NHIS prepares measures to implement dual drug pricing system

Will collect industry opinions this month

Follow-up measure after last month's MOHW announcement...for new drugs developed by innovative pharmaceutical companies

The National Health Insurance Service (NHIS) is preparing a procedure for implementing the dual drug pricing system for domestically developed new drugs and will collect industry opinion this month.

 

The measure seeks to prepare guidelines for actual negotiations, as the MOHW's notification last month included a provision for the dual drug pricing system.

 

According to industry sources on the 14th, the National Health Insurance Service recently delivered a measure for the implementation procedure of the dual drug pricing system to pharmaceutical organizations and will collect opinions until the end of this month.

 

Dual pricing refers to the situation where the listed insurance ceiling price is different from the actual price.

 

Currently, drugs reimbursed under the Risk-Sharing Agreement (RSA) are subject to dual pricing.

 

When the MOHW notified of the amendments to the 'Standards for Determination and Adjustment of Pharmaceuticals' on March 4, it included a provision on the availability of dual drug pricing contracts for domestically developed new drugs.

 

Specifically, through the revision, ' Appendix 1 Schedule 2: The 'Evaluation Criteria for Drugs Requiring Evaluation Considering the Impact on Healthcare,’, new drugs developed by innovative pharmaceutical companies, approved by the MFDS through expedited review, and exempted from submitting bridging data by conducting domestic clinical trials, can sign a separate contract with the NHIS for the purpose of enhancing global competitiveness.

 

As a result, domestically developed drugs that meet the conditions will be eligible for dual pricing like RSA drugs.

 

It is analyzed that it is much more advantageous to receive a higher drug price when registering a drug overseas if the indication price is higher than the actual price through the dual drug pricing system.

 

This is because importing countries set prices by referring to domestic drug prices when registering drugs.

 

Currently, the only new drug developed in Korea that has been subject to dual drug prices is K-CAB, a new drug for gastroesophageal reflux disease.

 

K-CAB has been reimbursed under the Refund type agreement determined during negotiations on the price-volume linkage system, which resulted in a difference between the drug’s actual and displayed prices.

 

The actual ceiling price is KRW 1,300, the same as when it was first listed in 2019, but the actual price is expected to be lower than this due to the several price-volume agreements it has undergone since.

 

The current plan for the implementation of the dual drug pricing system is expected to include details on the target, negotiation methods, required documents, and post-implementation management measures.

 

When the dual drug pricing system for new domestic drugs is fully implemented, the NHIS is expected to face even greater administrative burdens.

 

This is because the number of cases in which the NHIS has to recalculate the reimbursement amount from the displayed price to the actual price and refund the difference will increase.

 

It is reported that the NHIS is already devoting a considerable amount of time and manpower to the reimbursement process.

 

An industry official said, “The dual drug pricing system is limited to domestically developed innovative drugs, so it may not be applicable to many, but it will definitely help pharmaceutical companies that benefit from it.

 

However, the key question is how the NHIS will address the issue of the increasing reimbursement administrative burden."