Two months have passed since the government announced its plan to raise the medical school quota by '2,000' students.

Pharmaceutical companies are facing more marketing challenges amin the ongoing dispute between the medical community and the government.

In particular, global pharmacies that launched new drugs after overcoming reimbursement hurdles face challenges as new patients decline. In addition to local pharmaceutical companies, global companies are also impacted by doctors’ strikes.


According to industry sources on April 6th, the Ministry of Health and Welfare (MOHW) approved the new listing and reimbursement expansion of 18 drugs until April. Due to the new listing and reimbursement expansion, approximately KRW 434.2 billion from the annual health insurance budget will be allocated toward these items this year.

Last year, approximately KRW 381.5 was spent in 32 reimbursed drugs (24 newly listed and 8 reimbursement expanded drugs), whereas this year’s expenditure has already surpassed last year’s even before the end of the first half of the year.

Breaking down the pricing by drugs, there are items that have gathered attention in the clinical field in South Korea.

For example, the list includes Tagrisso (osimertinib) and Leclaza (lazertinib, Yuhan), which competed for reimbursement expansion for the first-line treatment of non-small cell lung cancer (NSCLC).

According to estimates from the MOHW, Tagrisso and Leclaza will receive KRW 204.6 billion and KRW 137.7 billion, respectively, in finances this year. Both drugs were approved for reimbursement expansion in January.

Out of the total finance, the expected increase due to reimbursement expansion would be KRW 92 billion and KRW 88.1 billion for these two drugs, and 2634 patients are expected to benefit from coverage of the first-line treatment.

For these two drugs, an increase in financial spending by KRW 180 billion is expected.

Among the drugs newly listed up to April, the antibody-drug conjugate (ADC) 'Enhertu (trastuzumab deruxtecan, Daiichi Sankyo Korea, AstraZeneca)' accounted for the largest part of the financial spending.

The MOHW has calculated the expected financial spending for Enhertu, which is reimbursed for breast cancer and gastric cancer, to be KRW 134.7 billion.

Among the reimbursement expanded and newly listed drugs, this is the single item with the highest financial spending.

In addition to anticancer drugs, drugs for chronic diseases, such as the 'chronic kidney disease' drug Kerendia (finerenone, Bayer), are among the drugs gaining attention. As it can be prescribed in endocrinology and nephrology departments within university hospitals, it is considered a notable new drug from a global pharmaceutical company.

This is supported by the government’s estimate that 29,350 patients can benefit from the reimbursement listing.

Since the announcement on February 6th of an increase in medical school quotas, there have been mass resignations extending beyond resident physicians to professors at nationwide university hospitals, resulting in continued disruptions in medical services.

The pharmaceutical industry, which must actively engage in sales and marketing following successful new drug approvals or reimbursement expansion, is in a challenging environment. As a result, they remain cautiousness about holding medical symposiums after new drug launches.

So far, challenges have primarily been experienced by suppliers of surgical materials, pharmaceuticals, medical devices, wholesalers, and domestic pharmaceutical companies. However, this situation could also impact global big pharma with new drugs.

AstraZeneca and Yuhan have been proactively preparing through prior processes, such as clearing the Drug Committees (DC) at hospitals for Tagrisso and Leclaza in line with the reimbursement expansion in January. This effort was aimed at gaining an advantage in the non-small cell lung cancer market through medical institution coding work.

As a result, by the end of March, AstraZeneca cleared the DC review of Tagrisso in 94 hospitals, and Yuhan cleared the DC review of Leclaza in 103 hospitals.

However, university hospitals face difficulties treating new patients with prolonged medical service disruptions. As a result, the expansion of the field for these two treatments, Tagrisso and Leclaza, is unfolding differently than anticipated.

Enhertu, which became reimbursed in April, may have faced similar circumstances in a clinical setting specializing in oncology. Daiichi Sankyo and AstraZeneca, in joint sales and marketing, have obtained approval from the DC in 60 hospitals for Enhertu.

“Due to structural challenges, our focus is currently on existing patients, but we must see new patients,” a professor of Hematology-Oncology at Hospital A commented. He added, “Despite efforts to prioritize patient care as much as possible, there has been a decline in the number of new patient treatments, which may result in reduced drug usage.”

“Because leukemia patients are still being accepted through the emergency room, new patient intake has not stopped. The problem is that it is now becoming a chronic situation,” another professor of Hematology at a different university hospital stated. He added, “Even if the range of treatments expands, it will be challenging for pharmaceutical companies due to the structural constraints in the clinical setting, making it difficult to utilize them effectively.”

Global big pharma headquarters are now increasingly concerned about the consequences of the increase in medical school quotas for the clinical field in South Korea. At the same time, there is a sense of urgency to evaluate the extent of revenue decline in the first quarter of this year due to the controversy surrounding the expansion of medical school quotas.

"The headquarters closely monitors the long-term treatment disruption issue in the domestic clinical field. This issue is a major topic in every video conference," an anonymous executive from the Korean subsidiary of a global pharmaceutical company stated. He added, "As we are in a situation where the introduction of new drugs or their reimbursement is at stake, we are proactively evaluating and communicating the potential consequences of this situation."