ECCK “Revised Pricing Negotiation Guideline Violates FTA"

ECCK calls for press conference and submits 180 recommendations for Korean government

“Regulating without public comment period”, Healthcare Committee urges 34 regulatory changes

Chair Julien Samson of ECCK Healthcare Committee (VP& General Manager of GSK Korea, fourth from the right) and other ECCK members presented White Paper 2019 and presented recommendations to Korean government.

 

Europe-based global pharmaceutical companies with offshoots in Korea have filed official complaints on ‘additional requirements under side agreement’ added to drug pricing negotiation procedure in Korea.

 

They claim the new changes could violate the principles of Korea-EU Free Trade Agreement (FTA).

 

European Chamber of Commerce in Korea (ECCK) convened a press conference on Nov.

 

29 at Four Seasons Hotel Seoul, and addressed issues regarding each industry sector and 180 recommendations to the Korean government.

 

ECCK’s Healthcare Committee (Chair Julien Samson, VP & General Manager of GSK Korea) also contributed 34 recommendations.

 

The highlight of the recommendations was the ‘Revising the New Requirements Imposed through Drug Price Agreement.’ National Health Insurance Service (NHIS) imposed several ‘side agreement’, or ‘additional requirements’ to the pharmaceutical companies during the price negotiation since last year and regulated them in June, 2019.

 

ECCK official warned the additional requirements were “regulated without any public comment period.

 

Some of them are overly strict with little relevance to pricing negotiation.

 

This could violate the principles of Korea-EU FTA”.

 

The committee argues Korea-EU FTA stipulates when revising regulation or guideline regarding pharmaceutical pricing or insurance reimbursement, both government bodies should communicate with industry.

 

“It is recommended to consult with the industry stakeholders on any new requirements or revisions in line with the principles of the Korea-EU FTA”, ECCK officially advised.

 

In fact, the side agreement requirements have become the most talked about issue of recent drug pricing negotiation cases.

 

Lipiodol incident was the critical point triggered the Korean government.

 

The change is interpreted as the government’s effort to prevent any other already-listed item refusing to supply products to Korean market.

 

The new requirements impose penalty on pharmaceutical company not fulfilling obligation to supply drug products, and stipulate the companies to provide compensation for patient when suspending supply.

 

Also the side agreement requires both negotiating parties to keep negotiation details non-disclosed.

 

Biogen’s Spinraza, Janssen’s Darzalex, Amgen’s Prolia and other items that completed pricing negotiation this year had to meet the additional requirements.

 

Although it had the negotiation last year, CJ Healthcare’s K-Cab had to fill out the side agreement as well.

 

And three new drug items exempted from negotiation were denied from the last reimbursement review procedure in April, because they were “missing side agreement”.

 

It was unexpected as reimbursement used to be granted usually without an issue for an item passed by Health Insurance Policy Deliberation Committee (HIPDC).

 

At the end, Whanin Pharm’s Agotin, AstraZeneca’s Faslodex and Takeda’s Alunbrig were successfully listed after compiling side agreement.

 

But the happening reaffirmed the gravity of side agreement in the negotiation procedure.

 

In June, the side agreement submission was regulated as a law.

 

NHIS’ revised drug pricing negotiation guideline now requires pharmaceutical companies to submit an agreement about supply obligation, patient protection measures, and confidentiality when negotiating drug pricing.

 

The Article 9 of Drug Pricing Negotiation Guideline was revised and now imposes new requirements to pharmaceutical companies to protect Korean patient, to provide compensation for patient damage, and keep negotiation confidential.

 

The pharmaceutical industry is mainly complaining about the government omitting the industry comment period.

 

For an instance, a global pharmaceutical company organization, or Korean Research-based Pharma Industry Association (KRPIA), submitted an official statement claiming “Imposing of additional requirement or obligation for drug pricing negotiation should come with an administrative notice according to the Administrative Procedure Act”.

 

The organization also reprehended the new requirements are considered as ‘side agreement’, but it actually puts NHIS on an authoritative position for it to unilaterally impose obligations to pharmaceutical companies.

 

The ECCK’s complaint is basically an extension of the criticism.

 

Established in 2012, ECCK has headquarters in Europe and it consists of 360 active member companies.

 

Every year the Chamber represents the voice of European businesses by collecting recommendations and relaying them to the Korean government.

 

Last year, the Chamber has presented ECCK White Paper 2018 with 123 recommendations, and almost 40 percent of the recommendations received positive feedbacks from the Korean Ministry of Trade, Industry and Energy (MOTIE).