Drug prices in Korea, like other markets around the world, have seen drug price erosion. Korea’s MOHW, earlier this year, established a private-public working group to discuss increasing reimbursement for innovative drugs. The goal of the Korean group is to foster new funds for the development of new innovative drugs, that will then be more assessable to Korean patients. The major additional fund program in Korea is called the risk-sharing agreement (RSA). While there are a number of specific programs under this RSA agreement, in one instance, if the high-priced drug does not meet expectations, drug manufacturers may need to refund some money received to the National Health Insurance Service.
Defining what is considered an innovative new drug has been a major issue during these discussions since the definition by foreign drug companies and domestic Korean companies varies. Foreign drug companies want to define innovative new drugs as drugs that have a new mechanism, help cure serious disease, have been approved through the Korean “GIFT” program – similar to breakthrough status in the US – and are certified in Korea as a NET product. Korean drug manufacturers narrow the definition of an innovative drug to only include those in the Gift program, a slightly modified drug, and a drug that has had a local Korean clinical trial.
In addition, HIRA, the Korean pricing agency has said that certain types of drugs do not need to pass Pharmacoeconomic Evaluation (PE) in order to receive reimbursement. Drugs for children where there is no existing treatment, rare diseases, and cancer will no longer be required to have a PE.
Written by: Ames Gross – President and Founder, Pacific Bridge Medical (PBM)
Mr. Gross founded PBM in 1988 and has helped hundreds of medical companies with regulatory and business development issues in Asia. He is recognized nationally and internationally as a leader in the Asian medical markets. Mr. Gross has a BA degree, Phi Beta Kappa, from the University of Pennsylvania and an MBA from Columbia University.
Source used in the article:https://www.globallegalinsights.com/practice-areas/pricing-and-reimbursement-laws-and-regulations/korea