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- 2025-12-27 15:35:01
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- The Answer is in RSA expansion and undisclosed pricing
- by Kim, Jung-Ju Nov 29, 2019 10:54pm
- Maybe the answer has been before our very eyes all along. If Korea Passing occurs when other foreign countries start referring to Korean drug pricing, then it could be avoided by preventing them from referencing. Otherwise, drug could be price at a moderate level to avoid Korea Passing regardless of other countries. Theoretically they are both simple, but realistically they are not. It is close to impossible for Korea to bring up the pricing level immediately. So the second option of making Korean pricing system unattractive for external reference pricing, or in other words, increasing number of ‘undisclosed drug pricing’ could be a better option. Ultimately, the industry is leaning towards risk sharing agreement (RSA). Daily Pharm’s survey on 21 market access personnel from multinational pharmaceutical companies clearly showed their intention. 16 out of 21 companies suggested ‘RSA expansion or splitting out the refund type’, or ‘undisclosed drug pricing’ as solutions for Korea Passing. RSA has a room to grow, “make the right decision for the people” Increase number of listed drugs with dual pricing to prevent disclosure of actual price. Raise the externally referenced pricing with higher labeled price. Dual pricing for refund type RSA system in Korea undergoes economic evaluation like any other generally listed drug, and receives actual price according to ICER value. In other words, the government may provide dual pricing, but it does not affect National Health Insurance financially. But the civic groups are opposing fiercely and the government cannot blindly ignore it. The government has also shown strong will to expand RSA. Korean Ministry of Health and Welfare (MOHW) recently presented three conditions for RSA application eligibility, regardless of treating ‘life-threatening level of health condition’ or not. Expanding scope of subject disease was one of the most demanded changes the industry has been asking for, besides making follow-on drug eligible. The government, reportedly, has ongoing discussions about additional expansion plan. The industry is welcoming the government’s action for now. But many are still craving for more changes. The pharmaceutical industry is urging the government to increase ratio of undisclosed drug pricing. One change they are pressing on is ‘splitting out the refund type RSA’. The industry demands the refund type RSA should not be a conditional listing route, but another route of general listing procedure. In fact, Korea’s RSA has narrower scope than other countries. On the contrary, foreign countries are deciding to keep more number of drug pricing undisclosed. A common example that multinational companies like to take are Italy and Australia. The European country now has more than 300 drug items with undisclosed pricing, and Australia has 95 items. Taiwan and Malaysia, following Singapore, amended their regulations for pharmaceutical companies to freely apply for dual pricing. Some are also pointing fingers at the labeled price itself. A pharmaceutical company can propose a labeled price in Korea, but under the limitation of ‘less than A7 adjusted average price’. The industry explains the existing labeled pricing model could become a reason for Korea Passing in a long term. A global pharmaceutical company’s market access expert claimed, “Many countries caring about their own people are trying to secure access to new drugs by expanding the ratio of undisclosed drug pricing, despite it being a second best option. Although the title of ‘transparent pricing’ in global community is admirable, Korean government should make a decision for their patients as well”. Views and criticism on Korea Passing All of the arguments mentioned make sense. But accepting all demands at once is impractical. Their demands need a series of discussions to reach a satisfying solution. As the survey study showed, China is playing the most prominent role in the Korea Passing phenomenon the industry is worried about. China refers to Korean drug pricing, but still there are two to three years of gap in point of listing between two countries. But as the gap is narrowing, the pharmaceutical companies are now feeling the pressure. Not all drug items are instantly faced with risk of Korea Passing. Some say RSA expansion is not the only option. MOHW, for instance, recently presented an option of ‘trade-off’. The ministry intends to save expenditure from drug with