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- 2025-12-18 02:11:33
- Opinion
- [Reporter's View] Prescribing pre-reviewed new drugs
- by Eo, Yun-Ho Apr 30, 2025 06:06am
- New drugs that patients long-awaited are being reimbursed, but no hospitals are prescribing them. There have been various attempts at improving the system, but an issue related to new drug access remains unresolved in South Korea. Public petitions for reimbursement of a particular new drug are frequently listed, and more patient organizations are gathering petition signatures. Yet, new drugs that successfully overcome challenges to be listed often are not prescribed at hospitals even though there are no prescription requirements, often mandated for gene therapies, for these drugs. Although these are first-in-class drugs and quality for reimbursement, there are only a handful of drugs that become prescribed at medical institutes throughout the country half a year after inclusion to the reimbursement list. This often occurs because hospitals tend to be afraid of being responsible for high-cost drugs after administration of such drugs upon doctor's advice and having the risk of insurance deduction. Distributing companies often contribute to this matter. During the process of distribution, loss results in substantial financial loss. Many of these cases involve drugs that have undergone a pre-review system for reimbursement. The 'pre-review' system processes the appropriateness of reimbursement for high-cost orphan drugs before authorization. It has been established to consider strengthening patient drug access and protecting National Health Insurance finance. It conducts both pre-reviews of determining the appropriate patient pool and continuance of administration after approval through pre-review. In other words, especially for high-cost drugs, the system offers a pre-review to determine whether a drug is deemed reimbursable. Drugs that underwent pre-review can be prescribed during an emergency and under a doctor's advice. The problem is that the drug has been administered but is deemed not reimbursable afterward. It does not mean that hospitals and distributors must endure losses. However, these drugs have been added to the reimbursement list after substantial efforts and demands. Hospitals and distributors need to collaborate on the issue of 'risk-sharing.' These drugs entered the system after meeting the criteria for at least two types of risk-sharing agreement (RSAs). There is no time to hesitate, and we must find a solution.
- Opinion
- [Reporter's View] Enhanced GMP reg for sterile drug products
- by Lee, Hye-Kyung Apr 28, 2025 05:55am
- Starting December 27, production·good manufacturing practices (GMP) regulations for sterile medicinal products produced by aseptic processing will be strengthened. The Ministry of Food and Drug Safety (MFDS) amended the 'Regulations on Good Manufacturing Practices (GMP) for Medicinal Products' in 2023. The revision had been conducted to modify the production·good manufacturing practices (GMP) regulations for sterile medicinal products following the Pharmaceutical Inspection Convention (PIC) and the Pharmaceutical Inspection Co-operation Scheme (PIC/S) ahead of the reevaluation by the PIC/S. The guidelines state the establishment of contaminant management methods through GMP regulations and the latest sterile manufacturing equipment and technology. However, considering all pharmaceutical companies to have adequate preparation time to establish contaminant management methods, the MFDS announced the implementation of the regulations on sterile medicinal products two years after the notification. Companies must establish a contaminant management strategy for sterile medicinal products starting in December and undergo risk assessment for PIC/S regulations and gap analysis. To accomplish these tasks, manufacturing plants' divisions must begin working together 1-2 years before implementing the regulations. Research and related technology investments are needed to prepare for the 'Pre-Use Post Sterilization Integrity Testing (PUPSIT).' Until now, manufacturing companies that have not established contaminant management strategies will not be able to meet the standards for strengthened GMP measures starting in December. Due to this update, manufacturing companies with old manufacturing equipment announced suspending their productions. Several companies, including Pharma I, Pharma B, Pharma G, Pharma D, Pharma A, and Pharma K, have reported to the MFDS. These companies anticipated replacing old equipment following the PIC/S would cost billions in Korean won. Therefore, they resorted to switching to CMO and discontinuing injectable line facilities that do not generate profits compared to investments due to low reimbursement ceiling caps. In fact, there were calls for facility investment costs and pricing support even during the briefings held for manufacturers ahead of the revision of the sterile medicinal products GMP regulation. However, the MFDS believed that the 2+1-year grace period would give manufacturers sufficient time to adapt, and it did not introduce any additional support measures. As the regulation’s enforcement date approaches, companies are beginning to withdraw from injectable production, and organizations such as the Korea Pharmaceutical and Bio-Pharma Manufacturers Association (KPBMA) have stepped in to survey the state of the industry. There are currently approximately 110 aseptic-preparation manufacturers in South Korea. Of these, about 10% have already announced plans to suspend production. If many manufacturers shut down their facilities simultaneously before the implementation date, there could be a shortage of injectable products. If this includes designated National Essential Medicines, the crisis could escalate uncontrollably. Instead of pointing to the fact that the MFDS already completed briefings, public comment, and a grace period during the regulation revision process, it needs to listen to what manufacturers require. Related parties must jointly consider support measures for aseptic‐preparation companies, such as assistance with developing contamination‐control strategies and options like price increases for injectable products. There will inevitably be challenges in securing new personnel or installing new facilities under the new system, such as freeze dryers and sterilization equipment.
