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- 2025-12-19 19:40:50
- Opinion
- [Reporter’s View] HIRA's role in managing high-priced drugs
- by Kim, Jin-Gu Jan 15, 2024 05:36am
- In 2012, Soliris, a treatment for paroxysmal nocturnal hemoglobinuria (PNH), was listed for reimbursement in Korea. The drug, which cost more than KRW 5 million per vial and up to KRW 500 million for a year's supply, sparked controversy over "ultra-high-priced drugs” at the time. Since then, drugs more expensive than Soliris were introduced and reimbursed one after another. Novartis' Kymriah and Zolgensma were two representative examples. Zolgensma is listed at KRW 1.982 billion per kit, and Kymriah at KRW 360 million per treatment. Although the number of doses required per drug varies, as of the end of last year, a total of 26 drugs cost more per unit than Soliris. Among them, Biogen's ‘Spinraza,’ Novartis' ‘Lutathera,’ AstraZeneca's ‘Ultomiris,’ BMS' ‘Yervoy,’ Anterogen’s 'Cupistem,’ JW Pharmaceutical's ‘Hemlibra,’ Pfizer's ‘Besponsa,’ Anterogen’s ‘Remodulin,’ and Sanofi-Aventis' ‘Lemtrada’ cost more than KRW 10 million per unit. Truly, the era of ultra-high-priced drugs has arrived. Moreover, drugs that far exceed the price of Zolgensma are awaiting entry in Korea. Lyfgenia, a treatment for sickle cell anemia that was approved by the U.S. Food and Drug Administration (FDA) in December last year, has a price tag of USD 3.1 million (KRW 4.1 billion). ‘Casgevy’ and ‘Exa-cel,’ which were approved around the same time, cost $USD 2.2 million (around KRW 2.9 billion) each. And many other drugs that cost more than USD 1 million are yet to be introduced to Korea. The hemophilia B treatment ‘Hemgenix’ costs USD 3.5 million, the cerebral adrenoleukodystropha treatment ‘Skysona’ costs USD 3 million, the beta-thalassemia treatment ‘Zynteglo’ costs USD 2.8 million, the leptin deficiency treatment ‘Myalept’ costs USD 1.26 million, and Hutchinson-Gilford progeria syndrome treatment Zokinvy costs USD 1.07 million. Most of these are 'one-shot drugs' that treat diseases caused by genetic abnormalities. Given the development speed and recent advances in gene editing technology, industry experts say it is only a matter of time before more expensive drugs appear. The annual cost of KRW 500 million, which was astronomical at the time of Soliris’s introduction, now falls in the ‘modest’ range among ultra-high-priced drugs. The government is also expressing significant concerns over the issue. Earlier this year, the Health Insurance Review and Assessment Service set up a ‘Pharmaceutical Performance Evaluation Department’ dedicated to the post-listing management of high-priced drugs. It took over the duties of the New Drug Performance Management Division, which was established as a temporary organization under the Office of Benefits Management in September 2022. For now, the office is in charge of evaluating the performance of high-priced drugs such as Kymriah and Zolgensma but will expand its responsibilities to include post-listing management of drugs that are exempt from submitting pharmacoeconomic evaluation data. This seems to be a timely move in the era of ultra-high-priced drugs. It's time to prepare for the next step. Given that drugs even more expensive than Zolgensma are expected to be introduced into Korea in the future, one single department, however, dedicated, may not be enough to take on the responsibility of managing all of the listed high-priced drugs. The changes to come call for a more fundamental reorganization of the system. The number of drugs listed through tracks that do not require pharmacoeconomic evaluation, which is the basis of Korea’s health insurance reimbursement system, is increasing every year. However, due to limited health insurance finances, it is impossible to blindly allow the listing of all ultra-high-priced drugs. We need to prepare for the entry of another wave of ultra-high-priced drugs, including the establishment of a separate fund, which is just beginning to be discussed. Korea eagerly awaits the establishment of a new system that can receive public consensus.