expired patent, and reinvest the saved finance on securing access to new drug. However, pharmaceutical industry expressed anxiousness as they claimed it is another means of reducing drug price. It makes a sense for companies who have experienced a series of regulatory changes centering drug expenditure control. But, could it be that the companies are more concerned about risking lowered sales profit from their drugs with expired patent? Recently, a company refused to hand in a list of items with expired patent to trade off with a compensation for new drug pricing. The company presented a list of items with expired patent but expected to drop price due to expanded indication. It was basically the company turning down the trade-off offer. “We wonder if RSA is the only option. The current RSA regulation has expanded its subject scope recently, and yet the government is constantly reviewing other means of improving the system, including another expansion of subject. We need put everyone’s heads together for this problem”, a government official said. Surely, there is something wrong with foreign country’s external reference pricing creating uneasy tension and causing Korea Passing. But the multinational pharmaceutical companies are not selling designer bags or luxurious cars. And some drugs are actually priced higher in comparatively less developed country, or countries with weaker negotiation power. World Health Organization (WHO) convened ‘Fair Pricing Forum’ and adopted a resolution on “improving the transparency of markets for medicines, vaccines, and other health products”. What the global community strives to achieve with ‘drug pricing’ may differ from the multinational pharmaceutical companies. Korea Passing should never justify pharmaceutical companies trying to generate a loophole in the reimbursement listing system in Korea. We need to get a clearer view on the matter. Is there a certain headquarters passing the Korean market with a slightest inconvenience? Are executives and MA experts at Korean offshoots indeed trying to convince headquarters while they urge the government to amend regulation? They are some questions to ponder on. Another multinational company’s MA expert said, “It depends on pipelines, but each multinational company’s different nature has also affected Korea Passing. Government regulation should be improved, but it should be backed up by pharmaceutical industry’s effort as well”.
- Company
- PPC signs MOU with Clinerion to shorten clinical period
- by Eo, Yun-Ho Nov 29, 2019 06:32am
- Asia-specific CRO PPC (Protech Pharmaservices Corporation) recently signed an MOU with Clinerion, Switzerland, to shorten the time for clinical institution selection and patient registration. Through this partnership, PPC expects to use Clinerion's Patient Network Explorer platform to accelerate enrollment of subjects in global clinical trials in Korea, China and Taiwan. PPC will encourage hospitals to participate in Clinerion's Patient Network Explorer platform for Real World Data / Real World Evidence (RWD / RWE), which will have more global research opportunities. PPC is a CRO providing services related to Phase 1-4 clinical trials in Asia. In order to develop new products for pharmaceutical companies, we provide all services related to clinical trials (Project Management, Regulatory Affairs, Clinical Monitoring, Biostatistics, Data Management, Medical Writing, and Pharmacovigilance) with high quality in line with global standards. Clinerion uses the Patient Network Explorer platform to connect patients in hospitals with global networks to clinical trials conducted by pharmaceutical companies or researchers conducting research. The system is based on electronic health record (EHR) data, in which the individual patient is not identified, and the individual patient is not identified, thereby protecting the patient's personal information. Clinerion is also working with the Hospital Information System (P-HIS) Development Group to internationalize the next generation of HIS terminology and code standards, share precision medical data and know-how, AI-based knowledge services and related technology exchanges. Michael Stibilj, CEO of PPC Group, said, “We are pleased to provide our customers with a globally integrated subject registration service through the Patient Network Explorer platform. "We will have more opportunities to get involved, and patients will have easier access to new potential therapies." "We expect that increasing access to patient information for clinical trial registration will eventually speed up the clinical trial process and help us develop innovative products."
