"Generic price cuts to signal pharma industry transition"

"Since the 2012 drug price cut, we are lacking pharmaceutical companies that succeeded in innovation"

"Limited ingredient-name-prescription will be discussed after the wider use of substitution prescription"

"Incorrectly framed wholesale platform ban…it should be discussed at the National Assembly"

Jeong Kyung-sil, Head of the Office for Healthcare Policy under the Ministry of Health and Welfare (MOHW)

"It is true that Korea's generic prices are over-valued compared to other countries. To ensure a stable supply of short drugs, we cannot rely on a generic-centric industry structure. Criteria must be established to drive the transition from generic production to new drug development. The government's drug price policy aims to improve the industry structure, rather than a matter of National Health Insurance funding, by funding pharmaceutical companies that contributed to innovation."

Jeong Kyung-sil, Head of the Office for Healthcare Policy under the Ministry of Health and Welfare (MOHW) explained, related to the aim of the drug price reform plan, "The administrative direction of the new drug pricing reform is to improve the direction of the domestic pharmaceutical industry by adjusting generic prices that are high-priced compared to other nations."

The MOHW notes that, since the 2012 drug price cuts, the domestic industry has failed to deliver sufficient innovation or new drugs as of 2026. Consequently, there is a significant need to send a clear message to domestic pharmaceutical companies toward innovation through this reform.

Regarding the review of "ingredient-name-prescribing" for National Essential Medicines, the MOHW plans to implement a policy related to simplifying post-notification for substitution drugs. Then, it will be reviewed once society-wide needs about supply instability grow.

Addressing the legislative delay of the bill prohibiting non-face-to-face treatment platforms like Doctor Now from operating as drug wholesalers, Jeong said, "The law has been incorrectly framed. Jeong stated the law does not ban the platform business itself but prohibits unfair trade practices with potential conflicts of interest. Furthermore, it should be discussed at the National Assembly."

During a recent meeting with the Korea Special Press Association, Jeong stated MOHW's views on drug price reform plan, limited ingredient-name-prescribing, and the wholesale platform ban.

"Regarding drug price cuts, opinions on ways to relieve the burden on the pharmaceutical industry will be gathered"

Jeong said that the reform is inevitable because today's Korean pharmaceutical industry remains preoccupied with generic manufacturing and sales.

Even among 40 designated "Innovative Pharmaceutical Companies," there are cases where generic sales account for 90% of revenue, proving that high generic pricing does not lead to innovation.

The MOHW intends to adjust generic prices set above overseas levels and use those resources to support pharmaceutical companies that contribute to new drug innovation and the resolution of supply instability.

However, acknowledging industry backlash and demands for predictability, the MOHW plans to continue collecting opinions to reduce the impact on companies.

Jeong said, The goals of reducing drug pricing are intended to reduce unnecessary drug expenditures and evolve the pharmaceutical ecosystem," and added, "Both the Office for Healthcare Policy and the industry agree on." 

"It is true that Korea's generic prices are over-valued compared to other countries. The Ministry decided that the current drug pricing system is designed to favor a generic-centric market. Therefore, the reform is intended to lower the drug price and encourage innovations," and added, "For example, the industry will advance if fostering innovative pharmaceutical companies and supporting R&D are accompanied."

Jeong said, "During the drug price reform 13 to 14 years ago (2012 general price cuts), generic prices were maintained at a higher level than those in developed countries. While some pharmaceutical companies have successfully improved their fundamental competitiveness since then, others have shown no improvement," and added, "This is an evidence that maintaining high generic prices does not inherently lead to innovation. While the framework of the announced reform plan is unlikely to change significantly, the MOHW is currently reviewing ways to mitigate the impact on the industry by actively soliciting and considering the opinions of pharmaceutical companies."

"Ingredient-name-prescription, first to simplifying substitution drug prescription…whole-sale ban has been incorrectly framed"

​Regarding the Medical Service Act's inclusion of non-face-to-face treatment effective December 24, Jeong assessed that the Pharmacy Act amendment, including coverage of wholesale bans and mandatory DUR checks, has been put in the wrong frame.

Jeong explained that while traditional players operate within an institutional framework, new platforms have entered a regulatory vacuum. The law is intended to fill this legal gap rather than specifically target platforms.

The MOHW plans to coordinate specific adjustments to the non-face-to-face treatment pilot program in sync with the upcoming revisions to an article of the Medical Service Act.

Regarding  the President Lee Jae Myung administration's national task of limited ingredient-name-prescribing, the MOHW said that this agenda will be discussed only after the administration of simplified post-notification for substitution drugs for pharmacists, which is set to begin on the 2nd of next month.

"While the pilot program has been ongoing, revised measures could be implemented early, ahead of the official December enforcement, as we are working on articles and gathering feedback from expert advisory groups," Jeong added, "It depends on the speed of drafting the article of the Act."

Jeong also explained, "The bill has been incorrectly framed as similarity to Doctor Now or Tada Ban," and added, "While traditional healthcare entities operate within a strict institutional framework, the emergence of telemedicine platforms created a regulatory vacuum. She emphasized that the law is not intended to prohibit the platform industry itself, but rather to fill a legal gap and prevent potential unfair trade practices or conflicts of interest.

Jeong emphasized, "While other existing players (doctors, pharmacists, etc.) were operating within an institutional framework, a new player (platform) entered, and the platform alone became able to do anything without any regulation," and added, "It is a concept of creating an overall system for the legal and institutional gap that has arisen, not a concept of only stopping platforms."

Jeong said, "It has currently passed the standing committee and the Legislation and Judiciary Committee in the National Assembly, and the lawmakers who passed the bill have not significantly changed their positions  to date. However, the MOHW has no authority to step forward. Ultimately, it is a structure that can only be discussed at the National Assembly level. It is difficult to call the wholesale operation of non-face-to-face treatment platforms innovation. It is a law to prevent unfairness, not to stop the platform business itself."

Jeong concluded by stating, "Regarding the wider use of generic substitution, we will create tools to make it more convenient to utilize, and whether to mandate ingredient-name-prescribing requires social consensus," and added, "If we were to discuss mandating ingredient-name-prescribing, we should start by reviewing drugs with unstable supply. Nowadays, generic substitution can be used much more flexibly than before. Since the problem of supply-unstable drugs is linked from production to supply, whether to implement ingredient-name-prescribing should be discussed later."