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- 2026-06-10 21:10:46
- Opinion
- [Reporter's View] Aspirations for Indication-based pricing
- by Eo, Yun-Ho Jul 17, 2024 05:50am
- The government doesn't seem to be considering it, but talks keep rising. At a recent media briefing held by the Korean Research-based Pharmaceutical Industry Association, Dong-Cheol Seo, Director of the Korea Institute for Pharmaceutical Policy Affairs (former professor at Chung-Ang University College of Pharmacy), emphasized the need for Korea to introduce Indication-based Pricing (IBP). Director Seo explained that domestic drugs are initially given a set price, which is reduced as the number of indications for the drug increases. However, the introduction of new drugs with many uses is increasing cases where reimbursement is often not expanded. What should we make of the existence of 'drugs that some people can use and others cannot' and the discussion over 'indication-based pricing' that comes with it? 'Indication-based pricing’ is a method of setting a drug price separately according to the innovativeness of each indication. It reflects the increasing number of cases where a single drug is approved for various indications. KRPIA, a representative organization of multinational pharmaceutical companies, has been calling for the introduction of indication-based pricing for several years. The government's response was more of a strong "No" than a "We will consider its review," but the industry is once again voicing a strong opinion on indication-based pricing. However, there are two main barriers to its adoption. “Can the billing system disaggregate prescription data by indication?,” and “Can patients accept paying different prices for the same drug?” The questions certainly pose a serious issue. However, administrative issues can be overcome with 'effort' if necessary. Also, the differentiated coinsurance rates by indication would require public acceptance. However, it is also true that drugs that have a clear use are currently unavailable for the right patients. Patients will obviously accept paying the different copayment price rather than have the drug remain nonreimbursed. The industry trend of having a single drug with multiple indications has been ongoing for at least 5 years, even if we base the timing on the drugs’ introduction in Korea. Indication-based pricing is currently being adopted by countries such as Australia, Switzerland, and the United States, and in many countries, the practice is to adjust the reimbursement rates while leaving the list price unchanged. We do not know whether indication-based pricing is the only answer. However, in just 3-5 more years, the issue of expanding indications and access to new drugs will be even more pressing than it is today. If we continue to put off addressing the piling up of off-label indications, the accessibility score of Korea’s reimbursement system will drop significantly.
- Opinion
- [Desk’s View] Respect Korea's generic drug industry
- by Lee, Tak-Sun Jul 16, 2024 05:46am
- The Korean pharmaceutical industry is characterized by generic competition upon the original drug’s patent expiry. When a new drug's patent expires, companies develop products that contain the ingredients for marketing. Combination drugs, reformulated drugs, and generic drugs containing patent-expired drug ingredients are the weapons of domestic pharmaceutical companies. With more than 200 finished drug pharmaceutical companies focusing on the market for patent-expired drugs, it is indeed an inefficient industry. If 10 of these pharmaceutical companies devoted to new drug development, the industry would have been bigger with be less excessive competition. However, in the 100-year history of Korea’s pharmaceutical industry, the industry’s focus has always been on the development of generic drugs, not new drugs. With global pharmaceutical companies such as Pfizer, Novartis, and Roche dominating the new drug market, it is unlikely that the Korean pharmaceutical industry will be reorganized into a new drug-oriented industry in the near or even distant future. However, it is a self-evident fact that the generic drug industry is increasing Korea’s self-sufficiency in finished drugs. According to the Korea Food and Drug Statistical Yearbook, as of 2022, the self-sufficiency rate of finished drugs in Korea was 68.7%, and the self-sufficiency rate of API was 11.9%. Although we are highly dependent on foreign countries for APIs, a high proportion of the finished drugs are made in Korean factories and supplied to domestic patients. The self-sufficiency of finished drugs is also high because of Korea’s generics industry foundation. This is a factor that gives us a sense of stability in terms of market supply and demand. If Korea’s generic industry had been dominated by foreign companies, the Korean drug market would have been unstable, being fully dependent on imports. However, the excessive competition in the