- Company
- GLP-1 diabetes, Trulicity runs at a high speed
- by An, Kyung-Jin Nov 28, 2019 10:45am
- Trulicity Once-weekly diabetes treatment, Trulicity, overwhelms the GLP-1 analog market. The company's annual sales are over ₩30 billion, exceeding ₩27 billion in nine months. The market grew to more than 98% with a single item, increasing the overall market size. According to the drug market research agency IQVIA on the 28th, Trulicity (Dulaglutide), Lyxumia(Lixisenatide), Victoza(Liraglutide) and Bayetta(Exenatide) Sales of four GLP-1 analogs, totaled ₩10.2 billon. That's a 35.8% increase over the same period last year. GLP-1 analogues are drugs developed using the GLP-1 (Glucago-Like Peptide-1) hormone, which is involved in blood glucose control in the body. GLP-1 hormone stimulates insulin secretion right after meals to lower blood sugar, and when blood sugar drops below a certain level, it reduces insulin secretion to help prevent hypoglycemia. Lilly's Trulicity, launched in 2016, dominates the market and leads the market expansion. Trulicity's revenue in the third quarter was ₩10 billion, up 38.4% YoY. Cumulative sales for the third quarter of this year amounted to ₩27.3billion. Trulicity is the only long-lasting drug administered once a week among GLP-1 analogues in Korea. Since its launch in 2016, Lilly Korea and Boryung Pharmaceuticals jointly sell. Quarterly GLP-1 Analogs Revenue and True Share Market Trend (Unit: ₩ million ,%, Source: IQVIA) Since its launch, Trulicity has established a monopoly in the GLP-1 analogue market, changing its sales record every quarter. Trulicity's sales, which totaled ₩1.4 billion in the first year, exceeded the ₩12 billion mark in the following year. In 2018, revenue was ₩2.2 billion , up 2.2 times from the previous year. This year, the company achieved its sales record set for last year in three quarters. Trulicity accounts for 98.4% of the total sales of the four GLP-1 analogs. It also contributed to the expansion of the GLP-1 analogue market. Quarterly sales of the three GLP-1 analogues, such as 'Victoza', 'Byetta' and 'Lyxumia', amounted to ₩3 billion , but the overall market expanded rapidly after launching Trulicity. It is 23 times larger than the ₩4.4 billion in the first quarter in 2016, just before the launch of Trulicity. Unlike conventional GLP-1 analogues, which had to be injected once or twice daily as a fast-acting mechanism, it was evaluated that the convenience of patients was improved by increasing the interval between injections once a week. In addition, GLP-1 analogues have been revised up in domestic and foreign diabetes care guidelines, and the baseline insulin and combination therapy received reimbursement recognition in late 2017. In contrast, GLP-1 analogs, administered once daily, continue to show negative sales. Sanofi's Lyxumia received a momentum of sales shortly after the launch of Trulicity. In the same period, Novo Nordisk's 'Victoza' and AstraZeneca's 'Byetta' sales were only ₩153 million and ₩35 million , respectively. This is in contrast to Saxenda, an obesity drug that uses only the same ingredients as Victoza, and recorded cumulative sales of ₩32 billion until the third quarter of this year. GLP-1 analogue 'ozempic (semaglutide)' by Novo Nordisk was approved by the US Food and Drug Administration (FDA) at the end of 2017 for the release. In last September, FDA approved Rybelsus which converts ozempil to oral use. but both products are still before permission in Korea.
- Company
- BMS-Celgene Korea promotes Kim Jinyoung as new CEO
- by Eo, Yun-Ho Nov 28, 2019 10:19am
- 김진영 대표 The decision has been made and it was a promotion from within. Kim Jinyoung (43), a former acting CEO, was appointed as the CEO of merged BMS-Celgene Korea. Kim used to serve as a Head of Legal and Compliance in BMS Korea, but was appointed as an acting CEO after former President Park Hye-sun (49) left the office. Kim had been active as the acting CEO up until recently. With the appointment of a new CEO in merged Korean office, the company is to initiate the integration process with Celgene soon. Including the headquarters, BMS and Celgene are in process of appointing new CEOs in respective regional offices. And those offices with new CEOs are also to immediately kick off the reorganization process. The new CEO at BMS-Celgene Korea, Kim Jinyoung majored in French literature at Ewha Womans University, and passed the New York State bar exam after studying at the Ohio State University Moritz College of Law. Beginning her pharmaceutical industry career as Legal Counsel at Pfizer Korea in 2009, Kim continued her path as Legal and Compliance Lead in Korea, Taiwan and Southeast Asia BMS from August, 2012 to May, 2019. As for BMS, the global pharmaceutical company has decided to acquire a U.S.-based biotechnology company Celgene for USD 74 billion (about 86.40 trillion won) in January this year.