- Opinion
- [Reporter's View] GOV takes measures to stabilize supply
- by Lee, Hye-Kyung Jan 11, 2024 05:45am
- To resolve the issue of medicines supply instability, the government has announced a plan to conduct a field investigation of pharmacies and hospitals that engage in stockpiling of drugs, in collaboration with a local government starting in January. This is the government’s first active involvement in checking nursing homes and taking administrative measures. In March of last year, a public-private consultative body was established, comprised of the Ministry of Health and Welfare (MOHW), the Ministry of Food and Drug Safety (MFDS), the Korean Disease Control and Prevention Agency (KDCA), the Korean Medical Association, Korea Pharmaceutical and Bio-Pharma Manufacturers Association (KPBMA), the Korea Pharmaceutical Distribution Association (KPDA), the Korean Society of Health-system Pharmacists. The decision to investigate stockpiling in nursing homes was made during a meeting held in September last year. The items to be investigated include Sam Il’s ‘Sudafed tab.’ and Sama Pharm’s ‘Setopen suspension,’ and the criteria for categorizing purchases as stockpiling have been defined as cases where the claimed amount (usage) was less than 25% after purchasing. Notably, there have been 40 instances where medical institutions have acquired cold medicines with 0% recorded usage. In response, the government has chosen to examine these cases during the field investigation to see if indeed they were stockpiling. However, a few pharmacies have criticized the government for intervening with purchasing practices ahead of prescription. According to the government, drug shortages have historically been a recurring issue in many countries, regardless of their income levels. However, when addressing medicines of supply instability, such as common cold medicines, which are non-essential but can cause inconvenience when unavailable during the simultaneous outbreak of various respiratory diseases, even with increased production by pharmaceutical companies, government intervention may become necessary. Until now, several measures have been implemented to address the supply shortage. For six ingredients such as 'acetaminophen' and 'pseudoephedrine,' the government raised drug prices conditionally, and for twelve ingredients such as 'mifepristone' and 'cefpodoxime proxetil,' pharmaceutical companies were encouraged for production and provided with administrative support for raw materials. Following their request for cooperation in prescribing alternative medications to enhance demand management and minimize distribution disparities while ensuring fair access to drugs, the government has launched an investigation into stockpiling practices. In November last year, the list of national essential medicines was expanded to include seven products with six ingredients for pediatric drugs, including acetaminophen syrup. Over the past year, various measures, including the establishment of a public-private consultative body, have been prepared for drug supply stabilization. This year, taking suggestions from the meeting, it is crucial to establish a system aimed at preventing drug shortages. In addition, there should be a discussion about a follow-up plan. Waiting until major disruptions in drug supply occur would be too late. It appears that frequent surveys of supply shortages of drugs may be needed. Starting this year, the government plans to raise the prices of unprofitable drugs, extending a measure that was initially introduced last year for supply shortages of drugs. There is an expectation that these various measures will function effectively to address the drug supply issue. This year, we should see a decrease in instances where people ‘hop from one pharmacy to another in search of medicines.’
- Opinion
- [Reporter’s View] Be generous and provide tangible benefits
- by Eo, Yun-Ho Jan 10, 2024 05:42am
- Expectations of pharmaceutical companies that own new drugs have been rising in the light of the new year. The reason for this is the ‘Plan for Appropriate Compensation of the Innovative Value of New Drugs' that the government announced at the end of last year. According to the announcement, the government will grant reimbursement for innovative new drugs that have recognized innovativeness even if their economic feasibility exceeds that of the ICER threshold, an economic evaluation indicator. The criteria for innovativeness are those that satisfy all of the following conditions: a drug ▲ with no substitute or therapeutically equivalent product or treatment ▲ that demonstrated clinically meaningful improvement, such as a significant extension in survival, and ▲ has been approved by the Ministry of Food and Drug Safety through GIFT or received a breakthrough therapy designation (BTD) by the US FDA or a priority review (PRIME) by the European Union’s EMA. All three conditions must be met to qualify as an innovative drug. Although there is no documented figure, it is generally accepted that the ICER threshold for insurance reimbursement is KRW 50 million in Korea. Even drugs whose ICER value is KRW 50 million are rarely listed. In other words, the government announced that it will apply a flexible ICER threshold for drugs designated as an innovative new drug and satisfy all the conditions above, allowing such drugs an easy pass across the economic evaluation hurdle. This flexible application of the ICER threshold has been the industry’s greatest desire for some time. But there are also concerns over the large disappointment the high expectations may bring. If the actual increase in the threshold is less than expected, the pharmacoeconomic evaluations will still be a serious hurdle. If the KRW 50 million threshold, which was rarely applied, just becomes the norm, or the threshold is only increased by around KRW 5 million to KRW 10 million, their actual benefit will be minimal. This is not for all drugs, but just the innovative new drugs that meet all of the three conditions above. In fact, even if the threshold is raised by KRW 20 to KRW 30 million, the pharmaceutical industry may still long for a larger benefit. This will be especially true for drugs that have shown too much clinical improvement compared to existing drugs to demonstrate cost-effectiveness, i.e., drugs that are likely to be designated an innovative new drug. And these drugs will only increase in the future. As the government has already expressed its willingness to provide benefits, it would have devised a practical system to implement this year. All this reporter would like to ask of is, to be generous when giving out benefits. We know that the government is devising measures to cut costs along with measures that provide preferential treatment, therefore, all we ask is for the government to provide clear and generous benefits in areas it already decided to do so.