generic industry needs to be addressed as it leads to inefficient market conditions. Illegal rebates and substandard quality are among the issues that hinder the competitiveness of the Korean pharmaceutical industry. Furthermore, the inability of competition to drive down prices in the state-controlled insurance market also plays a role in the inability of this bad practice to be corrected In this regard, the key to the proper growth of the Korean generics industry depends on the creation of a normal competition system that does not break the current high degree of self-sufficiency. However, it is unclear whether the state’s recent drug price reduction policies reflect this situation, especially as the government's recent external reference pricing reevaluation disregards Korea’s situation. The very idea of comparing generic drug prices in 8 developed countries that have different pharmaceutical industry structures seems to be a misunderstanding or complete disregard of the Korean generic industry. A unilateral drug price reduction policy will kill the domestic generic industry. This is a problem that could lead to the retreat of the Korean pharmaceutical industry, which is built on generics. There is no guarantee that killing the generics industry will lead to the growth of the new drug industry. The recent 'Study on Improving the Drug Price System for Generic Drugs' that the government conducted to implement the generic drug price reduction policy also suggests that it is necessary to strengthen policies to encourage the use of low-priced products in the early stages. If the government doesn't intend to kill the generic industry, it should prepare measures to encourage the use of low-priced generics before unconditionally lowering drug prices. Korea's generic drug industry may look less sophisticated than those of developed countries that develop new drugs, but is not something to disregard.
- Opinion
- [Reporter’s View] MFDS provides support for drug shortages
- by Lee, Hye-Kyung Jul 15, 2024 05:47am
- A thyroid cancer treatment ‘Theracap’ was once listed on a “Drug Shortages Database,” where suspension of the supply or shortages are listed as current, of the Ministry of Food and Drug Safety (MFDS)’s Drug Safety website and then removed. Saehan Industry expected the drug shortage and notified the MFDS of its suspension in accordance with the ‘Regulation on Safety of Pharmaceuticals (Ordinance of the Prime Minister), which states that when a marketing authorization holder of medicinal product discontinues production, importation, or supply of drug products, they must report to the MFDS the reasons no later than 60 days before the suspension day. Shortly after the notification, Theracap was removed from the Drug Shortages Database. Saehan Industry said reduced demand and an increase in raw materials produced in a manufacturing plant in Braunschweig, Germany, are the causes of drug shortages. After the MFDS let the company know that it would review possible administrative supports, the company likely withdrew reports of suspension of the drugs. Saehan Industry said, “We are internally reviewing alternative measures to produce the products instead of approval cancellation.” The MFDS anticipated that because 'Sodium Iodide(131I),' the active ingredient of Theracap, has been designated as an essential medicine, approval cancellation of the product due to a raw material issue would, in turn, affect patients. The MFDS already has various administrative support measures to resolve drug shortages after experiencing acetaminophen shortages during COVID-19. However, many small pharmaceutical companies are not aware of the administrative support provided by the MFDS. This year, the MFDS established a pharmaceutical management and support team and enhanced the management of items of drug shortages. Suppose other companies have difficulties manufacturing pharmaceuticals, such as National Essential Drugs, similar to the case of Saehan Industry. They may knock on the MFDS’ pharmaceutical management and support team. For instance, Bukwang Pharm’s ‘Synthyroid’ was a similar case. Synthyroid is designated as a National Essential Drug, containing ‘levothyroxine’ as the active ingredient used to treat hypothyroidism. Due to a recent increase in demand, it was sold out in pharmacies. After multiple press coverages of drug shortages, the MFDS sent an official request to Bukwang Pharm to contact the MFDS for the administrative support they needed. Bukwang Pharm needed support in relaxing the 52-hour working week for workers at the plant. Consequently, the MFDS is close to negotiating with the Ministry of Employment and Labor. Although the government is preparing various support measures to address drug shortages, this approach may not completely solve the shortages in clinical settings. However, we hope the government’s various support measures, such as the national essential drugs, will help stabilize the supply of medicinal products.