- Company
- Ildong great likelihood to sell strongly 'Otrivin' by GSK
- by Jung, Hye-Jin Nov 28, 2019 06:14am
- Ildong pharmaceuticals has the most potential of otc vendor for 10 GSK items. It is possible that A distributor, Zuellig Pharma Korea will be charge of selling Lamisil. According to the industry on the 26th, GSK, Ildong Pharmaceuticals and Zuellig Pharma Korea are in the last negotiations over the right to sell 10 generic drugs. A retailer said, "Since last September, Ildong Pharmaceuticals is going to distribute GSK products. The industry has already begun. The preparations are almost finished". "Zuellig Pharma Korea has recently been added as a distributor and is in charge of selling Lamisil" he said. GSK and Ildong Pharmaceuticals said, "There is no confirmation yet". However, retailers and pharmacies believe that Ildong Pharmaceuticals was determined to be the main seller of 10 items. The 10 items to be negotiated are Lamisil, Otrivin, Voltaren, Nicotine-L, Theraflu, Sensodyne, Breathe right, Zantac, Polident, and Driclor. Among them, Lamisil is expected to be sold by Zuellig Pharma Korea and Ildong Pharmaceuticals to sell the remaining nine items. However, as negotiations are still underway, each company's products may change. In addition to Lamisil, it is likely that Zuellig Pharma Korea will be responsible for selling more products. An official at GSK said, "We can't formalize anything until the agreement is signed. Nothing has been decided yet." . An official of Ildong Pharmaceuticals said, "We cannot confirm when the contract is finalized. We will announce it after all contracts are concluded". Dong-wha Pharmaceuticals has distributed 10 GSK generic drugs. Originally, the copyright contract was until 2020, but the merger of GSK and Pfizer Healthcare prevented the company from maintaining its existing contract. Dong-wha Pharmaceuticals recently announced that it will end its generic drug supply contract with GSK on Dec 31. Dong-wha Pharmaceuticals is in the process of returning GSK products at pharmacies, and GSK is said to have almost stopped sending out 10 products to which the copyright is transferred. Next year, a new dealer will settle inventory with Dong-wha Pharmaceuticals before supplying the product.
- Company
- MA experts admit headquarters’ “Korea Passing” orders
- by Kim, Jin-Gu Nov 28, 2019 06:14am
- With one phenomenon, there are two interpretations. The government and pharmaceutical industry are showing polarizing views on the current situation and the cause of Korea Passing phenomenon. As if they are speaking in different languages, their prospective and proposed solutions are like parallel lines never crossing each other’s path. So what does pharmaceutical industry fear about in those two words of ‘Korea Passing’? Daily Pharm conducted a survey on 21 Market Access experts from respective affiliation to get a better look into what the industry is trying to convey. Korea Passing is not a myth, but a reality in global pharmaceutical companies First, the survey questionnaire asked if the experts have experienced Korea Passing either directly or indirectly. Except one response, 20 said they have experienced directly or have heard of it. For those have either experienced or heard of it, the survey questioned how many cases of Korea Passing they have come across with. Nine said one case, and other nine said two to three cases. Three answered five or more cases. The average was about 4.2 cases. Sorting by treatment type, chronic disease treatments faced Korea Passing the most with 12 cases (multiple responses allowed). Rare disease and anticancer treatments followed with ten and nine cases, respectively. Immune checkpoint inhibitor and infectious disease treatment each experienced once. So far, allergic asthma treatment Xolair, antidiabetic treatment Victoza, amyotrophic lateral sclerosis (ASL) treatment Radicut, and immunotherapy Obdivo have been mentioned the most when talking of Korea Passing. But the survey revealed more cases. It hinted that more Korea Passing phenomena are happening behind the scenes. "Headquarters ordered a withdrawal at pricing under certain point” The survey delved deeper into the phenomenon. Excluding indirect experience of the phenomenon from word of mouth, the questionnaire asked if they have received an order from global headquarters to drop application or negotiation with government body. 16 out of 21, or about 76 percent of the survey participants answered they have. 11 of them said there was one such case, and four said two or more cases. One did not answer. Apparently, the order was given for seven items before they applied for insurance reimbursement