MOHW to unveil list of 4K items subject to price cuts in JAN

MOHW to disclose the affected item list related to price reductions scheduled to take effect on JAN 1

Related to the actual transaction price-based ceiling price system…will be notified on DEC 24 to reduce the workload burden in the field

"Could be ineffective considering the field burden…actual transaction price reduction is under major reform"

The South Korean government plans to pre-release a list of approximately 4,000 pharmaceutical products subject to price reductions effective January 1, 2026. The price reduction is due to the adjustment of the ceiling price of the actual transaction price.

On December 17, an official from the Ministry of Health and Welfare (MOHW) confirmed to DailyPharm that the list of related items and their respective reduction rates will be provided to relevant associations within this week.

Earlier this month, the MOHW issued an official notice, announcing 'a temporary allowance for paperwork-only returns when reporting of supply records following the price cuts', to the Korea Pharmaceutical and Bio-Pharma Manufacturers Association (KBPMA), the Korea Pharmaceutical Distribution Association, and the Korean Pharmaceutical Association.

The notice also informed that the ceiling prices of insurance price tags of approximately 4,000 pharmaceutical products are subject to price reductions effective January 1, 2026.

However, concerns have been raised across the industry after the announcement. With less than 15 days remaining until the massive price cut of 4,000 pharmaceutical products takes effect, pharmacies and distributors lacked the specific data, such as exact items, quantities, and reduction percentages, needed to prepare.

In response, the MOHW decided to provide the pre-list, including items subject to price cuts due to the actual transaction price ceiling price increase and the reduction rate, to minimize field confusion. 

Although the price reduction is scheduled to be officially announced on December 24, the MOHW plans to provide the list five days ahead, on December 20.

An MOHW official said, "We are aware of the related issue in the distribution industry and pharmacies," and added, "For actual transaction price reduction, the MOHW plans to take administrative response in a way that minimize the field confusion."

The official further added, "The affected documents are according to the official notice, but the MOHW will pre-lease the list of affected products to institutions," and added, "It will be announced by this Friday."

In 2023, when over 7,600 items were subject to price reductions, the MOHW similarly pre-released the list after the field confusion.

At that time, affected organizations, including the Korea KBPMA, the Korea Pharmaceutical Distribution Association, the Korean Pharmaceutical Association, and HIRA, received the pre-lease list files. Pharmacies could verify affected stocks through billing software integration and prepare for the financial impact well in advance.

Meanwhile, affected organizations have argued that this pre-release of data to affected parties should be formalized, given the recurring large-scale price reductions.

Regarding this issue, the MOHW announced that it is preparing to reform the current actual transaction price-based price reduction system. The ministry acknowledged that the current system imposes an excessive administrative burden on the field relative to its actual impact on health insurance financial savings, primarily because of the vast number of affected items.

An MOHW official explained, "In the case of an actual transaction price survey, the number of products subject to investigation is immense, yet the predictability regarding which specific drugs will actually face a price cut is low, which appears to be confusing the field," and added, "For the actual transaction price investigation, we are looking to redesign the entire system of drug pricing and post-management instead of the current method of simple price reductions. We expect this will enhance predictability for the field."