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- 2026-06-10 21:10:45
- Policy
- “Drug price reform may bring collapse of generic self-sufficiency”
- by Lee, Jeong-Hwan Jan 27, 2026 06:55am
- Concerns have been raised that if the government’s drug pricing reform, which focuses on generic drug price cuts, is pushed forward without revision, a growing number of domestic pharmaceutical companies will abandon local generic production, ultimately shaking the foundation of Korea's pharmaceutical sovereignty.Critics warn that such an outcome could weaken new drug R&D, increase dependence on overseas sources for both active pharmaceutical ingredients (APIs) and finished drugs, and, in the long run, lead to shortages in domestic generic supply and greater reliance on originator products, making it difficult for the government to achieve its goal of reducing National Health Insurance spending.In particular, as the reform plan announced in late November last year was drafted without sufficient consultation with the pharmaceutical industry, industry experts believe the plan should be revised after ample discussion and then be implemented gradually.On the 26th, attorney Kwan-woo Park of Kim & Chang and attorney Hyun-wook Kim of Shin & Kim (Sejong) outlined the limitations of the Ministry of Health and Welfare’s reform plan and proposed improvements at a National Assembly policy forum on drug pricing reform.“Generics should be viewed as a measure to ensure public access, not merely low-priced drugs”Attorney Park pointed out that the Ministry of Health and Welfare's current drug pricing system reform plan is similar to the 2012 policy of across-the-board price cuts for generic drugs.He noted that although drug expenditure initially declined after the 2012 cuts, spending rebounded to previous levels in just two years. At the same time, production of non-reimbursed drugs, which were not subject to price cuts, increased, employment in the pharmaceutical sector declined, and yet the Ministry appears to be repeating the same administrative mistake it had made more than a decade ago.They expressed concern that if the Ministry pushes through its reform plan without revision, it will lead to a decline in generic drug sales, reduced capacity to maintain production facilities, decreased investment in new drug R&D, and job losses.He also cautioned that increased use of low-cost APIs, such as those sourced from China, could lead to quality deterioration, greater dependence on originator drugs, and the abandonment of generic launches beyond the 11th product for a given formulation, ultimately disrupting the stable supply of finished drugs.Moreover, if the shortage of generic drugs persists and reliance on originator drugs increases, he projected that the achievement of the National Health Insurance Service's cost-saving goals would become uncertain.Park further stated that the other elements of the reform, such as introducing market-linked actual transaction prices, implementing reforms to the reimbursement adequacy reevaluation system, and establishing periodic drug price adjustment mechanisms, cannot escape criticism for reducing predictability for pharmaceutical companies or being redundant or unreasonable regulations.To address the issues with the Ministry of Health and Welfare's reform plan, Park stressed that policies must be established to use generics as a means to strengthen public access to medical care and pharmaceuticals at reasonable prices, and to create measures where generics play a pivotal role in maintaining health security.With regard to the proposed deduction of the generic pricing rate to the 40% range, he urged the Ministry to engage in sufficient consultation with domestic pharmaceutical companies and consider phased implementation or differentiated pricing rates to ease the impact and improve acceptance.Park stated, “Given that the goal of this reform plan is to transform the domestic pharmaceutical industry ecosystem, revisions are necessary to ensure balanced implementation of both expanded incentives for innovative pharmaceutical companies and regulations increasing the discount rate relative to the benchmark drug price. Before implementing the system, the causes of failure in similar systems must be analyzed, and a flexible policy direction must be set to ensure the system becomes effective.”He added, “To mitigate the shock to the domestic pharmaceutical industry caused by immediate sales declines and ensure the system is accepted, the reform must be implemented gradually. Also, meaningful dialogue with the pharmaceutical industry must take place from the design stage.”“France, UK, Japan: Secured governance by gathering pharmaceutical industry opinions when establishing drug pricing policies”Attorney Kim pointed out that the key issue of the Ministry of Health and Welfare's reform plan was that it was unilaterally established and announced without sufficiently gathering opinions from domestic pharmaceutical companies.To minimize opposition from the pharmaceutical industry and increase acceptance of the Ministry's drug pricing policy, the system should be designed based on two-way communication with the industry, rather than a government-only approach. He criticized that Korea failed to sufficiently guarantee the industry's procedural rights by announcing the plan without consultation.In contrast, major countries such as France, the UK, and Japan have established formal consultation procedures and governance structures to incorporate industry input into drug pricing decisions.France