listing, eight during reimbursement feasibility evaluation, and four during drug pricing negotiation. On the details of the ‘order’ regarding Korea Passing, 13 answered the headquarters specifically mentioned the word “withdrawal” or “defer” during a meeting. One said their office was ordered to defer the Ministry of Food and Drug Safety (MFDS) approval application submission. Three items received an order to suspend reimbursement listing application submission, and other three got an order to postpone processing after applying for reimbursement listing Three answered they were given an order to pull out from negotiation when negotiating pricing went under certain price. Moreover, three said their headquarters ordered them to unilaterally withdraw from reimbursement listing. Not a specific order, but even six of the participants said they had to read between the headquarters’ message implying withdrawal or suspension during meetings. Taken at face value, there have been at least 16 cases where a global headquarters has given a direct order to either withdraw or suspend government processing. Multiple responses aside, the survey confirmed many of global headquarters are sensitive about pricing in Korea and also go as far as to directly give an order. All because of Korean government? Industry admits some of their contribution The participants suspected two major reasons were behind the Korea Passing phenomenon. 19 said drug pricing in different countries, and 16 said low reimbursed price in Korea, including multiple responses. Questionnaire asked once again to see if Korean government or pharmaceutical company played any part. None of them said pharmaceutical companies were either entirely or mostly responsible. However, six of them said it was entirely because of the Korean government. Majority of the participants, or ten of them said the Korean government is mostly responsible while pharmaceutical companies were also partially responsible. Five answered the companies and government were responsible 50/50. Majority of the participants, or 13 of them answered China played the biggest role in Korea Passing, as expected. Other regions like the Middle East, A7 countries and others were mentioned by ten, three and two participants, respectively. None of them said Australia. In fact, the industry has growing concern over the “China Risk” since last year. The Chinese government has been completely reforming its pharmaceutical insurance benefit policy for last two years. In the process, the government has decided to include Korea as one of their international reference pricing countries. Previously, the country has been referencing drug prices in Korea unofficially. But when China made it official was the tipping point for the global headquarters to make more drastic decisions. The point in time matches with right around when Korea Passing has become a social issue. Korean pharmaceutical industry is concerned of multinational drug maker headquarters making decisions to postpone or withdraw reimbursement listing application due to Chinese market. Besides China, the Middle East was also played a crucial role in Korea Passing. Among the Middle Eastern countries, Saudi Arabia is reportedly referencing Korean drug pricing. “The notion of Korea Passing is not that new. When Saudi government started referencing Korean pricing, the phenomenon occurred time to time. But it became as big of an issue, because the impact it bring is comparatively more detrimental than before”, an industry insider explained. “Especially after China officially added Korea as one of external reference pricing countries, the industry’s concern on Korea Passing has grown exponentially. Figures may not yet show the impact, but the influence has been substantial”, they added. All agree “Worried about future releases in Korea” All of the survey participants had a same answer for one part. They all agreed they currently have at least one item in risk of Korea Passing. Eight or the majority of them said there are two items. And it was followed by five answering one item, four saying three items, and one saying four, and three saying five to ten items. None of them said ten or more. Then what’s next for Korea Passing? Questioning about their views on the current administration capable of solving the issue, 14 of them answered negatively. Clearly, they are afraid of Korea Passing setting in over the time. But, six said the otherwise. Still some are positive the issue would get resolved, despite their serious concern about Korea Passing. They are hopeful the phenomenon is a temporary occurrence, and the Korean government and pharmaceutical industry would find a solution.
