Innovative pharmas need permanent pricing incentives

“Limited INN prescribing and warehouse pharmacy regulation should focus on improving access and safety of medicines in short supply”

Rep In Soon Nam, “Will support Lee administration’s focus on building a pharmaceutical powerhouse and creating blockbuster drugs by being elected the Deputy Speaker of the National Assembly”

Rep. In-soon Nam of the Democratic Party of Korea has drawn attention by stating that permanent pricing incentives for innovative pharmaceutical companies should be institutionalized in order to advance Korea into a pharmaceutical and biotech powerhouse and create blockbuster new drugs.

Rep. Nam criticized the Ministry of Health and Welfare, noting that while the ministry recently formalized a differential drug pricing system between innovative and non-innovative pharmaceutical companies through a resolution by the Health Insurance Policy Deliberation Committee, the inclusion of preferential pricing for innovative pharmaceutical companies only as a temporary provision left some gaps.

Regarding legislation to introduce limited international nonproprietary name (INN) prescribing, Rep. Nam also expressed the view that it would be reasonable to either remove penalty provisions for doctors who fail to comply with mandatory INN prescribing regulations or to downgrade and relax these penalties to administrative fines.

Her point is that policy and legislation should be pursued with a focus on ensuring that the public can access frequently out-of-stock and essential medicines without barriers, setting aside conflicts between specific professions such as doctors and pharmacists.

Having officially announced her candidacy for Deputy Speaker of the second half of the 22nd National Assembly, Rep. Nam In-soon promised that, if elected, she would strive to create a national environment that advances the pharmaceutical and biotech industry and enhances public access to essential medicines.

On the 7th, Rep. Nam held a meeting with the press corps and stated, “As the Jae-myung Lee administration has adopted a national agenda to transform Korea into a leader in digital health and the pharma-biotech industry, I will consider various ways to support this goal as Deputy Speaker.”

“Pharma-biotech lost priority under Yoon administration… will restore momentum”

Rep Nam assessed that while fostering the pharma-biotech industry has always been a priority across administrations, interest declined under the former Yoon, weakening growth momentum.

In contrast, she noted that the Lee administration has set a goal of becoming one of the world’s top 5 pharma powerhouses and developing domestic blockbuster drugs, raising expectations for policy reforms across related ministries, including the Ministry of Health and Welfare.

She therefore argued for the need to permanently extend preferential drug pricing for innovative pharmaceutical companies with the goal of fostering blockbuster new drugs.

Rep Nam stated, “I have consistently advocated for differential pricing between innovative and general pharmaceutical companies, and I welcome its inclusion in the recent reform. However, making the incentive temporary limits its impact on new drug R&D investment.”

“The government’s goal is to improve the domestic pharmaceutical industry’s structure using the funds secured through drug price cuts. If we want innovative new drugs and blockbusters to emerge in Korea, preferential treatment for innovative pharmaceutical companies cannot be temporary. Instead of offering temporary preferential treatment to innovative companies, we must remove the ‘temporary’ qualifier to allow for active support.”

Rep Nam also noted that the Health and Welfare Minister Eun-Kyeong Jeong has shown a strong commitment to fostering domestic new drug development.

She said, “The Lee administration has declared its intention to nurture blockbuster drug companies and has merged the Bio Committee and Bio-Health Innovation Committee. Previously, the Ministry of Health and Welfare did not appear to take a leading role, but after speaking with Minister Jeong Eun-kyung following the integration of the innovation committees, it appears the Ministry intends to take the initiative and carry out its duties. The atmosphere will change going forward.”

He noted, “Currently, South Korea lags behind advanced countries in terms of pharmaceutical technology, new drug development, and medical AI, so we must catch up quickly. Since I enacted the Special Act on the Promotion of the Pharmaceutical Industry, preferential measures have been stalled for several years. If elected Deputy Speaker, I will prioritize this area in my legislative work.”

“Let’s carry out limited INN prescribing focused on patients, without provisions punishing doctors”

Regarding the limited INN prescribing bill currently pending in the National Assembly’s Health and Welfare Committee, Rep Nam expressed the view that even if provisions punishing doctors who violate the mandatory generic prescribing requirement are removed, a legislative environment must be created that ensures patients can access essential medicines without inconvenience.

She emphasized that, since limited INN prescribing is a key policy agenda item of the current administration, efforts should focus on addressing resistance from the medical community and ensuring smooth institutional adoption.

The current bill mandates INN prescribing for selected drugs designated by the Ministry of Health and Welfare following a government committee review, and stipulates penalties of up to one year in prison or a fine of up to KRW 10 million for violations.

Rep Nam clearly stated that these penalty provisions should either be removed entirely or downgraded to administrative fines.

She also noted the need to carefully consider concerns raised by the Korean Medical Association regarding the scope of bioequivalence testing and trust in substitution and INN prescribing.

Rep Nam said, “The KMA is opposing the measure, raising concerns about the broad scope of bioequivalence testing, and their arguments should be taken seriously. We need further discussion on how to incorporate these concerns into policy. For now, it seems there is a lack of objective data or research on generic substitution and INN prescribing, so we need to accumulate more data.”

She added, “Gradual implementation of INN prescribing for out-of-stock and essential medicines could serve as a middle ground between physicians and pharmacists. “Public awareness of generic substitution and INN prescribing has significantly increased during the COVID-19 pandemic, as more people have experienced receiving alternative drugs with the same active ingredient.”

Nam emphasized, “We should activate systems such as post-notification of substitution and build more research data to support future legislative discussions. But imposing criminal penalties for INN prescribing violations is inappropriate. A more reasonable approach would be to remove penalties or reduce them to administrative fines, prioritize patient-centered legislation, and consider enforcement measures in stages.”

“Warehouse pharmacy regulations need to prevent misuse”

The recent amendment to the Pharmaceutical Affairs Act, which strengthens regulations on warehouse-style pharmacy advertising, is also one of Nam’s achievements.

She explained that the ultimate goal of the regulation is to prevent excessive consumption and misuse of medicines that could lead to adverse effects.

The provision in the Pharmaceutical Affairs Act prohibits expressions that may encourage misuse and delegates authority to the Ministry of Health and Welfare to specify concrete and unique expressions that cannot be used in pharmacy names or promotional slogans through subordinate regulations, prioritizing public safety above all else.

Rep Nam said, “We also brought forward the implementation date from six months to three months after the government’s promulgation, and added a supplementary provision allowing public health centers to provide administrative guidance to pharmacists opening new pharmacies before the law takes effect. I was the one who codified the provision for pharmacists to provide medication guidance within the Pharmaceutical Affairs Act. At first, pharmacists weren’t very fond of it, but today, medication guidance has become a crucial system and phrase for ensuring public medication safety.”

She continued, “When I look at warehouse-style pharmacies, I'm sorry whether pharmacists can actually provide proper medication guidance to patients. We must prevent the public from perceiving medications as mere commodities. Even after my election as Deputy Speaker, I will engage in policy monitoring to curb the misuse of medications by the public by regulating warehouse-style pharmacies.”