has a framework agreement between CEPS, which handles drug price negotiations, and the pharmaceutical industry association. The UK mandates stakeholder participation and operates official public hearings when reforming drug pricing, payment policies, and systems, centered around NHS England and the Department of Health and Social Care.Japan also operates the process for determining and revising drug prices under the National Health Insurance (NHI) system through the Central Social Insurance Medical Council, an advisory committee to the Ministry of Health, Labour and Welfare.Furthermore, Kim also expressed concern that sharply lowering the generic drug reimbursement rate from the current 53.55% to the 40% range would jeopardize the sustainability of the pharmaceutical and biotech industry, threaten public health security, and trigger job losses.Rather than insisting on a 40% pricing ratio, his point is that the Ministry should redesign a reasonable rate through consultation with industry and defer implementation.Kim further suggested strengthening price incentives for companies contributing to supply stability to enhance the reform’s effectiveness in terms of practicality.He proposed guaranteeing a 68% price level for national essential medicines made with domestically sourced APIs, through base pricing rather than a temporary add-on premium, and applying the price premium immediately when companies switch to in-house APIs, rather than waiting until re-listing.He also recommended excluding innovative medicines or products supplied by three or fewer manufacturers from post-listing price cuts and raising the threshold defining low-priced drugs.Kim said, “The reform plan should be revised and implemented only after sufficient discussion is made over an adequate period, ensuring meaningful protection of industry stakeholders’ procedural rights and genuine consultation with the government.”
- Policy
- GOV “Drug price reform needed for industry growth”
- by Lee, Jeong-Hwan Jan 27, 2026 06:55am
- Director Yeon-sook Kim“Korea has an excessive amount of generic products per ingredient. For example, ingredients with annual market sales under KRW 100 billion have an average of 19 approved products; those under KRW 500 billion have 56 products; and those under KRW 1 trillion have more than 100 on average. Given this reality, we need a serious discussion on how to reform the drug pricing system to create growth momentum for the Korean pharmaceutical industry to reach a global level.”Yeon-sook Kim, Director of the Pharmaceutical Benefits Division at the Ministry of Health and Welfare, repeatedly emphasized that the objective of the drug pricing reform is not to reduce National Health Insurance spending, but to encourage new drug development, secure cost recovery for withdrawal-prevention and essential medicines, and strengthen patient access.She expressed that the domestic pharmaceutical industry's claim that the Ministry of Health and Welfare brought up drug price reductions to save NHIS funds is partly based on misunderstanding, urging understanding that the policy goal is a structural reform of the drug pricing system to spur innovation in the pharmaceutical and biotech industries.In particular, Kim pointed out that Korea has an excessively high number of generic products per ingredient and stressed the need for reform of the generic pricing system to stimulate industrial growth.At a policy National Assembly policy forum on the drug pricing system reform held on the 26th, Kim said, “We designed the reform plan with a sense of crisis and concern that the current drug pricing system has reached its limits, unable to guarantee the supply of essential medicines to the public, let alone new drugs.”Kim emphasized that this drug pricing system reform should serve as an opportunity to strengthen patient access to treatments, enhance the stable supply of essential medicines, and boost the innovation capacity of the pharmaceutical industry.In other words, the goal of this drug pricing policy is not merely a cost-cutting overhaul, but rather a fundamental restructuring and improvement of the pharmaceutical industry's foundation.Kim also expressed pride in Korea’s high level of generic self-sufficiency compared to other countries.However, she acknowledged that the current situation, where an excessive number of generics are approved and marketed for each ingredient, needs to be addressed.Ultimately, she argued that adjusting the number of generics per ingredient through the pricing reform is necessary to create momentum for the Korean pharmaceutical industry’s global expansion.Kim offered no specific response or explanation regarding the postponement or modification of the reform plan's implementation.Kim said, “There was a broad drug-price adjustment policy in 2012, but overall drug costs or the absolute amount itself have not declined since then. Given the increase in chronic disease patients, this is natural. The goal of this drug pricing system reform is not to reduce the proportion of drug costs. The goal is to induce structural reform of the pharmaceutical industry.”Kim concluded, “We must also consider that no comprehensive pricing reform has taken place since 2012. Furthermore, given the reality of an excessive number of domestic generic drug items, we must consider a drug pricing system that enables the domestic pharmaceutical industry to expand globally. We will deliberate on which approach is most effective, achieve the desired results, and reflect the realities of the pharmaceutical industry.”