- Opinion
- [Reporter's View] No regulatory innovation, no future
- by Son, Hyung-Min Jan 08, 2024 06:09am
- The importance of Decentralized Clinical Trials (DCT) through digital biomarkers in developing digital therapeutics (DTx) is gaining attention. Biomarkers are usually indicators used to detect changes within one’s body, using proteins, DNA, RNA, metabolites, etc. Digital biomarkers are an extension of this concept and refer to biomarkers collected using digital technologies. Digital biomarkers are used for DCT, as they enable remote monitoring and treatment of patients. It offers the advantage of enabling patient recruitment via website and mobile channels in addition to the traditional offline recruitment, to maximize recruitment speed and participation rates in clinical trials. Unlike how DCT is being more and more widely used around the world, it is relatively less used in Korea. From 2019 to 2022, only 1.1% of multinational clinical studies conducted in Korea utilized DCT. In the UK, the rate was 14.6% during the same period. It's no secret why DCT is underutilized in Korea. This is due to the strict regulations set on the use of personal information for telemedicine and access to electronic medical records (EMR) in Korea. Although the pharmaceutical and IT industries and clinical trial-related organizations agree on the need to use DCT, they are having difficulty with its implementation due to the strict regulations. There are already DCT guidelines established in Europe and the United States. Since 2021, some countries in Europe have issued DCT guidelines, and in 2023, the U.S. Food and Drug Administration (FDA) released its draft guidance, called ‘Decentralized Clinical Trials for Drugs, Biological Products, and Devices.’ As such, countries overseas have already been creating an environment where patients may participate in clinical trials without visiting medical institutions. The pharmaceutical and bio industry invests astronomical amounts of money in clinical trials despite its little probability of success. The longer the clinical trial process takes, the more expensive the new drug development becomes. It's not as if the industry can just wait for new technologies to emerge without making changes. The shift from randomized controlled trials (RCTs) to DCTs will not only provide accurate medical information but also reduce costs. To foster an advanced medical environment, clear guidelines will need to be set for clinical trials, including the use of digital therapeutics. Only bold regulatory innovations made by the government will be able to advance the development of the digital healthcare industry to the next level.