- Opinion
- [Reporter’s View] 'all-comers' with strict criteria
- by Eo, Yun-Ho Jul 02, 2024 05:48am
- Drugs that are intended for use regardless of any conditions are strictly regulated. In the pharmaceutical industry, 'all-comers' refers to a drug indication that can be prescribed at any treatment stage, regardless of conditions. Drugs with all-comers indications have demonstrated their efficacy regardless of receptors or genetic mutations. This is appealing and interesting. Yet, the Korean government has a firm stance towards these all-comers’ indications. It is certainly reasonable. Drugs with many uses, in other words, mean an increased volume of use, which then leads to financial consideration. However, the government’s discretion towards a drug seems to suggest another hurdle besides finance. Drugs with all-comers indication have proven records and gained the Ministry of Food and Drug Safety (MFDS) approval, yet a difference in efficacy exists. When reviewing reimbursement of all-comers that target particular genes, considering the mechanisms of drugs, but the basis of concluding effectiveness is irrelevant to those genes, the government stands by the guideline, 'limiting to originally targeted genetic mutations.' Such discretion is considered reasonable and to be considered with time. However, time hasn’t been helpful when we consider past cases. In the case of the PD-L1 inhibitor 'Optivo (nivolumab),' an immunotherapy medication for the treatment of non-small cell lung cancer (NSCLC) that was approved for all-comers indication, experts at the time agreed that 'PD-L1 expression rate' was not a marker. However, due to untimeliness of the drug’s release, Optivo was granted reimbursement in 2017 with a conditional criteria. Since then, numerous new drugs with all-comers indications have been released. Yet, these drugs are still applied with limited reimbursement criteria during the review for reimbursement listing. It suggests that the government must consider patients and propose a compromise along with carefulness. If pharmaceutical companies make unreasonable requests during the reimbursement discussion of a drug with approval, the government cannot accept them, especially since even the physicians oppose them due to financial issues. However, the government must provide reasons rather than just saying "difficult." Instead, the government must continue the discussion based on data evidence.
- Opinion
- [Reporter’s View] No innovation without failure
- by Son, Hyung-Min Jul 01, 2024 05:47am
- Korean biopharmaceutical companies are exchanging joy and sorrow over out-licensing agreements. Last month, three companies, including HK inno.N, have successfully signed agreements to out-licensing of their new drug candidates in addition to AprilBio and ISU Abxis. In contrast, there are instances where new drug candidates that have been successfully out-licensing are later returned. GC Cell announced that a collaborative R&D agreement with Artiva Biotherapeutic, its U.S. subsidiary, for three treatments for CAR-NK solid tumors in 2021 has terminated. Furthermore, Olix Pharmaceuticals and Curacle received notifications of contract terminations from France’s Thea Open Innovation last month. In April, Voronoi terminated the out-licensing agreement made in 2022 with METiS Therapeutics, a biotech company in the United States, for its solid tumor treatment VRN14. Yet, it is too early to be disappointed about the termination of out-licensing agreements. There are instances where companies can succeed by developing drugs for new indications. For instance, last year, Hanmi Pharmaceutical confirmed the potential of Poseltinib for the treatment for recurrent or diffuse large B-cell lymphoma (DLBCL). The licensing of Poseltinib, a BTK inhibitor under development by Hanmi Pharmaceutical, was returned from Lily in January 2019 because the efficacy of the drug was not confirmed in a phase 2 trial involving patients with rheumatoid arthritis. Additionally, Hanmi Pharmaceutical is showing a process in clinical trials for efpeglenatide, a new drug candidate for obesity. Efpeglenatide is a product that initially struck a licensing agreement with Sanofi in 2015 to treat diabetes and later returned to Hanmi Pharmaceutical. Then, Hanmi Pharmaceutical changed its development strategy for this drug to a Korean-focused obesity treatment. Based on recent clinical results, Efpeglenatide demonstrated weight loss effects. During the new drug development process, selecting and focusing are necessary steps. The company’s R&D strategy can be changed, and instances of new drug candidates that fail to demonstrate efficacy can occur. Out-licensing returns are common practice in the pharmaceutical industry. Fortunately, none of the four returned new drug candidates had significant issues regarding their efficacy. Companies with returned technologies plan to proceed with later phases of clinical trials without delays. Now is the time for companies to clearly announce their potential development directions to seek future investment opportunities. When clear directions are suggested, they could seek opportunities to out-license their new drug candidates again. There is no innovation without failure. If a company firmly believes in a pipeline item (new drug candidate), it may not worry about each case of returned licensing or the success of out-licensing. Only the companies that are not discouraged or give up are poised to survive.