- Policy
- Cervarix waves white flag to Gardasil… exits KOR mkt
- by Lee, Tak-Sun Jan 26, 2026 01:19pm
- The supply of GlaxoSmithKline’s (GSK) cervical cancer vaccine Cervarix Prefilled Syringe will be discontinued in Korea.The company has decided to withdraw from the Korean market amid a sharp decline in demand. With Cervarix exiting the market, MSD, which holds Gardasil 9, is expected to monopolize this market.The Ministry of Food and Drug Safety announced that GSK reported the discontinuation of Cervarix supply on the 23rd.GSK stated, “Due to a sharp decline in domestic demand, the company has decided to inevitably discontinue supply of Cervarix Prefilled Syringe.”Supplies of Cervarix will continue until July.GSK explained, “Following the supply discontinuation, Cervarix Prefilled Syringe may continue to be administered at medical institutions until the expiration date of existing stock, in accordance with approved vaccination schedules. Currently, MSD’s human papillomavirus vaccine is in supply in Korea.”Currently available human papillomavirus (HPV) vaccines in Korea include MSD Korea’s Gardasil (quadrivalent), Gardasil Prefilled Syringe (quadrivalent), Gardasil 9 (9-valent), Gardasil 9 Prefilled Syringe (9-valent), and GSK’s Cervarix Prefilled Syringe (bivalent).However, MSD has long dominated the market in terms of market share.Based on 2023 import data, Cervarix recorded imports of USD 812,132, compared with USD 12.56 million for Gardasil Prefilled Syringe and USD 44.32 million for Gardasil 9 Prefilled Syringe. This places Cervarix’s import market share at just 1.4%. Analysts attribute this to Cervarix’s lower competitiveness, as it protects against fewer HPV strains than Gardasil.Given Gardasil’s overwhelming market influence, the two products can hardly be considered equal competitors. Gardasil also holds a significantly higher market share in overseas markets. This is why Cervarix withdrew from the U.S. market in 2016 and has since been supplied primarily to developing countries.For the time being, no product appears poised to challenge Gardasil 9 in the Korean market, suggesting MSD's monopolistic structure will persist. Gardasil 9's domestic patent expires next February. This could lead to supply price increases, potentially negatively impacting consumers.In fact, Gardasil 9 drew criticism after raising its supply price for two consecutive years in 2021 and 2022. The current average cost per dose in Korea is reportedly in the low KRW 200,000 range.Meanwhile, competition has begun to emerge in China, where Wantai received approval last year from the National Medical Products Administration (NMPA) for an HPV vaccine, which protects against nine HPV strains like Gardasil 9.
- Policy
- UAE recognizes MFDS as reference body
- by Lee, Tak-Sun Jan 26, 2026 01:19pm
- Going forward, pharmaceutical products seeking registration in the United Arab Emirates (UAE) will be able to do so based solely on Korean regulatory approval.On the 16th, the Ministry of Food and Drug Safety (MFDS, Minister Yu-Kyoung Oh) announced that the Emirates Drug Establishment (EDE), the UAE’s medical products regulatory authority, has officially recognized Korea’s MFDS as an official Reference Regulatory Authority (RRA) in the field of medical products.Established in September 2023, the EDE is the UAE’s regulatory body responsible for the approval and safety management of pharmaceuticals, medical devices, cosmetics, health supplements, and other products within the UAE.This recognition represents a tangible outcome of the practical implementation of the Memorandum of Understanding (MOU) on biohealth cooperation signed and bilateral meetings between the MFDS and EDE following the Korea-UAE summit on November 18 last year. At the request of MFDS Minister Yu-kyoung Oh, the designation was formally conveyed through a letter from Fatima Al Kaabi, Director General of the UAE EDE. The MFDS stated that the move signifies that regulatory cooperation between the two countries has advanced beyond collaboration to a stage of institutional trust.Previously, pharmaceutical companies seeking UAE approval were generally required to obtain authorization from advanced regulatory authorities such as the U.S. Food and Drug Administration (FDA) or the European Medicines Agency (EMA). With MFDS now recognized as a reference authority, companies can apply for UAE approval based solely on Korean MFDS approval. As a result, applicants may benefit from shortened review timelines, simplified regulatory procedures, and exemptions from manufacturing site inspections. This is expected to significantly shorten the time to enter the UAE market and enhance the global competitiveness and credibility of Korean products.Given that the UAE functions as a regulatory and distribution hub for the Middle East and North Africa (MENA) region and the Gulf Cooperation Council (GCC), the recognition is expected to serve as a stepping stone for future entry into the Middle Eastern market for pharmaceuticals and medical devices.This measure is particularly significant because it is based on the Ministry of Food and Drug Safety's (MFDS) full listing as a WHO World-Class Regulatory Authority (WLA) last August and the mutual trust built between the two agencies. The UAE has recognized the MFDS as possessing