KRPIA-MOHW talk negotiation, prioritized lisiting and PVA

In-depth talk on reimbursement review prioritization and negotiation subject selection standard

Government promises flexible execution of the regulations and positive review on recommendations

“Nothing was clarified, but we could somewhat feel out their approach.” For the first time since new Director Yang Yoon Seok was appointed, the Division of Pharmaceutical Benefits at Ministry of Health and Welfare (MOHW) met with a couple of dozen Korean Research-based Pharmaceutical Industry Association (KRPIA) officials and multinational pharmaceutical company market access (MA) representatives on May 28.

 

Along with Director Yang, Senior Deputy Director Lee Seon-joo and Deputy Director Choi Kyung-ho joined the meeting, where the organization officials and various pharmaceutical company representatives freely asked questions and spoke of their recommendations.

 

Of all topics addressed, three main issues were discussed in-depth.

 

Is pricing negotiation required for all drugs seeking for reimbursed pricing?

 

The Korean government has notified earlier of implementing unified drug listing procedure.

 

For all drugs evaluated to be appropriate for health insurance reimbursement, the government has mandated negotiation to finalize the listing decision.

 

The change is crucial for Korean pharmaceutical companies and their generic products.

 

But for multinational pharmaceutical companies, the change is a concerning issue for the drugs taking the negotiation-exempted track with pricing lower than weighted average price.

 

The point of negotiation exemption system is speed.

 

Technically, companies aiming to swiftly proceed with reimbursement listing take the negotiation exemption track and choose to price the drug on the level of negotiated price.

 

But now the mandatory negotiation procedure could slow down the listing procedure.

 

Regarding the concern, MOWH implied its intention to operate a flexible system.

 

MOHW official said, “The government is also aware that not all drugs seeking for reimbursement would be fit for negotiation on projected claim amount.

 

Depending on the circumstances, the negotiation condition may vary.” Is reimbursement listing prioritization making a leeway to neglect some drugs?

 

The new drug pricing system also stipulates the Minister of Health and Welfare to decide the prioritized order of drug reimbursement listing.

 

Currently, the reimbursement listing review by relevant committees like Drug Reimbursement Evaluation Committee has a limited period of 150 days.

 

But the new prioritized reimbursement review would remove the time limit.

 

The pharmaceutical industry is clearly worried about the amendment.

 

Basically, the reimbursement listing procedure for a drug simply pursuing the benefit could be delayed indefinitely based on the prioritized order.

 

The government seems to be aware of the concern.

 

MOHW explained, “Only because a drug is expensive, or in other words, the drug has a significant financial impact, it would not be ruled out from the priority order.

 

Some drugs could start the listing procedure fast, if need be.

 

We are always pondering on how to improve new drug access.” Price-volume agreement system and labeled price A company representative also spoke of applying the ‘labeled price’ notion, used in the risk sharing agreement (RSA) system, for drugs lowering price due to price-volume agreement (PVA) system.

 

In fact, the government already allows PVA drugs to apply refund rate.

 

However, the benefit is only given to the companies certified as an innovative pharmaceutical company.

 

And the multinational company official proposed the benefit should be extended.

 

The government officials apparently answered with a positive note.

 

The ministry official urged, “The recommendation is plausible and we would review the matter in detail.

 

But, as you would be aware, changes in regulations cannot be rushed in a short span of time.”