- Opinion
- [Reporter's View] No more exemptions, just deferrals
- by Eo, Yun-Ho Jun 24, 2024 05:47am
- The Korean government has set out to fix the pharmacoeconomic evaluation exemption system. Although the authorities coined it as an “improvement,” the direction seems to be near a “reduction.” A report on a study commissioned by the Health Insurance Review and Assessment Service was released at the end of last year. The study, titled 'Study on Preparing a Plan to Improve the System for Exemption from Submission of Pharmacoeconomic Evaluation Data,' analyzed the current status and issues of Korea’s pharmacoeconomic evaluation exemption system, which was introduced in 2015, and proposed measures for its improvement. The report claims that the core of the improvement plan is to change the exemption system into a deferral system. The report pointed out that the core of the positive-listing system is the cost-effectiveness evaluation, therefore, Korea should not exempt drugs from evaluations when other countries do conduct evaluations. Based on the research results, HIRA proposed a revision of the current PE exemption system. To this end, the HIRA and the Korean Research-based Pharmaceutical Industry Association (KRPIA) recently held their first meeting. The industry's reaction to this is understandably grim. The PE Exemption System is literally the only way out for drugs that are difficult to evaluate but deemed necessary. It contains various financial control devices and has embraced an "expenditure cap" design since its inception. In fact, the industry has been constantly claiming that the current system has too high a threshold and has consistently emphasized the need for its expansion. Of course, the contents of the recent report will not be reflected 100%. However, the proposed measures in the report will hardly be satisfactory for the industry. Even now, it is not easy for companies to apply for the PE exemption system, and the number of eligible drugs will be significantly reduced if the reform is implemented. For example, contrary to how the current 200 patients or fewer (the usual threshold required to be eligible for the PE exemption) requirement refers to the number of patients that fall within the drug's scope of use, the proposed reforms refer to a stand-alone disease, meaning that a drug that would have been eligible if it met the 200 patients or fewer requirement based on its genotype or line of therapy indication must now have 200 or fewer patients affected by the disease itself. The fundamental purpose of deferring the PE exemption is more difficult to understand. The pharmaceutical industry has constantly requested the application of a flexible ICER threshold. And we have heard endlessly about how Korea’s ICER threshold is too strict for drugs to be reimbursed. It is doubtful whether drugs that would not have been listed if not for the PE exemption system will be able to remain reimbursed when evaluated after the deferred period. If some regulations are tightened, some need to be loosened as well. The government is already planning to save national health insurance finances by implementing bold drug price reduction mechanisms such as external reference pricing reevaluations and revision of the price-volume linkage system. It may be that the number of applicable drugs has increased since the implementation of the system, rendering improvements necessary. However, it is also true that this system has served as a 'breathing hole' in Korea's listing system, we need to devise other ways out before closing that hole.