- Opinion
- [Reporter's View] Reimb criteria for cancer therapy
- by Whang, byung-woo Apr 23, 2025 06:11am
- The Ministry of Health and Welfare (MOHW) has recently issued an administrative notice announcing an improvement to the National Health Insurance-covered reimbursement criteria for combination cancer therapy. The revised policy states that the patient's co-payment will remain the same as the previously initiated treatment regimen, even if a new cancer therapy approved by the Ministry of Food and Drug Safety (MFDS) is combined with a drug previously approved for reimbursement. Until now, the system has been unfavorable to patients. When an individual uses a new drug in combination with existing therapy, the existing drug becomes non-reimbursed. Therefore, the patient was responsible for the entire treatment course out-of-pocket. The industry and patients welcomed the current measure, but a bigger issue related to new drug-new drug combination therapy remains unresolved. In fact, almost 48% of 70 cases of combination cancer therapy that the MFDS approves falls into the category of new drug combination therapy. Now that discussions about expanding reimbursement for combination therapies have been initiated, the focus has shifted to improve new drug combinations. However, the interests of the government and the industry still do not align perfectly. The government must consider a finite National Health Insurance fund, thereby demanding careful approach before green‑lighting high‑cost anticancer drugs. Patient demand for innovative therapies is high, but broadened coverage could strain the National Health Insurance fund. Pharmaceutical companies aim to quickly commercialize their products after the value of a new drug is acknoweldged. The rationale behind this is to secure profits that meet global standards, compensating for the substantial investment in R&D. Consequently, companies tend to pushback during price negotiations with the government or reluctance to supply detailed cost‐effectiveness data. Pharmaceutical companies stress the significance of a 'patient‑centric' value and vision, declaring patient access improvement a core mission. As they emphasize societal duties, critics say they must also accept the consequences during discussions for expanded reimbursement. The recent measure to improve reimbursement criteria for combination therapy has prompted calls for companies to adopt a more forward-looking partnership. At times, the pharmaceutical industry has placed the blame for new‑drug patient access issues on the government’s stringent approval criteria and low-price proposals. Of course, a fundamental difference exists between a government that must respect budgetary constraints and companies driven by profit motives. However, some critics argue that a company with a 'patient-centric' operation as its company core value must also proactively participate in improving the system that obstructs patients from receiving new drug benefits. Several opinions suggest that the health authorities should reciprocate such efforts by fast‑tracking reimbursement decisions for therapies with proven benefits. If each side defers responsibility to the other, the patients may be affected. If pharmaceutical companies truly prioritize patients, they must fulfill their role as partners in improving policy to help solve remaining issues. The government must also balance fair compensation and sustainable fund management in line with the evolving treatment landscape. The issue of reimbursing new drug combination therapy is a complex challenge that can only be met through government-industry partnerships. The government and pharmaceutical companies must be in the same boat for collaborating and have mutual responsibility toward this goal. The recent improvements to the reimbursement criteria have opened the door to change. We hope that the remaining issues will be resolved quickly and improvements will be made continuously.