regulatory capabilities equivalent to those of advanced regulatory authorities, extending this recognition to medical products ranging from pharmaceuticals to biopharmaceuticals and medical devices.Since the establishment of the EDE, the MFDS has pursued multifaceted diplomatic efforts alongside the Embassy of the Republic of Korea in the United Arab Emirates (Chargé d'Affaires Jong-kyung Park) to secure recognition as a reference authority. These efforts included high-level meetings, signing memoranda of understanding, ministerial-level discussions, and bilateral meetings between agency heads.MFDS Minister Yu-kyoung Oh stated, “We are pleased that the UAE’s EDE has officially recognized the MFDS as a reference authority for medical products as a follow-up outcome of the Korea-UAE summit. With MFDS’s regulatory expertise now formally acknowledged in a key Middle Eastern hub country, we will actively support the global expansion of K-Biohealth products, including our pharmaceuticals, medical devices, and cosmetics.”
- Policy
- Yescarta’s second indication passes CDRC review
- by Lee, Tak-Sun Jan 23, 2026 08:39am
- Gilead’s CAR-T therapy Yescarta (axicabtagene ciloleucel) has secured reimbursement criteria, but only for its second indication.The Health Insurance Review and Assessment Service (HIRA) reviewed the reimbursement criteria for oncology drugs, including Yescarta, at the 1st Cancer Disease Review Committee meeting of 2026, which was held on the 21st.Following deliberation, reimbursement criteria were established only for the second indication of Yescarta, ‘Treatment of adult patients with relapsed or refractory diffuse large B-cell lymphoma (DLBCL) and primary mediastinal B-cell lymphoma (PMBCL) after two or more prior systemic therapies’.However, reimbursement criteria were not established for Yescarta’s first indication, ‘treatment of adult patients with DLBCL who relapse or are refractory within 12 months after first-line chemo-immunotherapy.’ Among the new drugs reviewed at the meeting, Yescarta was the only product to secure reimbursement criteria. Amgen’s Imdelltra and Janssen’s Rybrevant failed to establish reimbursement criteria. Rybrevant had drawn attention as a drug used in combination with Yuhan’s Leclaza (Lazertinib).In contrast, all drugs reviewed for reimbursement expansion, rather than new listing, successfully secured reimbursement criteria. These included Jakavi, pomalidomide products, Cabometyx, and Cyramza.Drugs that pass the Cancer Disease Review Committee will now proceed to the Drug Reimbursement Evaluation Committee for assessment of reimbursement adequacy. If approved, they will undergo final procedures through price negotiations with the National Health Insurance Service.
- Policy
- Celltrion drops export permit for FDA-Cleared HIV drug
- by Lee, Tak-Sun Jan 23, 2026 08:39am
- Celltrion has withdrawn the Korean export authorization for an HIV-1 infection treatment drug approved by the U.S. Food and Drug Administration (FDA).The company had pursued overseas HIV treatment markets, including the U.S., through the export authorization, but the move is being interpreted as a change in business strategy. Going forward, Celltrion is expected to focus more heavily on its biosimilar business.According to the Ministry of Food and Drug Safety, Celltrion Pharm withdrew the export license for ‘Temixys Tab 300/300mg (lamivudine/tenofovir disoproxil fumarate)’ as of the 7th. It also withdrew the export approval for the triple-combination HIV drug ‘Telumio Tab (tenofovir disoproxil fumarate, lamivudine, dolutegravir sodium)’.Temixys is a combination drug that combines the active ingredients of GSK's existing original antiviral drug, Zeffix (lamivudine), and Gilead's antiviral drug, ‘Viread (tenofovir)’. It is a product developed by Celltrion for use in combination with other antiretroviral agents to treat HIV-1 infection in adults and children weighing at least 35 kg.Celltrion announced that it received FDA approval for the sale of Temixys on November 16, 2018. This signaled competition with Gilead's ‘Truvada’ in the U.S. HIV treatment market.Prior to FDA approval, Celltrion had obtained export drug authorization from the Ministry of Food and Drug Safety on October 25 of that year, completing preparations for overseas sales.At the time, Celltrion stated it would supply high-quality treatment at a reasonable price compared to the original drug to HIV patients in the U.S. who were unable to access adequate medication due to high drug prices and insurance structures.The company also expressed plans to enter the international procurement market by securing supplier qualification from major global HIV drug procurement organizations, including the World Health Organization (WHO), the Global Fund, USAID, and the United Nations agency UNDP.To this end, the Celltrion Group explained that it had established a new chemical development team within Celltrion and launched a global chemical project.However, the withdrawal of this export license for the AIDS treatment suggests a shift in the company’s business strategy, 7 years after FDA approval. Domestic production of the AIDS treatment will now be discontinued following the authorization withdrawal. Celltrion is expected to focus more intensely on its biosimilar business going forward.
