[Desk View] Dual pricing for the sake of our own citizens

even if it’s just to serve our own people

The government intends to expand the number of dual-priced listed drugs to prevent disclosure of actual transaction prices.

 

By raising reference prices through higher public list prices, it aims to improve access to new drugs.

 

The government has announced a major overhaul of Korea’s drug pricing system.

 

The forthcoming reform plan, which the government plans to reveal concrete details soon, is drawing significant attention from the pharmaceutical industry.

 

It is expected to include adjustments to the generic drug pricing calculation rate, reform of the tiered drug pricing system, consolidation of post-market management systems, expansion of the Risk Sharing Agreement (RSA) and dual pricing scheme, and R&D investment-linked drug price premiums.

 

Multinational pharmaceutical companies are particularly focused on expanding the dual pricing system.

 

Among RSAs, the refund-type model—which assigns dual prices by separating the actual transaction price from the listed price—has consistently been the preferred contract type since its introduction.

 

However, calls for improvements to its scope have been persistent.

 

Many even suggested excluding the refund-type from RSAs altogether.

 

The government has also partially accommodated these opinions, making minor adjustments to the system.

 

Initially applied under a strict criterion, only to ‘anticancer drugs or rare disease treatments with no equivalent substitutes or therapeutically equivalent alternatives’, the ‘life-threatening’ qualifier has now successfully been removed from the criteria.

 

Yet, the prevailing sentiment remains that its application conditions are still stringent.

 

However, this time appears to be different.

 

Pressure from the U.S.

 

Trump administration’s Most-Favored-Nation (MFN) drug pricing policy served as a trigger, and the health authorities appear to have internalized growing alarm over the long-discussed but uncomfortable issue of “Korea passing” within the global pharma industry.

 

Given the circumstances, the upcoming expansion of RSA and dual pricing will likely loosen at least the criteria tied to disease severity.

 

Whether the current price cap, “below the A7 adjusted average price,” will be modified is another point to watch.

 

It is never right for a game of brinkmanship to unfold over reference prices, leading to the bypassing phenomenon.

 

The products sold by multinational pharmaceutical companies are not luxury goods like Mercedes-Benz or Chanel.

 

It is also true that drug prices are set higher in relatively poorer countries—those with weaker negotiating power.

 

Still, many countries are expanding the share of non-public drug pricing—a second-best solution, though not ideal— to secure access to new therapies for their own citizens.

 

While the global moral imperative of ‘transparent drug pricing’ is commendable, the government must also make decisive choices for the sake of patients in our country.