- Opinion
- [Reporter’s View] Discuss indication-based pricing
- by Son, Hyung Min Apr 23, 2025 06:09am
- The need for a drug pricing system based on indications, which has been consistently raised by the pharmaceutical industry, is reemerging. Recently, some multinational pharmaceutical companies are preparing to hold a “Discussion on Policies to Resolve Inequality in Innovative New Drugs and Improve Regulations.” In particular, the forum will discuss measures to introduce an indication-based drug pricing system to expand reimbursement for new drugs. The aim is to raise awareness of the problem that only 22% of innovative drugs are covered by health insurance in Korea, which prevents patients from receiving timely treatment. Currently, the domestic drug pricing system is based on a single drug price. Even if a new drug is approved for various indications, all patients are charged the same price. Even if additional indications are added and the drug price is lowered, the lowered price is applied for all indications. The problem is that many expensive new drugs secure multiple indications and then are left non-reimbursed. Recently, many new anticancer drugs have emerged that are approved for multiple indications rather than a single indication. For example, MSD's immunotherapy drug Keytruda is approved for 16 types of cancer, including melanoma, non-small cell lung cancer, head and neck cancer, urothelial cancer, stomach cancer, and breast cancer. Another immunotherapy drug, Opdivo, has been approved for nine types of cancer, and the antibody-drug conjugate (ADC) Enhertu is being used for three types of cancer. However, delays in reimbursement are reducing patients' access to such new drugs. In the case of Keytruda, it passed the Health Insurance Review and Assessment Service's Cancer Disease Review Committee, the first hurdle for reimbursement, on its sixth attempt in February, but 6 of its indications were not included. For new anticancer drugs, insurance reimbursement is a factor directly linked to prescription. Due to the nature of anticancer drugs, they must be administered continuously to prolong the patient's life, but the price of non-reimbursed drugs is immense. The price of the ADC drug Trodelvy is about KRW 1.6 million per vial. Converted to one cycle (21 days, two doses), it costs about KRW 9.3 million, which is close to KRW 10 million. It is known that Enhertu also costs about KRW 7 million per cycle before reimbursement. If a new drug that dramatically increases the survival rate is covered by insurance for some types of cancer but not for others, patients may feel relatively deprived. It is time to start active discussions with patient groups. The government has been holding a cautious stance on the indication-based pricing system. It believes that infrastructure development, such as billing and settlement systems, and prescription distortions could arise, necessitating a long-term approach. Given that South Korea has a single-payer national health insurance system, it is understandable that the government must make various efforts to reduce fiscal expenditures. However, it is also important to consider that multinational pharmaceutical companies, that pursue profits, may hesitate to apply for approval for certain high-cost, low-efficiency indications in the current environment, thereby limiting patients' access to treatment. Recently, high-cost treatments targeting the fundamental causes of diseases, such as immunotherapy, antibody-drug conjugates (ADCs), chimeric antigen receptor T-cell (CAR-T) therapies, and cell and gene therapies, have emerged and more are poised to enter the global market. In particular, patients with diseases that previously had low survival rates are now living longer, and even those with intractable and rare diseases are now able to hope for a complete cure. If these innovative new drugs are not introduced into the country, Korean patients may be forced to seek treatment abroad. To establish reasonable measures tailored to the domestic situation as claimed by the government, efforts must be made to at least conduct pilot programs to assess feasibility. Given that health insurance funds are limited and solutions must be found within existing frameworks, it is not feasible to indefinitely postpone discussions on improving patient access to innovative drugs. Open dialogue between the government and the pharmaceutical industry is now essential to enhance patients' access to new treatments.
- Opinion
- [Reporter's View] The MOHW’s contradiction
- by Lee, Jeong-Hwan Apr 16, 2025 05:55am
- The Ministry of Health and Welfare cited the 'non-face-to-face medical treatment pilot project' as an excellent administrative example last year. The reason for its excellence is that the non-face-to-face treatment, which was urgently and temporarily permitted in February 2020 in response to the COVID-19 pandemic, was converted into a pilot project in June 2023, 3 years later, and has been operated stably, with the pilot project model being supplemented and developed to improve the quality of medical services for the public. However, the MOHW overlooked the fact that in the process of implementing the non-face-to-face treatment pilot project, it revised and modified the scope of its application and permission several times, causing confusion among patients, medical institutions, pharmacies, and intermediary platforms. In particular, the MOHW also cited the Framework Act on Health and Medical Services as it failed to secure legal grounds, such as amendments to the Medical Service Act, in the process of converting non-face-to-face medical care into a pilot project in line with the government's declaration of the end of the COVID-19 pandemic. The MOHW's rationale for the pilot project was Article 44 of the Framework Act on Health and Medical Services, which states that “the national and local governments may conduct a pilot project if necessary to implement a new health and medical care system.” With just one line of legal provision as support, the MOHW conducted a non-face-to-face treatment pilot project that breaks the principle of face-to-face medical care. This is the background to the criticism that