- Policy
- Ozempic, Rezurock, HyalFlex covered from next month
- by Lee, Jeong-Hwan Jan 23, 2026 08:39am
- Novo Nordisk’s type 2 diabetes treatment Ozempic (semaglutide) and Sanofi’s graft-versus-host disease (GVHD) treatment Rezurock (belumosudil) will be covered by Korea’s National Health Insurance starting on the 1st of next month.In addition, new reimbursement standards will be set for Jeil Pharmaceutical’s antibiotic Fetroja (cefiderocol) and Shinpoong Pharmaceutical’s osteoarthritis treatment HyalFlex (hexamethylenediamine cross-linked sodium hyaluronate).On the 22nd, the Ministry of Health and Welfare announced an administrative notice for a partial amendment to the “Detailed Standards and Methods for the Application of Medical Care Benefits (Pharmaceuticals),” which includes the establishment of reimbursement criteria for Ozempic, Rezurock, HyalFlex, and Fetroja.The Ministry plans to gather opinions until the 26th and then submit the agenda for deliberation at the Health Insurance Policy Deliberation Committee meeting on the 29th.For Ozempic Prefilled Pen, new coverage criteria will be established for its use as an adjunct to diet and exercise therapy in combination with oral agents or insulin in adult patients with type 2 diabetes that is not adequately controlled.Coverage for its use as part of the oral combination therapy applies to patients with a glycated hemoglobin (HbA1c) level of 7% or higher despite 2-4 months of combined metformin and sulfonylurea therapy, provided their body mass index (BMI) is 25 kg/m² or higher, or they are unable to use insulin. These patients are allowed reimbursed use of a triple therapy that includes Ozempic.However, if blood glucose is significantly improved with triple therapy, dual therapy with only metformin may also be reimbursed.Its use in combination with insulin (+metformin) is covered when HbA1c remains 7% or higher despite 2-4 months of basal insulin (insulin alone or with metformin) or when HbA1c remains 7% or higher despite combination therapy with Ozempic and metformin (+sulfonylurea).However, objective documentation (treatment history, HbA1c, BMI, etc.) must be submitted at initiation. HbA1c and BMI must be monitored every three months.The coverage period per prescription is up to 4 weeks for the initial 3 months when dosage adjustment is necessary per the approved indications, then up to 3 months thereafter.Rezurock is reimbursed for adults and pediatric patients aged 12 years and older who have failed at least two prior systemic therapies (including ruxolitinib).If ruxolitinib cannot be used due to adverse reactions or contraindications, coverage applies after failure of two or more alternative systemic therapies.If disease progression is absent at the 6-month and 9-month evaluations, and a response is confirmed at the 12-month evaluation, an additional 3 months of treatment is approved with reimbursement.Thereafter, continuous administration is approved upon confirmation of response at each 3-month evaluation. Re-administration is also reimbursed for patients who discontinued due to improvement.However, treatment must be discontinued if GVHD progresses (symptoms worsen or new symptoms appear), unacceptable adverse reactions that render use of Rezurock impossible occur, or a new systemic therapy is initiated after Rezurock.In addition, objective data (such as medical records and blood test results) regarding the target of administration for the initial dose of Rezurock, as well as response evaluations for continued administration or discontinuation, must be submitted.In the case of HyalFlex, coverage applies to patients with knee osteoarthritis of radiographic severity Kellgren-Lawrence grade I–III (mild to moderate).In the case of Fetroja, coverage is applied for complex urinary tract infections and hospital-acquired pneumonia when treatment with carbapenem antibiotics has failed, or when multidrug-resistant Pseudomonas aeruginosa, carbapenem-resistant Enterobacteriaceae, or carbapenem-resistant Acinetobacter species are confirmed. And a physician’s treatment report must be submitted.For DongKwang Pharm’s Sulbacin Inj and other sulbactam/ampicillin combinations, coverage is approved beyond the approved indications when infection with carbapenem-resistant Acinetobacter baumannii is confirmed. The maximum daily dose is 27g, and the treatment period is within 14 days. Coverage may be approved for periods exceeding 14 days upon reference to the physician’s treatment report.In addition, Hanwha Pharmaceutical's Hepa-Merz Inj and other L-aspartic acid-L-ornithine preparations are covered when symptoms of latent or overt hepatic encephalopathy are present.The general principles for calcium and vitamin D-containing oral combination preparations now include hypoparathyroidism due to procedures such as total thyroidectomy.
