First public-private meeting on drug pricing system reform imminent

The Korea Pharmaceutical and Bio-Pharma Manufacturers Association (KPBMA) formed five TFTs for responding to the system reform

Main argument on distinguishing Stage1-2 for price cuts for currently listed drugs, including combination drugs

Working-group meetings are likely to be held next week… a tight timeframe ahead of the implementation set for the second half

Photo of the Health Insurance Policy Review Committee meeting

The first meeting of the public-private consultative body, which will determine the specific details of the drug pricing system reform, is imminent. Schedules for working-group meetings are being discussed for next week, and the pharmaceutical industry is forming a Drug Pricing System Task Force (TFT).

With the system implementation set for the second half of the year, strategic discussions between the government and the private sector are expected to intensify within this tight timeframe.

According to industry sources on the 23rd, the Korea Pharmaceutical and Bio-Pharma Manufacturers Association (KPBMA) recently formed a Drug Pricing System Response TFT after receiving applications from all pharmaceutical member companies.

Five distinct TFTs have been established, including ▲Reorganization of calculation standards ▲Essential and withdrawal-prevention-drugs ▲Raw materials ▲Innovative and semi-innovative models ▲New drugs. The public-private consultations that will decide the specifics of the drug pricing reform will be addressed primarily through these TFTs.

The government is also preparing to set the negotiation table, with plans to coordinate the schedule for working-group meetings as early as next week.

Among the drug pricing reform measures, the government has scheduled the implementation of price cuts for currently listed drugs, price premiums for innovative and semi-innovative models, and the management of multi-item listings for the second half of the year.

This is a tight schedule if discussions are to be finalized by the end of the first half. While behind-the-scenes discussions have already begun, the process of determining details through the public-private consultative body is expected to proceed at a breathless pace.

Pharmaceutical companies are particularly focused on reorganizing calculation standards, including price reductions for existing listings and multi-item management. It is reported that most pharmaceutical companies expressed interest in participating in the "calculation standards reform TFT."

Among these, the most heavily debated issue is the criteria for determining the timing of price cuts for currently listed drugs. Based on the 2012 listing date, tiered price adjustments will be implemented in Stages 1 and 2; however, the interpretation of combination drugs and data-submission drugs could become a major point of argument.

For instance, matters requiring negotiation include how to classify combination drugs that mix single-agent components from both Stage 1 and Stage 2, and how to categorize data-submission drugs that were listed after 2012 but share the same ingredients and administration routes as reference products listed before 2012.

Furthermore, regarding 'Multi-item listing management,' where prices are significantly reduced one year after the listing of 13 or more items, it is anticipated that voices will emerge demanding exception clauses for categories such as first generics.

Like previous briefings on 'International drug price comparison re-evaluation,' fierce debates over each point of items are expected during public-private consultative body meetings for drug pricing reform.