the opposition party, led by the Democratic Party of Korea, has leveled at the ruling party for forcing an executive order through politics on non-face-to-face medical care, which is directly linked to the health and lives of the people and has a significant impact on the domestic healthcare delivery system and pharmacy ecosystem. In fact, the MOHW has revised the guidelines for the pilot project 5 times since June 2023, when it converted non-face-to-face treatment into a pilot project. The model of the first pilot project, which divided medical institutions into clinics and hospitals and patients into returning and first-time patients, was criticized by the public as being overly complicated. This was also the time when some speculated that the MOHW Minister and Deputy Minister were reprimanded because the pilot project did not fully reflect former President Suk-Yeol Yoon’s request to consider ways to foster non-face-to-face treatment as its industry. Maybe due to this issue, the project for non-face-to-face treatment was revised to effectively remove the criteria on primary and follow-up visits on December 15, 2023, less than 6 months after its implementation. The reason put forward for revising the pilot project was to reduce the inconvenience raised by some in society and to expand patient access to medical care. Afterward, the Yoon administration’s policy on increasing the medical school capacity by 2,000 students was announced in 2024, and the scope of the pilot non-face-to-face treatment project was expanded under the pretext of “responding to the medical gap caused by the collective resignation of residents.” As a result, non-face-to-face medical care was allowed for more than the temporarily allowed period and was revised several times throughout the pilot project period, causing inconvenience to the public, medical institutions, and pharmacies as they had to constantly familiarize themselves with the changed standards and implementation plans. Even amid this confusion, the MOHW itself stamped its own excellent administrative seal because it had advanced the model of the non-face-to-face treatment pilot project, which is like giving itself a report card disjunct from the social confusion it had caused. Won-Joon Cho, a senior policy advisor for health and welfare from the Democratic Party of Korea, criticized the MOHW's full-scale expansion of the non-face-to-face treatment pilot project, saying, “Serious illegal activities are continuing. I will bring to account the background and responsibility for the unending pilot project in the future legislative process.” This is a glimpse of how the MOHW's ‘excellent administrative activity’ evaluation on its non-face-to-face treatment pilot project may be criticized during the National Assembly's audit and the bill review for the revision of the Medical Services Act. Non-face-to-face treatment is still being allowed without any legal basis. As the 22nd National Assembly is about to be inaugurated in a year and the country has entered an early presidential election due to the impeachment of the president, the MOHW should not issue a report card that contrasts with public opinion and the evaluation of the opposition party, but should instead work hard to sort out the problems identified in the process of revising the guidelines for the pilot project and prepare a legislative bill that can minimize social confusion.
- Opinion
- [Reporter's View] 'Korea Passing' related to new drugs
- by Eo, Yun-Ho Apr 14, 2025 05:57am
- The same term can be interpreted differently. In the pharmaceutical industry, 'Korea Passing' is not a matter of diplomatic conflicts. The issue is not analogous to the United States and North Korea alienating South Korea, but it related somewhat to a single multinational pharmaceutical company alienating South Korea due to drug pricing in other countries. Therefore, the Korean health authority opposes using the term 'Korea Passing' in the pharmaceutical industry. However, the number of cases is increasing. Several pharmaceutical countries have temporarily halted the reimbursement process or given up in South Korea due to China and Canada. When asked about their official reasons, the responses mainly were 'related to company's internal matters.' This financial issue, which is the chief concern of the 'Korea Passing,' in turn exacerbates problems related to 'drugs,' which directly affect human health. It is of utmost concern that more 'drugs in the market cannot be used in practices.' Interestingly, such a 'Korea Passing' issue is often transformed into an 'internal matter.' Although the government and the industry may have different stances, the term 'Korea Passing' implicating 'patriotism' comes as a burden. Since it is generally conceived that 'new drug=multinational companies,' company's statements such as "we will not sell drugs in South Korea because drug pricing in South Korea is too low" impose a burden. To claim such a statement, companies should admit that they are not putting patients first. They may blame the Korean system. However, the Korean subsidiaries of these companies should acknowledge that they have not put Korean patients first. Also, they should question themselves, 'Have we tried our best?' The Korean government cannot avoid being responsible. New drugs that patients most need are primarily products from multinational pharmaceutical companies. Instead voicing concerns for the future of the Korean industry, the government overlooks patients in South Korea. The government should not approach this issue of confidential drug pricing without being flexible since it does not put more financial burden. It is an unavoidable issue a country with a small market size, like South Korea, faces. The government initiated expanding the risk-sharing agreement (RSA) despite opposing opinions from non-governmental organizations. The government must strive to minimize the effect of 'Korea Passing' to resolve remaining conflicts. Despite such concerns, companies must put forward responsibility related to the 'drug' itself when communicating with their headquarters for 'bringing their companies' drugs to South Korea' amid the process of improving the system.