- Policy
- Upcoming drug price reduction
- by Lee, Jeong-Hwan Jan 23, 2026 08:39am
- Major domestic pharmaceutical companies and mid-sized firms are repeatedly requesting modifications to the drug price reform plan, which was announced by the Ministry of Health and Welfare (MOHW) for implementation this year. The requests include a delay in its implementation and adjustments to the price reduction rates.The MOHW has yet to provide a clear response regarding the industry’s requests for a delay, changes to the reduction rates, or revisions to the preferential pricing details. Instead, the MOHW appears to be maintaining its "original plan to finalize the decision at the Health Insurance Policy Review Committee within the first quarter."In response, members of the National Assembly's Health Insurance Policy Review Committee, from the opposition party, plan to mediate between the pharmaceutical industry and the MOHW by hosting policy forums.On the 22nd, Rep. Baek Jong-heon of the People Power Party, alongside Reps. Han Ji-ah and Ahn Sang-hoon, will co-host a policy forum on drug price system reform on the 26th,. The forum will be organized by the Korea Pharmaceutical and Bio-Pharma Manufacturers Association (KPBMA).During the forum, Attorney Park Kwan-woo from Kim & Chang will analyze the impact of the MOHW's drug price reform on public health, and Attorney Kim Hyun-wook from Shin & Kim LLC will present on sustainable measures to improve the drug price system.In the subsequent panel discussion, representatives from large domestic pharmaceutical companies, as well as the Korea Pharmaceutical Industry Cooperative, representing mid-sized and small firms, will participate to demand a delay in implementation, adjustments to the reduction rates, and revisions to the MOHW's preferential pricing plan.Specifically, the industry representatives, including Yoon Jae-Chun, Vice Chairman of Daewoong Pharmaceutical; Young-Joo Kim, CEO of Chong Kun Dang Pharm; and Cho Yong-jun, Chairman of the Korea Pharmaceutical Industry Cooperative, will be attending. From academia and patient groups, Professor Hye-Young Kwon of the Department of Health and Medical Administration at Mokwon University and Yoon Gu-hyun, President of the Korean Association for the Study of Liver, will attend. Yeon-sook Kim, Head of the Pharmaceutical Management Division at the MOHW, will represent the government.Attention is focused on whether this forum, which aims to seek a balance between the sustainability of health insurance and the development of the pharmaceutical and biotech industries, can narrow the gap in perspectives between the industry and the government.Multiple industry sources are appealing to the MOHW to accept the industry's proposed modifications proactively. The top priority for the pharmaceutical industry is delaying the committee's approval of the reform plan, currently scheduled for next month (February).On November 28 last year, the MOHW publicly announced the reform plan, which centers on cutting generic drug prices, and reported the implementation schedule to the committee.Several domestic pharmaceutical companies maintain that the implementation plan is too rushed, failing to ensure the predictability necessary for business management.The pharmaceutical industry is also demanding that the price-reduction rates for already-listed drugs (generics) be minimized. While the MOHW plans to lower the current generic price calculation rate from 53.55% to the 40% range, the industry argues this cut is excessive and insists it should be set at 48% to 50%.Additionally, they have requested that the implementation timing for generics listed since the 2012 price cuts be pushed back sufficiently to ensure predictability, and that the details of the preferential pricing plan be revised through consultation with the industry.An official from a top-tier domestic pharmaceutical company said,"It is frustrating that specific consultations or coordination of opinions between the MOHW and the industry regarding the reform plan have not yet taken place," adding, "We have requested several times that the short time between the announcement and the implementation date undermines predictability. A delay in the committee's approval is necessary."Another official from a top-tier company added, "Although several forums regarding the drug price reform have been held in and around the National Assembly, the atmosphere remains unclear as to whether the government will modify its plan or accept the industry's demands. If the drug price reform aims to foster the domestic pharmaceutical industry, the MOHW needs to commit practical and proactive consultations with the sector."
