SEOUL, Mar. 27 (Korea Bizwire) – Concerns are growing after media outlets reported that the price of new drugs developed in the U.S. could spike as a result of a renegotiated free trade agreement.
According to the Ministry of Trade, Industry and Energy, South Korea agreed to revise its pharmaceutical pricing and reimbursement policy to give more recognition to new drugs developed by American pharmaceutical companies.
The policy was originally designed to provide support for the development of new drugs, such as R&D investment and clinical trials, based on their contributions to the country’s health industry.
However, South Korean health authorities have faced criticism from international pharmaceutical companies including Pfizer that the country’s overall drug insurance benefits fail to recognize the value of ‘innovative new drugs’.
New substitute drugs that are not conclusively more cost-effective have only 10 percent of the price for the original drug deducted.
With many new drugs being granted poor insurance coverage in the country, despite the considerable investment required to develop them, the government has been also accused by pharmaceutical companies have been of deterring the sale of new drugs and restricting patient access to them.
When compared to other OECD member states, the average price of a new drug in South Korea was 44 percent lower, the Korean Pharmaceutical Industry Association argued.
Health authorities in South Korea are treading carefully, however, as giving into the demands of the drug companies could result in price hikes, increasing the burden on the shoulders of the patients.
“As it’s only been a day since the KOREA-U.S. FTA negotiation team returned from the U.S., we haven’t heard about the negotiation outcomes in detail as of yet. We hope to discuss the issue and come up with plans to reform the pharmaceuticals pricing policy,” an official from the Ministry of Health said.
“The message from the U.S. pharmaceutical companies is that their new drugs should be sold at higher prices. Given the financial strains on our healthcare system, however, we will consult and reach an agreement with (other government branches) within the scope of stable healthcare financial management,” the official added.
Hyunsu Yim (email@example.com)