- Opinion
- [Reporter's View] Korean R&BD system and strategies
- by Whang, byung-woo Apr 10, 2025 05:57am
- “It is not easy for a new drug to succeed just with good technology. It is only a real success when the drug reaches the market.” This is what an executive of a global pharmaceutical trading company said to the reporter recently. The tides are changing in the pharmaceutical and biopharmaceutical industry. The focus is shifting from R&D (Research & Development) to R&BD (Research & Business Development). In other words, business-related strategies such as technology transfer, joint development, and investment attraction have become as important as R&D. The reality of the industrial ecosystem is behind this. South Korea is still choosing a growth strategy centered on technology exports rather than innovative new drugs. Although the number of pipelines is increasing, due to the nature of drug development that is accompanied by high cost and long-term battles, companies are focusing on technology transfer based on early-stage - such as Phase I and II - clinical results rather than the final approval, in order to achieve results. In fact, it takes a long time for a single candidate substance to reach global clinical trials, approval, and market entry. There is also a view that this is an unavoidable strategy in the domestic environment, where the pharmaceutical and bio-pharmaceutical ecosystem is relatively small, in terms of market size and investment conditions. At the global level, there is a growing recognition that it is difficult to survive without commercialization in mind from the early stages of R&D. R&BD, which adds business to R&D, has been spreading in line with this trend. Although Business Development (BD) was an existing job category, there is an overall shift beyond a simple change in terminology, and the occupation now entails roles in setting research direction, investment structure, and organizational operation methods. A typical example of such change is reflected in the recent activities of the Korea Drug Development Fund (KDDF). The KDDF has recently put its R&BD strategy at the forefront when selecting support projects. It comprehensively evaluates not only scientific feasibility but also the possibility of technology transfer, marketability, and global partnership plans. Whereas in the past the focus was on “good research,” now the emphasis is on “technologies with commercial potential.” To this end, KDDF is currently preparing a multi-layered support system for strengthening R&BD, including consulting, collaboration programs with global pharmaceutical companies, and VC networking. There are also cases where KDDF has arranged global partnering meetings for participating companies, which have led to positive trends in early-stage technology transfer. They are sharing 'how to speak in business language, not technology'. At the event, Yeong-Min Park, head of the KDDF, emphasized that “a sophisticated commercialization strategy is needed from the early stages for successful new drug development.” Ultimately, the key now lies in how to define the destination of research and development. Paper? Patent? Clinical trial? Now the destination is 'market'. The industry believes that no matter how excellent the technology is, it is useless if it is not connected to the market. Many pharmaceutical companies are reorganizing their structures by establishing new R&BD organizations or including BD personnel in their R&D departments. New drug development is both a science and a business. And it is the role of R&BD to create the intersection of the two. The capabilities of business developers are becoming as important as those of researchers. This is because, although there are many technologies, there are few success stories. Now is the time to ask what value the technology has in the market rather than the R&D results. Ultimately, the task of the pharmaceutical and biopharmaceutical industry is to nurture people who can bring the technology to the market.