- Policy
- 'Key is in compensating innovation that exceeds price cuts'
- by Lee, Jeong-Hwan Jan 22, 2026 08:22am
- Director Yeon-sook Kim explains the drug pricing system reform plan.“While the media has largely focused on how the upcoming drug pricing system reform plan involves adjustments and reductions in drug prices, the true core of the policy is a fundamental strengthening of innovation-based compensation for pharmaceutical R&D beyond mere adjustments Whether it's a new drug or a generic, if it demonstrates innovation, we will increase drug price compensation and extend the preferential period from the current one year to three years plus alpha, creating a virtuous cycle of innovation in the pharmaceutical industry.”The Ministry of Health and Welfare reiterated its stance that the core keywords of the drug pricing system reform plan announced for implementation this year are ‘innovative new drugs’ and ‘resolving supply instability,’ and that it will enhance the tangibility of preferential drug pricing incentives for pharmaceutical companies that achieve these goals.This involves establishing a drug pricing compensation structure proportional to the level of investment in new drug R&D and extending the preferential period from the current one year to ‘three years or more.’Regarding resolving supply instability, the government announced plans to guarantee preferential treatment for up to 10 years for drugs using self-manufactured APIs and for essential medicines made with domestic APIs.The Ministry's policy is to overhaul the post-listing drug price control system to enhance predictability for pharmaceutical companies while reducing the administrative burden on the government.Kim outlined the reform and its operational roadmap on the 21st at the 55th Dailypharm Future Forum held at the Catholic University of Korea’s Songeui Campus Institute of Biomedical Industry.“The current pricing system has limitations in supporting innovation and essential drug stability”The Ministry of Health and Welfare maintains that the current drug pricing system has clear limitations in reliably ensuring the creation of innovative new drugs and stable patient access to essential medicines.It was further diagnosed that, compared to other countries, South Korea's generic drug prices are relatively high, leading to stagnation in innovation through new drug R&D.The ministry believes that many pharmaceutical companies remain entrenched in business models centered on high generic drug prices, neglecting new drug R&D.At the same time, population aging and rising pharmaceutical expenditures have significantly increased drug spending, making it increasingly difficult to strike a balance between fostering an innovation-based pharmaceutical industry ecosystem and ensuring the sustainability of the National Health Insurance system.“Drug price reform to foster a new drug ecosystem and ensure a stable supply of essential medicines”To strengthen the new drug development ecosystem, the ministry plans to shorten the reimbursement listing period for rare disease treatments to within 100 days and to advance cost-effectiveness evaluations for treatments targeting severe and intractable diseases.To facilitate the early domestic introduction of innovative medicines, the scope of the flexible drug pricing contract system should be expanded, and compensation should be provided proportional to the level of innovation creation efforts, such as new drug R&D.This includes strengthening R&D-linked pricing incentives and ensuring stable preferential periods.For essential medicines, the ministry will overhaul the exit-prevention drug system across the entire lifecycle, strengthen the effectiveness of preferential treatment for essential drugs, and reinforce coordination between relevant policies.Through a public–private consultative body, supply stability medicines will be monitored throughout their lifecycle and addressed proactively.The government will also strengthen monitoring of pharmaceutical supply and distribution and implement tailored measures based on the causes of shortages.In particular, for medicines with unstable supply, the government plans to support substitution prescribing and dispensing at the national level.“Generic pricing rate to be adjusted to the 40% range… stepwise cuts to apply from the 11th product”The most controversial part of the reform among domestic pharmaceutical companies is the rationalization of price management.The ministry plans to revise the pricing structure based on international benchmarks, with the key change being a reduction of the generic pricing rate from the current 54.55% to the 40% range.The stepwise price reduction system will also be strengthened. Currently, stepwise cuts apply from the 21st product of the same ingredient, with the price set at 85% of the lowest price.Under the reform, price cuts will apply from the 11th product, and the reduction rate will be set at an additional 5 percentage points below the first generic price.The Ministry of Health and Welfare anticipates that this reform will significantly increase the perceived benefits for pharmaceutical companies by applying price premiums primarily to those contributing to new drug innovation and supply stability.For price reductions of already-listed generics, items