Talks continue on price cuts for listed fixed-dose combos

Applying the 45% pricing ratio to the current maximum price would result in a uniform 16% cut

Basing prices on the combined 45% reimbursement rates of individual components could partially mitigate reductions

With follow-up working-level discussions on price reductions for already-listed fixed-dose combination (FDC) products set to continue, reimbursement prices for FDCs are at risk of being uniformly cut, with the extent depending on the final pricing formula.

If the government applies the 45% cut rate to the current maximum reimbursement level for FDCs, set at 53.55%, FDC prices would be reduced by approximately 16%, mirroring the across-the-board reduction planned for single-ingredient products.

As a result, the pharmaceutical industry is expected to propose an alternative approach under which FDC reimbursement prices would be calculated by summing the reimbursement prices of each ingredient after applying the 45% pricing ratio.

According to industry sources on July 6, the Ministry of Health and Welfare (MOHW), the Health Insurance Review and Assessment Service (HIRA), the National Health Insurance Service (NHIS), and industry representatives will hold another working-level meeting on the drug pricing reform, with price reductions for listed FDC products set to be one of the key agenda items.

With the revised ‘Standards for the Determination and Adjustment of Drug Prices’ scheduled to take effect next month and the implementation of price reductions for listed products to follow, the government is expected to finalize the methodology for reducing reimbursement prices of FDC products soon.

During previous discussions, using the current maximum reimbursement level for FDCs (53.55%) as the baseline and recalculating prices using the new 45% pricing ratio was proposed.

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The pharmaceutical industry, however, has consistently pushed for FDC reimbursement prices being set by adding together the revised reimbursement prices of each individual ingredient after applying the 45% pricing ratio separately.

For example, an ezetimibe 10 mg/rosuvastatin 10 mg fixed-dose combination currently has a maximum reimbursement price of KRW 1,251. If that price is deemed to be 53.55% and recalculated directly to 45%, the reimbursement price would fall by approximately 16% to KRW 1,051. In contrast, if the reimbursement prices of ezetimibe 10 mg and rosuvastatin 10 mg are each recalculated at 45% and then combined, the resulting reimbursement price would be KRW 1,141, representing a smaller reduction of approximately 8.8%.

Because reimbursement price reductions are directly linked to declines in product revenue, the industry naturally favors the latter methodology, combining the reimbursement prices of the individual components.

Industry stakeholders also argue that the current reimbursement system already affects FDC prices through changes in the reimbursement prices of their individual components and contend that the same linkage principle should also be applied when implementing price reductions for listed FDC products.

If the individual 45% pricing approach is adopted, the extent of the price reduction would vary depending on the specific dosage combination. Some products could see only minimal price decreases, allowing manufacturers to partially offset the expected decline in sales.

However, the government has maintained its position that FDC products should be subject to the same uniform 16% reduction as single-ingredient products. Consequently, it is considered unlikely that authorities will accept the industry's proposal to base reimbursement prices on the combined reimbursement levels of the individual components.