- Opinion
- [Reporter's View] Why clinical outcomes require deliberation
- by Son, Hyung Min Apr 08, 2025 05:57am
- Even small differences in clinical outcomes can be highly meaningful. Especially for refractory diseases. Recent top‐line results from Compass Therapeutics’ Phase 2/3 COMPANION-002 trial for cholangiocarcinoma have sparked considerable debate within the industry. According to Compass Therapeutics, the treatment of bispecific antibody tovecimig in combination with the cytotoxic agent paclitaxel resulted in the objective response rate (ORR) of 17.1%, which is nearly three times higher than the 5.3% observed with paclitaxel monotherapy. However, some suggested that the 17.1% ORR is considerably lower than the 37.5% ORR recorded in a previous domestic Phase 2 study conducted by Handok. In a domestic Phase 2 trial, tovecimig+paclitaxel combination therapy had a 37.5% ORR. The latest clinical trial's ORR is less than half of the Phase 2 study. It is important to note that it is too early to make a definitive conclusion on the clinical trial outcomes. The patient populations differed significantly, 24 patients in the domestic Phase 2 trial versus 111 patients of varying races and ages in the global Phase 2/3 study. COMPANION-002 trial is still ongoing, and data on secondary endpoints such as progression-free survival (PFS), overall survival (OS), and duration of response (DOR) have yet to mature. Furthermore, the unique characteristics of cholangiocarcinoma must be taken into account. Although the overall patient numbers are relatively small, cholangiocarcinoma is notoriously difficult to diagnose early and is characterized by rapid metastasis and recurrence, leading to a 5-year relative survival rate of only 28.9% (2017–2021). In fact, seven out of ten cholangiocarcinoma patients eventually die. Another primary reason for the low survival rate is ineffective treatment options. In cases of locally advanced or metastatic cholangiocarcinoma where it is inoperable and first-line therapy has failed, there has been no approved targeted therapy available in Korea. Targeted drug studies have been challenging because of early diagnosis and a small population of patients. Although some targeted therapies for cholangiocarcinoma have shown less than a 1-month improvement in PFS compared to placebo, they have surpassed regulatory hurdles. FOLFOX-based regimens yield a median PFS of 4.0 months and an OS of 6.2 months. Some cancer types have many patients and easily detected in early phases. Clinical studies of those types rarely have data recording over ten digits of months of PFS and OS. However, in challenging fields such as cholangiocarcinoma and triple-negative breast cancer, where the development of targeted therapies is complex, even slight numerical differences can be highly significant. Therefore, it would be premature to draw definitive conclusions about Compass Therapeutics' cholangiocarcinoma treatment without waiting for the final data. As the pharmaceutical industry gradually overcomes long-standing challenges in developing effective therapies for cholangiocarcinoma, a range of new treatments is emerging. Recent developments include the addition of immunotherapies such as AstraZeneca's Imfinzi and MSD's Keytruda as first-line options, as well as the emergence of targeted therapies like Pemazyre and Tibsovo for second-line treatment, along with various agents including, tovecimig and rivoceranib. Experts emphasize that, given the scarcity of treatment alternatives for cholangiocarcinoma, even slight differences in efficacy relative to existing therapies can be significant. When interpreting clinical outcomes, it is essential to consider each cancer type's specific clinical context and biological characteristics. Ultimately, understanding the differences in clinical results between cancers with limited treatment options and those with a wide array of available therapies is critical for accurate data interpretation.
- Opinion
- [Reporter's View] Preparations for US pharmaceutical tariff
- by Kim, Jin-Gu Apr 03, 2025 05:55am
- US President Donald Trump designated April 2 (local time) as 'America's Day of Liberation.' The day the US will announce reciprocal tariff rates for various countries. US reports expect details on tariff-affected countries, rates, and applicable product categories to be disclosed as early as the evening of the 1st. The specific tariff rates will be known in South Korea by the morning of the 2nd or, at the latest, the morning of the 3rd in Korean time. The United States is Korea's largest market for pharmaceutical exports. Last year, Korean pharmaceutical exports to the US reached US$1.359 billion (approximately KRW 2 trillion), a 50% increase compared to 2023. When expanded to include the broader market, exports have surged from US$33 million a decade ago in 2014 to over 40 times that amount. The US accounted for 18% of Korea's total pharmaceutical export revenue last year, making it the largest single market among all countries. This fact underscores why US tariffs on pharmaceuticals could have a significant impact. Industry attention is now focused on whether Korean pharmaceuticals will also be subject to tariffs, and if so, which specific drugs and at what rates. A 25% tariff rate is the most likely scenario. During a press conference on March 18, President Trump even hinted that pharmaceutical tariffs 'could be 25% or more.' However, it remains unclear whether the forthcoming reciprocal tariff announcement scheduled for April 2 will include pharmaceuticals, or if tariffs on pharmaceuticals will be imposed separately. Some analysts predict that pharmaceuticals might be excluded from the tariff measures, arguing that imposing tariffs on them would likely lead to a surge in domestic healthcare costs. Indeed, recent projections indicate that the number of drugs experiencing supply shortages in the US could exceed 215 (up from 127), and US generic drug prices may increase by an average of 18%. One report even warned that US healthcare spending could skyrocket from a baseline of 5% to as high as 60%. Another opinion suggests that tariffs could be applied only selectively, targeting certain countries with large trade deficits, such as some European nations, or excluding critical categories like essential or supply-shortage drugs. Nonetheless, prevailing forecasts still lean toward the imposition of pharmaceutical tariffs. Should tariffs be levied on domestically produced drugs, it could deliver a severe hit to Korea's pharmaceutical and biotech industries. Companies are left with few options and must concentrate on creating exit strategies. The Trump administration has reiterated a 'tariff first, negotiate later' approach. Even if tariffs are eventually imposed on Korean pharmaceuticals, there remains potential to mitigate the impact through subsequent negotiations. Despite South Korea being identified as a 'notorious trade imbalanced country,' industry negotiators argue that it is important to emphasize that Korea has consistently run a trade deficit with the US in the pharmaceutical sector. In the medium to long term plan, South Korea must also accelerate reforms in its drug pricing and innovative pharmaceutical company certification systems. The United States Trade Representative (USTR) has previously released a report stating that Korea's drug pricing policies and innovative pharmaceutical company certification system disadvantage foreign companies. Both systems are currently undergoing revisions, and if given the opportunity to negotiate with the US, South Korea should actively highlight these improvements at the bargaining table.
