KRW 2 trillion worth damage by COVID-19 to hit drug industry

KPBMA submits an emergency statement to MOHW

Impact on sales, R&D pipelines, ingredient supply could ultimately cripple drug manufacturing in Korea

The organization requests a brake on new regulatory policy and postponing pricing reduction

Impacted by COVID-19 outbreak, Korean pharmaceutical industry requested the government for an emergency initiative like new pharmaceutical regulatory policy to avoid a total dissolution of the Korean pharmaceutical and bio industry.

 

The industry has requested the government to halt the new pharmaceutical regulatory policy but to reinforce the industry support policy.

 

It claims massive sales loss among the industry is inevitable due to COVID-19, and threats like delay in R&D, unstable supply of active ingredient and surge in production cost are storming in simultaneously.

 

Korea Pharmaceutical and Bio-pharma Manufacturers Association (KPBMA, President Won Hee-mok) announced on Apr.

 

13 the organization has delivered an official request to Ministry of Health and Welfare (MOHW) for favorable regulatory policy amid the state of emergency, as the pharmaceutical and bio industry need to serve its original purpose of ‘social safety net’ that protects the life and health of the people.

 

The organization’s official statement projected the Korean pharmaceutical and bio industry would see loss estimated at 1.8 trillion won (at least 10 percent of the total pharmaceutical expense) due to maximum 46 percent drop in outpatient numbers.

 

Moreover, the statement warned the revenue dip would unavoidably affect business operation in all sectors including R&D and facility investment and employment.

 

The situation could worsen as a number of clinical trials have already been delayed or suspended with lack of participants and medical professionals preoccupied with the virus containment.

 

As some drugs in development would have to start over their clinical trials, the industry extremely concerned of losing over 100 billions of wons in a long term.

 

The pharmaceutical manufacturers are also to face increased cost of raw materials due to unstable supply of pharmaceutical substance in the global market and skyrocketed value of US dollars against Korean won.

 

Moreover, many of Chinese active ingredient manufacturing facilities have been closed, and the Indian government has restricted export of 26 active pharmaceutical ingredients.

 

When the cost of raw materials jump by 25 percent, the industry would see production cost surge by approximately 1.7 trillion won.

 

With the industry challenged by various threats at once, the organization strongly urged the government to put a brake on the implementation of the new pharmaceutical regulatory policy for the industry to withstand the second and third waves of the pandemic impact.

 

KPBMA has stressed the government has already enforced drug pricing reduction worth of 100 billion won in January based on surveyed actual transaction price, and it also plans to reduce drug pricing worth of 200 billion won by next January based on increased volume and limited period of weighted pricing, which would add up to about 320 billion won-worth of damage.

 

Including additional pricing reduction worth of 650 billion won on already-listed drug by the differentiated generic pricing, the pharmaceutical industry would be hit by pricing reduction of approximately 1 trillion won, which is about five percent of total National Health Insurance claim.

 

Also the pharmaceutical organization has expressed deep concern over the legislative notice issued on the revised healthcare reimbursement standard in last month, adding a clause ‘narrowing reimbursement scope or reducing drug pricing of reevaluated listed drugs.’ And if the clause comes in effect from July, the damage on the industry would be permanent.

 

The organization official pleaded, “To overcome the global crisis, the implementation of the new pharmaceutical regulatory policy should be suspended, and post-management drug pricing reduction should be postponed for a year to allow minimum time for the industry to overcome the unpredictable crisis.” The official then particularly asked for regulatory boost like R&D support, tax benefit and expedited review for the development of COVID-19 treatment and vaccine and the establishment of drug substance and essential drug manufacturing facilities in Korea.

 

KPBMA official highlighted, “Amid the COVID-19 pandemic, the pharmaceutical industry would focus all capacity into developing treatment and vaccine and providing essential drug,” and “Regardless of any hardships, the industry is committed to protect the people’s health and lives.” “Backed with emergency response and groundbreaking level of the government support, the Korean pharmaceutical and bio industry would be able to conquer the crisis and become the state’s new economic driving force and reliable social safety net,” and “the industry would leverage the Korean economic advancement and pharmaceutical manufacturing scene as the country’s growth driving force,” the official added.