- Opinion
- [Reporter’s view] Expanded catastrophic medical expenses
- by Lee, Hye-Kyung Dec 22, 2023 05:47am
- Among foreigners, the saying, "If you are ill, you should go to Korea," had once become a trend. Foreigners that stay in the country for over 6 months are eligible for the National Health Insurance subscription as a local subscriber, allowing them to receive reimbursement benefits. This issue has been a topic of heated debate during the annual National Assembly audit. As a result, the National Health Insurance Service (NHIS) has been implementing safety measures every year to prevent foreigners from freeloading on Korea's National Health Insurance. For foreigners, the National Health Insurance is a cost-effective benefit, but there are Korean citizens who cannot afford medical bills even with the National Health Insurance coverage. In the past, when the cost coverage was not high enough, medical bills used to be one of the top three causes of household bankruptcy. In Korea, many citizens still subscribe to private health insurance. Starting in the early 2000s, there was a movement with the initiative "Single-payer healthcare: all medical fees to be covered by National Health Insurance," but it was often seen as an empty slogan. In response, the government introduced measures to alleviate the financial burden on the people. These measures included the introduction of the copayment maximum in 2004, the special assessment for cancer, cerebrovascular disease, and heart disease in 2005, and the implementation of the Catastrophic Medical Expenses Support Program in 2013. The Catastrophic Medical Expenses Support Program is designed to alleviate the burden of medical fees on households facing excessive expenses, and its insurance coverage is expanding. At a recent cabinet meeting, the partial amendment to the "Enforcement Decree for the Catastrophic Medical Expenses Support Program," was approved. Starting on January 1st, 2024, the Catastrophic Medical Expenses Support Program will be expanded to include all medical conditions that occurred within one year prior to the final inpatient or outpatient treatment. Prior to the revision, the previous system combined all medical expenses for inpatient care, but for outpatient care, it only considered expenses for the same disease, and application was restricted to the six major severe diseases. Even if the total medical expenses for the entire year reached the standard for the Catastrophic Medical Expenses Support Program, there were situations where support could not be provided because the standard was not met for the same diseases alone. Starting next year, with the expansion that includes all diseases, reimbursement for catastrophic medical expenses can be claimed if the total medical expenses for all conditions exceed 4.1 million won. Previously, a four-person household earning 100% of the median income could only apply for support if medical expenses for the same condition exceeded 5.9 million won. However, lowering the standard means that more people will be able to benefit from catastrophic medical expense support. The Catastrophic Medical Expenses Support Program is designed to prevent households from facing financial disaster due to medical expenses. Questions have arisen regarding the implementation of reimbursement for all types of diseases, including non-reimbursement and total copay, selective reimbursement, implants for those aged 65 and older, double and triple room hospitalization fees, Chuna manual therapy, and senior dentures, based on income levels. The National Health Insurance system was established to enhance the quality of national healthcare and improve social security. To ensure that people do not have to worry about medical expenses, catastrophic medical expenses coverage should be expanded to include all diseases could serve as a significant step toward the establishment of a single-payer healthcare system.
- Opinion
- [Reporter’s view] Dilemma of compassionate use
- by Son, Hyung-Min Dec 20, 2023 05:41am
- Recently, certain global pharmaceutical companies have decided to discontinue compassionate use of its drugs, which permits patients access to investigational drugs, following the official approval of these drugs in Korea.. Consequently, patients without alternative treatment options are left with no choice but to obtain the drugs at a non-reimbursed price, despite the effectiveness of the treatment. The Ministry of Food and Drug Safety (MFDS) permits an ‘approval system for compassionate use of investigational drugs,’ which is intended for patients with a serious or life-threatening disease or condition, particularly in cases where no alternative treatment options is available. The system is designed to allow patients to access therapeutic drugs, often referred to as “off-label” (prior to receiving official approval for prescription) drugs, typically in situations where there are no other treatment options available. However, there are cases where pharmaceutical companies discontinue compassionate use of drugs once the drugs are officially approved or receive expanded indications. Recently, Norvatis announced that they are discontinuing the supply of two drugs, Rafinlar (dabrafenib) and Meqsel (trametinib), on a compassionate basis for patients with BRAF-positive solid tumors excluding lung cancer. The two drugs were granted approval for the treatment of BRAF-mutation positive malignant melanoma and non-small cell lung cancer. Until now, the two drugs were provided on a compassionate basis to patients with BRAF-mutation positive solid tumors that had no comparable or alternative treatment options available. On the 15th of last month, the combination therapy of Rafinlar and Meqsel received an expanded indication for the treatment of unresectable or metastatic BRAF V600 mutation-positive melanoma. Novartis has stated that due to this updated indication, they are no longer able to supply the drugs for compassionate use. In response, some medical professionals have strongly lodged a complaint against Novartis. Novartis has recently extended the supply of the drug for an additional 6 months, but they have not provided any information regarding the supply of the drug after the specified period ends. There are more cases like Novartis’s. Pfizer, for example, tried to discontinue compassionate use of Lorviqua (lorlatinib), which has shown effectiveness in ALK and ROS1 mutation-positive non-small cell lung cancer, following official approval in Korea in 2021. However, in response to the continued requests from medical professionals, Pfizer reversed its decision to discontinue compassionate supply of the medication. Medical professionals argue that it is unethical to stop supplying compassionate use of drugs to patients without alternative treatment options. Since global pharmaceutical companies put emphasis on social responsibility and on serving the community’s best interests, they should continue providing these drugs as a moral obligation. It's not entirely unreasonable from the pharmaceutical company's perspective. Since pharmaceutical companies have provided the medication off-label, it's understandable that once the treatment is officially approved, patients should follow the approved procedures. However, instead of abruptly transitioning to non-reimbursed administration, it might be more appropriate to establish a grace period through mutual agreement. Corporate social responsibility to serve their community doesn't always involve grand gestures. It's the behind-the-scenes efforts that can make a significant impact on fulfilling the needs of the patients.