- Opinion
- [Reporter's View]Unifying the price of pneumococcal vaccines
- by Eo, Yun-Ho Mar 28, 2025 06:38am
- The National Immunization Program (NIP) is the ideal “goal” for vaccine-holding pharmaceutical companies. This is because the government's policy of purchasing vaccines and providing them free of charge to the public, above all, ensures stable sales. Therefore, when the government announces that it has selected a preventive vaccine for a specific disease for NIP, companies with relevant vaccines begin to compete fiercely. Companies deploy various strategies to increase market share within the set market as well as to be selected for NIP. The National Immunization Program (NIP) of pneumococcal vaccines has recently been in the spotlight. The new addition of 'Prevnar 20' from Pfizer Korea, the original leader in the market, has stirred the battle between multinational pharmaceutical companies' premium vaccines. Pfizer’s pneumococcal vaccine pipeline, which ranges from Prevnar and Prevnar 13, has virtually dominated Korea’s market. In this market, a new 15-valent vaccine, MSD's Vaxneuvance, joined as a new player and driven change, so Pfizer is aiming for the throne again with its new 20-valent vaccine. At the core of the claim of the “superiority” of these new vaccines is serotype coverage. If 13 serotypes are covered, it is called a 13-valent vaccine; if it covers 15 it is a 15-valent, and 20 a 20-valent vaccine. The general perception is that a vaccine that covers more serotypes has a relatively higher level of preventive power. However, a higher serotype coverage does not necessarily mean better preventive power. However, the fact that a product “covers more serotypes” to prevent the same disease resonates with the consumers. In the NIP market, the vaccine with the highest price has always been the winner. However, there has been an interesting change in the stance of pharmaceutical companies entering the NIP with their pneumococcal vaccines. The companies have decided to supply their newly developed products at the same price as their existing vaccines. This is called price unification. The reason why the change is interesting is this: When Prevnar 13 was introduced to the NIP, Pfizer insisted on differentiating it from its strong competitor, GSK Korea's 10-valent vaccine ‘Synflorix,' and demanded a dual pricing system, which was implemented. The same goes for MSD. This company also requested a different price from GSK's 'Gardasil' and ‘Cervarix,' which are quadrivalent vaccines, when they entered the NIP for HPV vaccines. This is called the dualization of prices. The dualization of prices means the government's discrimination in the purchase price of NIP vaccines. If the prices of the 2 vaccines granted by the government are different even though they are free vaccines, the majority will choose to take the higher-priced option. The result was clear. However, for some reason, neither MSD, when it entered the market with its 15-valent vaccine, at a time when the 13-valent vaccine was the best, nor Pfizer, when it launched its 20-valent vaccine, demanded a price differentiation for their more serotype coverage. Both pharmaceutical companies chose to standardize their prices. Even though they have pride in their follow-up products. This is a reflection of the correct market logic. The situation in the pneumococcal vaccine market is different from the time when there was a price dualization. Rather than taking the time to raise the price of both the 15-valent and 20-valent vaccines, the companies decided to enter the market as quickly as possible. It is only natural for a company to pursue profit. The strategy may vary depending on the strategic decision to attract sales by competing with competing products. Before, the strategy was ‘dualization of price,' but now it is 'unification.' However, the message of 'for the health of the people' does not seem to be the reasoning behind the companies’ choice of unifying the price.