- Company
- Inflximab injection ‘Remsima SC’ good to go in EU
- by Lee, Seok-Jun Nov 27, 2019 11:06pm
- 사진은 램시마 정맥주사형. On Nov. 26, Celltrion announced its hypodermic injection Remsima SC got the green light from European authority. The injection was approved on indication of rheumatoid arthritis in 120 mg dose. Remsima SC is the first subcutaneous formulation of inflximab to have passed by the European regulator. Remsima SC would be available in 31 European countries for sales with the approval. Celltrion plans to extend its indication in the future for treating Crohn’s disease, ulcerative colitis, ankylosing spondylitis, psoriatic arthritis and psoriasis. Celltrion Healthcare, in charge of overseas marketing and distribution of Celltrion product, would be introducing Remsima SC across European markets.
- Company
- Handok has domestic copyright of Exelon & Trileptal
- by An, Kyung-Jin Nov 27, 2019 06:42am
- Exelon capsules Novartis Korea handed over copyrights of two neurology products including dementia medicine 'Exelon' to Handok pharmaceuticals. The intention is to organize copyrights for four medicines that were in charge of the department of neurology and concentrate sales marketing activities on the company's flagship products, including new products. According to the industry on Nov 26, Novartis Korea signed a domestic sales agreement for Alzheimer's dementia drug, 'Exelon' and anti-intermittent drug, 'Trepttal' with Handok pharmaceuticals. Handok will be in charge of sales activities next year, including the promotion of two products to medical staff and sales operational labor management. It is a condition that Novartis Korea continues to supply products while maintaining the license copyrights. The contract was made in accordance with the company's policy to clean up some of the drugs sold by the CNS department, including treatments for dementia, epilepsy and Parkinson's disease. The intention is to reduce the concentration of relatively unprofitable products and to focus sales marketing activities on the company's flagship products. It is said that the company will focus on promotion of SMA gene therapy drug named 'Zolgensma' and a follow-up product of Gilenia, 'ofatumumab' for relapsing multiple sclerosis. The CNS department in Novartis Korea's Specialty Pharmaceuticals Division, which was in charge of related products, was dissolved. Sales department employees in the department are in the process of transitioning to other departments. The anti-intervention drug 'Tegretol', except for two products signed by the copyright sale contract, will not be pushed forward. Novartis Korea has decided to continue supplying 'Tegretol' but will not deploy any promotion or sales marketing personnel. Parkinson's treatment drugs Stalevo and Comtan will continue to be available for the duration of the existing contract, as Novartis is not the original copyright holder, and will not renew the contract next year. An Novartis official said, “In the process of optimizing our product portfolio strategy, we decided to sell domestic sales marketing rights for some older products to Handok. It is the headquarters decision to increase the concentration of new drugs such as Zolgensma". "We're investigating departments wants to go for CNS staff and we're transitioning. Exelon and Trileptal have recorded prescription sales worth ₩10 billion as of last year. According to drug market researcher UBIST, In 2018, sales of outpatient prescriptions for `` Exelon '' and `` Trileptal '' are estimated at ₩1.7 billion and ₩8.2 billion, respectively. Both products received a six-month suspension from insurance payments for Aug 24 2017 ~ Feb 23 2018 due to illegal rebates for health care workers, which drastically reduced the size of prescriptions. In 2016, before the suspension of wages, the Exelon prescription dropped by 86.7% and 27.3%, respectively.
