Review initiated on introducing 'indication-based drug pricing'

NHIS is issuing a review of the fiscal impact

Follow-up measure on 'indication-based drug pricing' review from March HIPRC Meeting

Public bid for research project announced with goal of completing by the end of year

Analysis of international implementation and fiscal impact to be conducted

The National Health Insurance Service (NHIS) is proceeding with a fiscal impact review for the introduction of an indication-based pricing system. The final decision on whether to implement the system is expected to be determined by the results of this research.

In March, the Health Insurance Policy Review Committee (HIPRC) decided to review the feasibility and effectiveness of indication-based pricing. Consequently, the NHIS has initiated follow-up measures by commissioning a research project.

According to the NHIS on the 8th, a public bid has been announced for a research project titled “Analysis of Indication-Based Drug Price Evaluation Status and Feasibility Review Study,” which is to be completed by the end of this year. The research is scheduled to run for 5 months following contract signing, with a planned completion date between November and December.

The NHIS plans to finalize the research project related to the of indication-based pricing system by November or December. 

There have been consistent criticisms that the current single-price operation of the national health insurance system has limitations in adequately reflecting the value of innovative new drugs for severe and rare diseases.

Through this study, the NHIS will analyze the benefits and effects of improved accessibility under an IBP system, as well as the limitations and costs associated with allocating the health insurance budget. The research findings will serve as a reference for future policy decisions.

The contents of the research consists of ▲Literature review of previous domestic and international studies related to IBP ▲Current status of IBP operations in major overseas countries ▲Objective measurement and analysis of patient accessibility benefits and fiscal impacts for multi-indication drugs ▲Opinion surveys and in-depth interviews with the public, academia, the pharmaceutical industry, and the government ▲Comprehensive policy recommendations for system improvement.

Specifically, the NHIS plans to evaluate fiscal impacts through drug price simulations for each indication. The study will also cover the types of drugs to be included in the system, reimbursement evaluation, drug price calculation methods, and mechanisms for post-reimbursement expenditure management.

Furthermore, the NHIS will examine the overall aspects of the indication-based pricing system, including its pros and cons, operational points of contention, and policy considerations.

The NHIS anticipates that "We will derive mid-to-long-term development directions for the 'expansion of scope of use' system based on the categorization of reimbursement expansion for multi-indication drugs."

The research results are planned for use in establishing a mid- to long-term roadmap for creating an innovative new drug ecosystem and in informing government policy decisions.

The research schedule includes an interim report meeting in September~October and a final report meeting in October~November. The research is scheduled for completion at the end of the year.