- Opinion
- [Reporter’s View] Reliability Verification Review Committee
- by Lee, Hye-Kyung Jun 20, 2024 05:48am
- The Ministry of Food and Drug Safety has formed a Reliability Verification Review Committee. In the 'Guideline for Drug Manufacturing, Sales, and Import Marketing Authorizations and Labeling Change Authorizations,' which was revised by the MFDS on the 17th, a procedure was added for the Reliability Verification Review Committee to verify the reliability of the permit data submitted by companies during the drug approval and review process. In the past, if data with questionable reliability was submitted during the approval and review process, nothing happened if the applicant withdrew the data. Unreliable data is data that is false or falsely presented data. In other words, if false data was submitted intentionally or unintentionally and detected, it was possible for the applicant to just withdraw the application in a ‘no harm no foul’ sense. However, in the future, the data submitted to MFDS will not be nullified even if the company 'voluntarily withdraws’ or 'voluntarily cancels’ the data. The reliability of all the data submitted will be verified without exception. If the committee determines that the submitted data is not credible, it will notify the headquarters and the follow-up department to initiate pharmacovigilance. This process will be applied to all data that are currently under review, even before the committee is formed. What should not be overlooked is that a suspicion of the reliability of an item in the approval/review stage can taint the reliability of the entire drug manufacturing plant during pharmacovigilance. The MFDS said that if the reliability of a single data in the early stages of review is questioned, it is possible to suspect "falsehood" and "falsity" of the entire manufacturing process. Therefore, if data submitted during the approval/examination stage is even slightly wrong, whether intentionally or unintentionally, this one issue can lead to 'revocation of the GMP certificate’ in the pharmacovigilance process. The MFDS also said that it "cannot be said that it is irrelevant" that the "questionable data" submitted by companies that do not follow the principle of good faith may be subject to future disposals up to the revocation of their GMP certificate. Although it may seem like just the MFDS reorganizing, launching a new committee, and refining its procedures, the launch of the Reliability Verification Review Committee seems to be one of those serious regulations that can even lead to the revocation of GMP certificate.
- Opinion
- [Reporter’s View] Finances limit reimbursement of drugs
- by Eo, Yun-Ho Jun 07, 2024 05:51am
- Insurance reimbursement standards and indications for a drug can differ. This is because the government’s pockets are not infinite under the National Health Insurance System. This is why there are always complaints in the field. Not all complaints can be resolved but there are some that evidently require resolution, that were made for incomprehensible “financial” reasons that are difficult to understand. Restrictions on age, duration, and switching drugs are typical examples. In the case of the age restriction, the standard is simple. For the same condition, infants, young children, or elderly patients may be excluded from coverage, or only certain age groups may be included due to concern about financial exhaustion. In this case, reimbursement is often extended later through reimbursement expansion measures. However, some drugs remain inaccessible for the patients. Restrictions set on the duration of use are a little different. Generally, reimbursement standards limit a drug's dosing interval based on the drug's clinical studies or authoritative international guidelines. However, there are also cases where reimbursement is restricted for "financial" reasons without any specific grounds for limiting the dosing interval. Restrictions on switching are the most frequent. Autoimmune diseases are the next big thing in the pharmaceutical industry after anticancer drugs, and numerous classes of drugs and same-class drugs with the same mechanism of action compete in the market. In the case of these drugs, the government often does not allow patients to be reimbursed for the first drug if they switch to another, meaning that if a patient is given a new drug with the expectation that it will work better than the first drug, but experience worse prognosis, he or she cannot go back to the old drug. The same situation was applied to drugs that were introduced long ago, and it took a long time before switching was granted reimbursement. In Korea, drug reimbursement has a significant impact on prescribing practices. Even if a patient needs a drug, doctors will often refuse to prescribe it if it is not reimbursed. This is why restrictions for financial reasons can be detrimental in fields where prescribing is essential. We ask the health authorities to trust the field’s judgment a little more.
