of their sales to NHIS.

 

And the pharmaceutical industry experts predict the clinical reevaluation would likely to remove at least one of the indications.

 

In fact, another cognitive enhancer acetyl-L-carnitine has lost one of indications after undergoing the clinical reevaluation.

 

The original acetyl-L-carnitine Nicetile by Dong-A ST was indicated to treat patients with primary degenerative disease and secondary degenerative disease induced by cerebrovascular disease.

 

However, the medication failed to demonstrate the efficacy of treating primary degenerative disease in the clinical reevaluation ordered by MFDS in 2015, the indication was removed in July last year.

 

Acetyl-L-carnitine product that had PVA negotiation has to pay back all prescription sales made from the point of negotiation through indication removal.

 

While the health authority has decided to apply selective reimbursement on choline alfoscerate, the companies with the medication subjected to PVA negotiation are heavily burdened.

 

On July 24, MOHW convened the Health Insurance Policy Deliberation Committee (HIPDC) meeting and deliberated reimbursement reevaluation result and applying selective reimbursement on choline alfoscerate.

 

The patient copayment rate on choline alfoscerate would be raised from 30 percent to 80 percent.

 

MOHW preannounced the amendment and plans to enforce it from August.

 

A pharmaceutical company insider complained, “When the market is unstable due to coverage reduction and clinical reevaluation, the company feels even more strained about the risk of returning prescription sales only because of making a significant growth in recent sales and clinical reevaluation result.”