maintaining a price level of 53.55% since the 2012 blanket price reduction adjustment will be sequentially reduced over three years.The post-listing management system will standardize the timing for adjusting price reductions linked to expanded usage and price-volume linkage agreements. Actual transaction price surveys will be restructured to a market competition-linked model. The reimbursement adequacy reassessments will be restructured around clinical evidence.Kim emphasized, “Korea is at a critical moment, both a crisis and an opportunity, to build an innovative new drug ecosystem. We will raise pricing rewards for innovation and significantly extend preferential periods to send a clear signal toward innovation.”She added, “Even if a product is not a new drug, it will receive preferential pricing if it contributes to a stable supply of essential medicines. For exit-prevention drugs, we will collaborate with organizations like the Korea Pharmaceutical and Bio-Pharma Manufacturers Association and the Health Insurance Review and Assessment Service to identify tasks for improving drug pricing levels or systems after conducting research studies. We will ensure that the number of generic items remains at an appropriate level, avoiding excessive proliferation.”“When too many products of the same ingredient are listed at once, prices will be adjusted according to stepwise criteria after an appropriate period. For already-listed products, prices that have remained high since 2012 will be reduced gradually and sequentially over three years.”
- Policy
- Gov't addresses unstable supply of essential drug·API
- by Lee, Jeong-Hwan Jan 22, 2026 08:22am
- To strengthen response to drug supply instability this year, the government is expanding support for pharmaceutical companies producing items in short supply, improving self-sufficiency in active pharmaceutical ingredients (APIs), and enhancing the manufacturing capabilities for biopharmaceutical raw materials and components.On the 20th, Yim Kang-seop, Head of the Division of Health Industry at the Ministry of Health and Welfare (MOHW), met with the Korea Special Press Association to explain measures to address the supply chain crisis facing the pharmaceutical and biotech industries.To address structural limitations in the drug supply system, the MOHW has secured a total budget of KRW 15.6 billion for this year and is pursuing five projects.The projects include support for production facilities and equipment for companies supplying drugs with unstable supply, support for stockpiling core medicines, support for diversifying API procurement, user testing support for bio-based raw materials and components, and manufacturing support for domestic raw materials and components.First, the MOHW will increase the number of pharmaceutical companies receiving budget support for producing drugs with unstable supply from 1 last year to 4 this year.This project, launched for the first time last year, currently supports 'Boryung Questran Powder For Suspension (Cholestyramine resin),' a bile acid sequestrant-based hyperlipidemia treatment, and the only drug safe for use by pregnant women and children.Yim plans to reorganize the program to allow subsidy support for up to two years, taking into account the actual time required for pharmaceutical companies' demand and equipment setup, while also increasing the number of target items.To produce API domestically, new projects starting this year include support for diversifying raw material procurement, which helps consortia between raw material suppliers and finished product manufacturers, and a project to cover stockpiling costs to ensure a stable supply of medicines even during crises.In collaboration with the Korea Health Industry Development Institute (KHIDI), the MOHW will also launch initiatives for user testing and manufacturing support to promote the use of domestically produced biopharmaceutical raw materials and components.Yim explained, "Korea's self-sufficiency rate for API is currently low, in the low 20% range. He noted that dependence on specific countries, such as China and India, is high, and that supply chain risks are growing as countries shift toward protectionist trade policies," adding, "To resolve these structural issues, the ministry is launching new projects this year to directly support supply chain stability, including the localization of raw materials and components, stockpiling core medicines, and user testing for bio-based materials.Yim added, "The ministry is ensuring that preferential drug pricing for the use of domestic raw materials and essential medicines is reflected in the drug price system reform plan. The goal is to create a structure that links budget support not only to simple raw material procurement but also to the improvement of facilities and equipment. Enhancing overall supply chain stability remains the core of this year's projects."Yim emphasized, "The issue of localizing and increasing the self-sufficiency rate of raw materials and bio-based components has been repeatedly pointed out during parliamentary audits," and added, "The MOHW will establish a research commission to develop a roadmap for API self-sufficiency and identify additional tasks through a two-track strategy that links the budget to pharmaceutical policies."