- Opinion
- [Reporter's View] Expectations for new Alzheimer's drugs
- by Son, Hyung-Min Jun 05, 2024 05:47am
- Last month, a new drug for Alzheimer's disease, Leqembi, was approved in Korea. Leqembi, which was developed by Eisai and Biogen, targets the amyloid beta (Aβ) protein in the brain, which is considered one of the most likely causes of Alzheimer's disease. The industry welcomed Leqembi’s arrival because there had been no promising new drugs to treat Alzheimer's disease until now. Until now, donepezil, galantamine, rivastigmine, and memantine were used for Alzheimer's, but all were only able to relieve symptoms such as cognitive impairment and do not fundamentally treat dementia. Since then, a number of brain function improvement drugs have been introduced to prevent Alzheimer's disease but failed to prove their effectiveness. In 2022, acetyl-L-carnitine, which was used as a brain function enhancer, failed to prove its efficacy during clinical reevaluations, which led to its indication being removed. Oxiracetam also failed to prove its efficacy during clinical reevaluations last year and was removed from the market. Choline alfoscerate formulations also remain mired in controversy. The reason for the market exit of these drugs that had been used to improve brain function is lack of efficacy. The main problem with these drugs is that they have a jagged effect, which means that they may or may not improve the patient’s condition, depending on how the patient is feeling that day. Side effects have also slowed the development of Alzheimer's disease treatments. Alzheimer's is one of the leading causes of dementia, and it is believed that abnormal proteins such as amyloid beta protein and tau protein build up in the brain, causing nerve cells to die slowly. However, in the case of amyloid-targeted therapies, amyloid-related imaging abnormalities(ARIA), which are abnormal signals such as brain edema or microhemorrhage observed on MRI scans, may occur with their use. Aduhelm, which came close to commercialization before Leqembi also failed due to high rates of side effects in addition to its lack of efficacy. The good news is that other treatments have emerged that have shown promise in early Alzheimer's disease, including Leqembi and Lilly's donanemab. Both treatments target the amyloid beta protein, which is responsible for the development of dementia, and have shown efficacy in clinical trials with manageable side effects. In clinical trials, Leqembi improved a composite measure of cognitive function. This allowed patients with mild cognitive impairment to return to daily life to conduct day-to-day activities. Just as it is meaningful to extend the number of survival days of cancer patients by administering chemotherapy drugs, administering Leqembi is expected to have a similar effect. As we severely lack treatment options for Alzheimer's disease, new drugs are needed to expand treatment opportunities for patients. After the history of failures recorded in the development of Alzheimer's disease treatments, it would be interesting to see if the new Alzheimer's drugs can reverse the fate. It is the reporter’s hope the new drugs will be able to address the dire unmet needs of Alzheimer's patients in Korea.
- Opinion
- [Reporter’s View] An open talk on improving the GMP system
- by Lee, Hye-Kyung Jun 05, 2024 05:47am
- Last month, CEOs of biopharmaceutical companies submitted a statement to the Ministry of Food and Drug Safety (MFDS) requesting an improvement to the 'Cancellation of the GMP compliance decision (GMP One strike-out).' They asked that if non-compliance with GMP has been unintentional, a different set of measures be applied instead of one strike-out. On December 11, 2022, the MFDS initiated a GMP One strike-out act. According to this act, when a company is found to be in violation of the Good Manufacturing Practices (GMP) for medicinal products, their GMP compliance approval may be revoked. This measure has been established due to past incidents in which more than ten companies, including Binex, Vivozon Pharmaceutical, Hanall Biopharma, Dongindang Pharmaceutical, Hansol Pharm, Samsung Pharm, and Medica Korea, altered ingredients without authorization, falsified documents, and provided false information on approval documents. The GMP One strike-out act states that if a company violates GMP compliance, such as obtaining GMP compliance decisions based on false information or illegally and repeatedly falsifying GMP records, action will be taken. This year, there was a case of canceling the GMP compliance decision, and some items will soon be withdrawn. When a company receives a GMP One strike-out, manufacturing the offended item and the same formulation will be stopped. The system was implemented one year and six months ago. During this period, Hutecs Korea Pharmaceutical received a disposition and is pursuing a trial. The companies expecting a disposition may not readily accept the MFDS’s disposition. Consequently, there should be an opportunity to hear the opinions of biopharmaceutical companies CEOs regarding their statement for revising the GMP One-strike out system. The MFDS has reviewed the CEO’s statement regarding the GMP One-strike out system. However, the MFDS has not publicly discussed this matter or announced its official opinion. The MFDS may open a session with the CEOs if the Korea Pharmaceutical and Bio-Pharma Manufacturers Association (KPBMA), which represents biopharmaceutical companies in South Korea, officially submits a statement. However, the MFDS prefers to discuss this matter unofficially. The GMP One-strike out system has been implemented as part of revising the Pharmaceutical Affairs Act Article 38-2 (Standards of Manufacture and quality control). Since this system was established by the National Assembly, the MFDS, an administrative agency, feels certain pressure to discuss measures for revision. However, this policy has been implemented over one year and six months ago. There is a need to conduct a public review of the system. If the KPBMA proposes a clear agenda regarding this system, the MFDS official should provide an opportunity for official discussion.