- Opinion
- [Reporter's view] Bothered by the PE exemption system
- by Eo, Yun-Ho Dec 20, 2023 05:40am
- The pharmacoeconomic evaluation exemption system is receiving much scrutiny. Under the pretense of improving the system, there are growing voices in favor of reducing of the system, supporting its reduced and limited application. These discussions reached culmination in a session titled, ‘On improving the pharmacoeconomic evaluation exemption system’ held during a symposium by the Korean Association of Health Technology Assessment (KAHTA). At the symposium, Professor Sojeong Hwang from the Seoul National University Graduate School of Public Health gave a presentation titled 'Research on the improvement of the cost-effectiveness evaluation waiver system for drugs (current status and evaluation).’ The presentation covered various topics, including the history of cost-effectiveness evaluation-related systems and regulations, the evaluation status of drugs up to Sept. 2023, and the consequences of the system. According to the presentation, the number of drugs that have been reimbursed via the PE exemption track has been increasing. As of November, a total of 33 ingredients have received reimbursement via the PE exmption pathway. Professor SeungJin Bae from the College of Pharmacy at Ewha Womans University presented opinions gathered from a Focus Group Interview (FGI) involving 29 participants, including pharmaceutical industry representatives, patient and civic organizations, government officials, policy experts, and clinical specialists. The results of the FGI indicated that most stakeholders, except for pharmaceutical industry representatives, favored implementation of 'deferred cost-effectiveness evaluation' system, such as downscaling the cost-effectiveness evaluation waiver system and post-evaluation data submission, to strengthen management. In other words, the growing cost and number of patients receiving the drugs exempt from subimtting PE results have increased financial burden. Therefore, it may be necessary to consider measures to defer PE evaluations rather than merely reducing it or exempting certain drugs from conducting it completely. The PE data waiver system, also known as the PE exemption system, is the only way for drugs that have difficulties presenting evidence on their cost-effectiveness but is necessary to receive reimbursement. It has incorporated various fiscal control methods and ‘limited total cost’ design in place from the beginning. In reality, the industry contends that the existing system already presents significant barriers, and that there has been a persistent call for its expansion. Interestingly, the data presented at the symposium have shown that only six ingredients included in the PE exemptions were for orphan drugs. The drugs that received PE exemptions were often intended for 'extremely rare diseases.' As a result, most stakeholders agreed that treatments for rare diseases, which are challenging to generate evidence for, should be included in the PE exemption system. One key criterion for PE exemptions that the drug is used for 'life-threatening level of serious diseases.' However, most rare diseases, instead of being immediately life-threatening, are characterized by causing lifelong suffering, which makes it challenging to meet this exemption condition. Only at the beginning of this year, efforts were made to address this limitation by expanding the waiver system to drugs proven to improve the quality of life, but this expansion was limited to pediatrics. The ongoing discussions involve the flexible application of the ICER and the consideration of social benefits in economic evaluations. Simultaneously, there is a growing list of high-priced new drugs with clinical data incomparable to existing treatments. This situation has led to a slowdown in the pace of reimbursement listing in South Korea. Among the 60 pharmaceuticals awaiting reimbursement listing after being designated as orphan drugs in Korea, 46% have already listed for reimbursement in at least five of the A8 countries. The drugs that have been listed in all A8 countries were represented by four indredients. One or more of those four indredients are currently under review by the Health Insurance Review and Assessment Service (HIRA). However, despite being designated for extremely rare diseases, some of these indredients do not meet the standard for PE exemptions. Maintaining a balance is crucial. The government is already devising financial savings plans by implementing measures to lower drug prices, such as re-evaluating drug prices based on international standards and revising the volume-price contract. Such improvement may be deemed necessary due to the increasing number of subject drugs under the system. In fact, the PE exemption system does serve as a ‘breathing space’ within the reimbursement listing system in Korea. If the authorities seek to narrow down this system, another breathing space should first be put in place.
