Ban on succession of price caps deferred until next year

Implementation timeline revised following public-private consultation

December is the last chance to acquire products from other companies under current rules

The government will postpone implementation of a new rule blocking the succession of reimbursement price caps during pharmaceutical product transfers and acquisitions until next year, following a grace period through the second half of this year.

The change regarding price cap succession in product transfers was not included in the drug pricing reform agenda reviewed by the Health Insurance Policy Deliberation Committee (HIPDC) in March. The government has likely decided to delay implementation in consideration of on-site acceptability.

Discussions on improving the implementation of the revised drug transfer and acquisition rules took place during a public-private consultative meeting involving the Ministry of Health and Welfare, the Health Insurance Review and Assessment Service (HIRA), the National Health Insurance Service (NHIS), and industry representatives on July 22.

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The revision to the drug product transfer and acquisition system was included in the Ministry’s May amendment to the 'Standards for Drug Pricing Decisions and Adjustments.' Until now, for products transferred between companies, the same reimbursement price ceiling as before the transfer was applied.

Under the revised system, however, products acquired through transfers will instead receive whichever is lower—the newly calculated reimbursement price or the existing price ceiling—to prevent companies from using transfers to circumvent the revised drug pricing system.

Because the generic drug pricing rate will change under the new pricing framework, transferred products will effectively be subject to the newly calculated reimbursement price rather than retaining the previous reimbursement ceiling.

The rules governing pharmaceutical product transfers have undergone several revisions over the years. Since 2021, however, transferred products have generally been allowed to inherit the existing reimbursement price ceiling.

Because the Ministry had initially planned to implement the revised notification on Aug. 1 following its administrative notice in May, the timeline was considered too tight, prompting agreement to introduce a grace period.

With implementation now postponed until January next year, products currently under transfer negotiations are expected to proceed without disruption.

A wave of last-minute product transfers is expected as companies reorganize their product portfolios in the second half of the year in response to the broader drug pricing reform,

Since this will be the final grace period during which acquiring companies can still inherit the existing reimbursement price ceiling, transfer activity is expected to become more active than usual.