[Reporter's view] Massive drug price cuts

Losses incurred by the government

Generic proliferation.

 

It is the root of all evil.

 

At least that's the case from the government's perspective.

 

When the valsartan incident occurred in 2018 and the ranitidine incident the following year, everyone knew that the essence of the incident was impurities, but the government continued to point out that the proliferation of generics was the problem.

 

The government said it would reduce the proliferation of generic drugs.

 

A new drug pricing system was proposed in July 2020.

 

The new rule set by the government was that the drug price would be reduced if one of the two was not done, whether it was conducting an in-house BA test or using registered raw drug products.

 

It is an ambitious plan by the government to prevent the proliferation of generics.

 

Finally, the time has come to reevaluate already registered generics.

 

The government proposed qualifications such as its own BA testing and use of registered raw drug substances.

 

They said they would reduce the price of drugs by up to 27% for drugs that do not have these two pieces of data.

 

Approximately 23,000 generics suddenly underwent this qualification verification.

 

Pharmaceutical companies face a moment of choice.

 

More than 7,000 generic drugs accepted the fate of lower drug prices.

 

As of September 5, the government lowered the prices of 7,355 generic products.

 

The pharmaceutical industry is expected to lose more than 300 billion won per year.

 

Can the government, which seeks to resolve the proliferation of generic drugs and further secure the financial soundness of health insurance, be free?

 

Initially, the government proposed a new drug pricing system, saying it would solve the proliferation of generics, and at the same time gave a grace period of nearly two years.

 

During the grace period, pharmaceutical companies approved generics as if it were their last chance.

 

Pharmaceutical companies received approval for insurance use of drugs they had no intention of selling, and these products became the subject of this reevaluation of generic drug prices.

 

It is time for generics to be sorted out.

 

Many of the targets of this drug price cut were for insurance purposes, not for sales.

 

The government is required to take a more responsible attitude.

 

A sufficient explanation is needed to resolve the issue caused by incorrect policy judgment using a different logic.

 

It is difficult to look at the direct and indirect losses to the pharmaceutical industry, distribution industry, and pharmacy prices resulting from the price reduction of 7,000 generic drugs as if it were someone else's problem.