- Opinion
- [Reporter’s view] On improving self-sufficiency of APIs
- by Kim, Jin-Gu Dec 18, 2023 05:31am
- The government said it has planned to lower reliance on imports of cutting-edge parts and raw materials from foreign countries to below 50%. The Ministry of Trade, Industry, and Energy (MOTIE) recently announced a ‘3050 strategy for the industry supply chain,’ which aims to lower the reliance on imports from any single foreign country for 185 key categories that are utilized in semi-conductor, secondary battery, and automobiles to below 50% by 2030. This strategy is intended to eradicate the root of the problem amid recent concerns about the ‘shortage of urea solution.’ In the bio-category, items such as biological media, biomedicines, and disposable bags were included. However, active pharmaceutical ingredients were not included in this category because the selected items for the bio-category were mainly materials, parts, and equipment. However, the pharmaceutical industry is pointing out that the rationale behind the current policy is closely related to the domestic API situation in Korea. The problem is that Korea’s reliance on foreign raw materials is extremely high, particularly from a single country such as China. This situation is the same for APIs. Korea’s self-sufficiency rate of APIs is low, with growing reliance on imports from China. In fact, according to the Ministry of Food and Drug Safety (MFDS), Korea's self-sufficiency rate for APIs had been merely 24.4% in2021. Since 2008, Korea's self-sufficiency rate remains at 20% on average. By country, Korea has improted the most from China, worth a total of $740.23 million (approximately 950 billion won) in 2021 alone. This amount is over three times higher than the imports made from the second-highest country, India, which totaled at $225.35 million. Similar to the urea situation, if the supply of APIs from China to Korea is blocked somehow, it would well hinder the production and supply of the finished drugs as well. Depending on circumstances, this could worsen the issues like the repeated shortage of acetaminophen-based cold medicines that arose this year. However, despite the suggestions that have been made on the necessity to increase the self-sufficiency of domestic raw material drugs, no specific aim has been set to resolve the self-sufficiency issue. Additionally, there is a lack of social consensus on the level of self-sufficiency that would be deemed adequate. Specifically, discussions on which and how much API should be produced is needed. Currently, only statistics regarding the domestic production volume and the amount and country of origin for imported rAPIS are available. Statistics on which APIs are being produced domestically and which are imported from foreign countries are not available. Due to the current circumstances, Korea's response has been limited to implementing countermeasures, like assigning a task force if any issues emerge. There are systems in place that designate drugs as national essential medicines or shortage prevention drugs; however, these systems pertain to finished drugs, so it does not directly address the self-sufficiency rate of APIs. Although there are calls to increase the self-sufficiency rate of raw material drugs, no substantial progress has been made for its implementation. Therefore, a policy with a clear goal needs to be set by identifying specific APIs that need domestic production, understanding the level of reliance on foreign sources for these materials, and evaluating the practicality of achieving domestic self-sufficiency, among others. A potential strategy could be for the Ministry of Health and Welfare (MOHW) to lead the process by designating essential APIs, akin to how the MOTIE designated 185 key industrial materials. Furthermore, pharmaceutical companies should receive incentives for utilizing domestic APIs over cheaper alternatives from China. Additionally, when domestic APIs used, the companies should be eligible for broader preferential drug pricing and extended duration than existing standards.