- Company
- Saxenda easily leads obesity market with KRW 32 bln by 3Q
- by Chon, Seung-Hyun Nov 27, 2019 06:41am
- Novo Nordisk’s Saxenda reaffirmed its unmatched leadership in obesity treatment market. Up to the third quarter this year, the treatment’s accumulated sales surpassed 30 billion won. And also Saxenda’s market share is stabilizing at over 30 percent. According to a pharmaceutical industry research firm IQVIA on Nov. 26, the overall obesity treatment market volume in the third quarter reached 35.4 billion won, about 45.4 percent increase from last year same time. In last two years, the obesity treatment market volume soared by 70 percent from 20.7 billion in the fourth quarter of 2017. Quarterly market volume trend in obesity treatment (Unit: KRW 100 million) Source: IQVIA Since its launch in Korean market, Saxenda has dominated the market and also seems to have elevated the overall market volume. In the third quarter, Saxenda made 11.9 billion won, a sevenfold growth from third quarter last year. Saxenda’s sales was more than a fivefold of Dietamins’, coming in second in the market. Saxenda generated accumulated sales amount of 32 billion won until the third quarter. Released in Korean market last year, Saxenda was the world’s first obesity treatment approved as a glucagon-like peptide 1 (GLP-1) analogue. The GLP-1 hormone is secreted by food intake and reaches activated neurons in brain to regulate appetite. Saxenda has a similar mechanism with the native GLP-1, and induces weight loss by suppressing appetite and food intake. Even before reaching the one year point, Saxenda generated 5.6 billion won in the fourth quarter last year and placed itself on the top of the market. The treatment has made at least 10 billion won each quarter this year. Saxenda and a diabetic treatment Victoza share the same active ingredient, liraglutide, but have different regimen and dosage. As Saxenda verified long-term use safety with Victoza and demonstrates similar mechanism as native hormone GLP-1, consumer’s high trust on the treatment would have affected the skyrocketing demand for it. Saxenda Saxenda’s market share in the overall obesity treatment market has shown steep increase. In the fourth quarter last year, its pie took up more than 20 percent, and in the first quarter this year, the pie expanded out to over 30 percent. By the last third quarter, the figure reached 33.7 percent. Following Saxenda’s strong lead, Daewoong Pharmaceutical’s Dietamin (2.5 billion won), Ildong Pharmaceutical’s Belviq (2.2 billion won), Huon’s Hutermine (1.6 billion won), Alvogen Korea’s Furing (1.3 billion won), and Huon’s Phendi (one billion won) have each generated over one billion won in the last quarter. However, their combined third quarter sales amount was about 8.6 billion won, far under Saxenda’s individual performance.
- Company
- Talking points on ‘Korea Passing’ in pharma industry
- by Eo, Yun-Ho Nov 27, 2019 06:36am
- The well-known expression ‘Korea Passing’, recently used to describe a phenomenon related to foreign affair discrepancies, does not mean the same in pharmaceutical industry. When it comes down to the Korean pharmaceutical industry, the expression does not indicate the U.S. and North Korea neglecting South Korea during the Korean peninsula nuclear talks. Rather, it indicates multinational pharmaceutical companies neglecting Korean market to protect certain level of pricing in other countries. This is why the South Korean health authority is offended by the industry using the expression, ‘Korea Passing’. However, there have been some clear signs of the phenomenon and a number of alarming cases has been reported. And the issue is around ‘drug’, a product that directly affects people’s health. Increasing number of ‘available but inaccessible drug’ is certainly an issue we need to be concerned of. ◆ The cause and irony of Korea Passing: ‘Drug price in Korea is low’. It’s agreeable to deduce the theory under a number of circumstances, but it cannot be defined as ‘truth’ at the moment. Despite the grievance, the industry also cannot exactly explain it. Countries around the world have different drug pricing systems according to respective calculation model. Tax, actual transaction price, retail price and many other factors play a part. As we are now in the day and age of high-cost drug, growing number of countries are adopting the dual pricing system. A research was criticized by the public because of it, as the research concluded ‘drug price in Korea is at around 45 percent of other OECD member countries’’. Of course, if a specific drug’s insurance listing in Korea has been delayed or withdrawn, then the reason is not because ‘the drug price was too high’. At least there is no doubt the drug price in Korea that more countries would refer to, is the black sheep multinational pharmaceutical companies want to keep it hidden. Multinational drug manufacturers point their fingers at Middle Eastern countries, Japan and even recently China as the biggest reason why Korea Passing is a relevant issue, because those countries take up significant pie in the overall international sales, but also refer to pricing in Korea. Then why are those countries peaking at drug pricing in Korea? It would be truer to say ‘because pricing is transparent’ instead of simply saying ‘pricing is low’. Under the single-payer health insurance system, or the National Health Insurance (NHI), Korean drug pricing system compares drug price with other alternative options, and conducts pharmacoeconomic analysis before a price for drug is set when listing the item on NHI. The system is surely convenient for other countries to use as a reference. Although the risk sharing agreement (RSA) system has been introduced, the ratio of dual pricing in Korea is comparatively lower. However, the actual volume of Korean pharmaceutical market is about 1.5 to 1.7 percent of the entire global market. Because of the transparent pricing system, multinational drug companies ironically started to neglect Korean market. And hence, the industry argues drug prices should be kepts undisclosed. In the same sense, some are demanding ratio of dual pricing should be increased with RSA subject expansion. A market access (MA) expert from a multinational pharmaceutical company stated “Each drug has different circumstances, but the Korean office is feeling the strain as increasing number of foreign countries are referring to drug pricing in Korea. Korea Passing is an issue that the Korean industry and government should talk and seek for solutions”. ◆ Not all Korea Passings are the same: Definitely, Korea should be concerned of and counteract to the Korea Passing phenomenon. But justification for each case should be thoroughly reviewed. The government cannot shrug shoulders every time when multinational companies pull out reimbursement application or give up on their reimbursement listing. For instance, Novartis’ allergic asthma treatment Xolair (omalizumab) is a typical example of Korea Passing the industry is complaining about. In December last year, Novartis pulled out Xolair from drug pricing negotiation with National Health Insurance Service (NHIS) when it was finally passed by Drug Reimbursement Evaluation Committee (DREC) under Health Insurance Review and Assessment Service (HIRA) after being approved in Korea for 11 long years. It was actually China triggering the company’s action. Right around then, China added Korea as one of external reference pricing countries. Novartis headquarters decided to avoid risk of lowering drug price in a market potentially 20 times bigger than Korean market. Some of the Korean industry people named the incident as ‘China Shock’. It wasn’t to say what was a righteous or justifiable. It was simply a good example of what the industry fears—a global company giving up on Korea for a bigger market. Within the business logic, it would be considered as a reasonable case of Korea Passing. However, another case with Mitsubishi Tanabe’s amyotrophic lateral sclerosis (ALS) treatment Radicut (edaravone) was different. The company suddenly withdrew application for refund type RSA on Radicut in last June. It was Canada this time. The refund type RSA was considered Korean industry’s solution to Korea Passing. Some are even arguing the refund type should be excluded from RSA types and shift it as a type of general insurance listing. Mitsubishi Tanabe gave up on listing the drug in Korea, because it was afraid drug price in Canada would be affected by labeled price and not by the actual transaction price. Labeled price is usually proposed by pharmaceutical company. In fact, many multinational companies have their Korean office to go through a process of conducting its own internal and external feasibility evaluation on the labeled price set with DREC, and reporting the result to the headquarters for their confirmation. During the process, the company also keeps track of drug listing schedule in other countries and the foreign country’s external reference pricing system as well. In May 2017, Canada announced it would add Korea on to their list of countries of external reference pricing, and enforced it from the beginning of this year. It was well-known news ever since the global company initiated a talk on RSA in Korea. And actually, Canada dropped Korea from its list recently. The case of Ono Pharmaceutical’s cancer immunotherapy Opdivo (nivolumab) was even worse. The item was listed as both refund and expenditure cap type RSA in August 2017, but the company technically gave up on the Korean market after the pre-negotiation on expanding reimbursed indication for lung cancer second-line therapy fell apart. The negotiation started from last year but it broke down in the first quarter of this year. The Korean health authority proposed for a renegotiation, but Ono Pharmaceutical refused. “The headquarters has made up their mind”, was their answer. A drug, listed with RSA and initially engaged in an indication expansion talk, refused to even negotiate. It was certainly not because of external reference pricing. Xolair, Raicut and Obdivo are all cases of Korea Passing. But they are all different. Xolair was a concerning case, but Radicut and Obdivo were not. They should rather be reprehended. “Without company’s will, there isn’t anything the government can do. The government is also internally reviewing various means to improve new drug accessibility. But a company unilaterally announcing withdrawal of listing and blaming everything on the government is unacceptable”, said Ministry of Health and Welfare official.