- Opinion
- [Reporter’s View] Amid hopes for K-drugs, beware
- by Eo, Yun-Ho Dec 13, 2023 05:38am
- It is not only the patients that are now interested in the research and development of new drugs. The interest in high-value-added industry and aspirations for the development of the domestic industry has never been hotter. Industry development is good. New drugs? Even better. However, the rise of the stock market bubble that stirs investment interest in the sector is potentially detrimental to the advancement and success of the industry and new drug discovery. New drug development would not have risen as a trend if it was easy. Due to rising interest in Korea's biopharmaceutical industry grows, information about the pharmaceutical industries’ clinical trial failures, discontinuation, or efficacy issues are being constantly covered online. When successful, reports on these clinical trials make it into the headline news. The current trend is understandable. Biosimilars from companies like Samsung and Celltrion are increasingly gaining recognition in the US and Europe, and the Korean government is coming up with a favorable drug pricing policy for domestically produced new drugs, based on the government's premise of devising a measure to foster the biopharmaceutical industry. Let’s get one thing clear. Suceeding in new drug development is far from easy. According to an analysis conducted by the Biotechnology Innovation Organization (BIO) in the US, which examined data from 9,985 clinical trials either completed or underway by the U.S. Food and Drug Administration (FDA) from 2006 to 2015, the success rates were 63.2% for Phase 1, 30.7% for Phase 2, and 58.1% for Phase 3 clinical trials. When these rates are calculated to determine the probability of a new drug reaching the commercialization stage, the number renders to a mere 9.6%. Development discontinuation and clinical trial failures in the pharmaceutical industry are common; it would rather be odder if they didn't occur. However, the issue lies in transparency. It's a fact that numerous pharmaceutical companies have jumped on the new drug development bandwagon, trying to take advantage of the rising tide. Clinical data on candidate substances and presentations made at international conferences are being often distributed indiscriminately without adequate drug information. Its phrases, "shows superior effectiveness compared to drug X," "the first treatment for X cancer," or "significantly improves survival duration," seem to be primarily aimed at influencing investor psychology, Such headlines do seem attractive, but the articles frequently lack basis. Detailed information, such as the number of patients involved in clinical trials, the duration of the research, and quantitative data from comparing different cohorts on the drug's effectiveness and safety, are not provided. Moreover, drug descriptions are frequently oversimplified to terms like ‘good drug’ stated by a company personnel. Keep in mind that drug discovery is science and has patients as the end-customers. Any success in new drug development by Korean companies are encouraging news. Therefore, other companies should embrace the transparency and open up information for a fair evaluation. They must stop worrying about IR (Investor Relations). Just as they addressed the rebate issue, it is now the time for the companies to dispel any doubts about stock price manipulations.
- Opinion
- [Reporter’s View] CSO is a double-edged sword
- by Kim, Jin-Gu Dec 07, 2023 05:47am
- Over the past few years, small mid-sized pharmaceutical companies and contract sales organizations (CSOS) have developed a strong symbiotic relationship. Small and mid-sized pharmaceutical companies have provided work for CSOs, and CSOs have repaid the companies by improving their performance. Due to this, many companies, especially small- and mid-sized companies, have partnered with CSOs. Over the past few years, CSOs have become "the trend" for small- and mid-sized pharma companies, as their performance varied depending on whether they used CSOs. Also, CSOs have expanded their role by specializing in sales for specific products or regions. They have been praised for improving cost-effectiveness and profitability through flexible sales activities, but they have also been criticized that it has become a ‘breeding ground for rebates.’ It was constantly pointed out that CSOs were being utilized as a rebate delivery channel, hiding in the blind spots of the system. Then, the CSO Reporting System emerged to address this issue. A bill to amend the Pharmaceutical Affairs Act to require CSOs to report to the government and local governments passed the National Assembly in the first half of this year. The revised Pharmaceutical Affairs Act will come into effect on October 19 next year Once implemented, the government will be able to hold pharmaceutical companies that signed contract sales agreements with CSOs accountable for the CSO’s deviant activities. This means when rebates are made, not only the CSO but also the pharmaceutical company involved could be criminally punished as an "accomplice". Even if the company avoids criminal penalties, it will be difficult to avoid administrative penalties because criminal penalties and administrative penalties are imposed separately. The administrative penalty imposed on a Korean pharmaceutical company that was finalized in July this year is a good example. Although the company was acquitted by the prosecution due to insufficient evidence for the rebate case that was discovered in 2016, the Supreme Court made the final ruling to impose a 3-month suspension on the sales of 14 items. Therefore, cases of rebates made through CSOs may also be judged similarly. Even if the companies avoid criminal penalties, they may still face strong administrative penalties. Moreover, if multiple rebate cases are found at the same time, the administrative penalties may be accrued or raised. For small- and mid-sized pharmaceutical companies, such rulings will be a hard blow. In this sense, CSOs are now a double-edged sword for small- and mid-sized pharmaceutical companies. They can improve performance but the companies will have to also bear the risk. The time has come for pharmaceutical companies that have already built a symbiotic relationship with CSOs to make a choice. Will the companies continue to work with CSOs that deliver high performance, or reduce the role of CSOs to mitigate risk? The companies will need to make their decision quickly, as just over 10 months remain until the CSO reporting system comes into effect.
