Since Trump took office, the US has designated the pharmaceutical industry as its core strategic industry and is working to reshape the industry with the US at its center.

The goal is to significantly lower drug prices in the U.S., the world's largest pharmaceutical market. However, the “Most-Favored-Nation Pricing (MFN)” policy recently announced by the U.S. health authorities is causing tension not only in Korea’s pharmaceutical industry but also in clinical settings.

#This is because there is a possibility that global pharmaceutical companies may reconsider their plans to launch new drugs in Korea due to the U.S. MFN policy. The clinical field is also closely monitoring the future direction of U.S. policy, as it could affect patients' access to new drugs.

In May, U.S. President Trump signed an executive order to promote the MFN policy. The MFN policy aims to lower the prices of prescription drugs in the United States to the lowest level among major developed countries.

The target drugs include high-priced treatments (such as anticancer drugs and immunotherapy drugs) with the highest annual expenditures under Medicare Part B, the U.S. health insurance program.

The plan is to determine U.S. drug prices by referencing the lowest drug prices among OECD countries with per capita GDP (GDP) of 60% or more of the U.S. level. This aims to alleviate the burden of drug prices in the U.S. while preventing other countries from supplying drugs at prices significantly lower than those in the U.S.

On the 31st of last month, President Trump went so far as to give 17 multinational pharmaceutical companies a “60-day deadline” to lower drug prices in the United States to overseas levels. Specifically, the companies include AbbVie, Amgen, AstraZeneca, Boehringer Ingelheim, BMS, Eli Lilly, Merck Germany (EMD Serono), Genentech, Gilead, GSK, Johnson & Johnson, Merck (MSD), Novartis, Novo Nordisk, Pfizer, Regeneron, and Sanofi.

The multinational pharmaceutical companies responded immediately to the pressure.

Eli Lilly has decided to raise the price of its obesity treatment, Mounjaro (tirzepatide), in the UK. Specifically, the price of Mounjaro in the UK will be increased by up to 170%.

The private price of Mounjaro will rise from the current GBP 92-122 (approximately KRW 173,000-229,000) per month to GBP 133-330 (approximately KRW 249,000-620,000). At the same time, insulin prices in the US will be reduced by 70%, with a cap on patient copayments set at USD 35 per month. Novo Nordisk has also decided to lower the US price of its diabetes treatment Ozempic (semaglutide).

The monthly price will be reduced from USD 1,000 (approximately KRW 1.39 million) to USD 499 (approximately KRW 620,000).

Other multinational pharmaceutical companies may also follow, lowering their prices in the US and raising prices in other countries.

With the US drug price reduction policy becoming a reality, the domestic pharmaceutical industry is also reacting sensitively. This is because the launch of new drugs by global pharmaceutical companies could be linked to this policy.

The most notable point is whether South Korea will be included as a reference country.

Given that the policy states that “the U.S. price will be determined by referring to the lowest drug price among OECD countries with a per capita GDP of 60% or more of the U.S.,” the prevailing opinion is that South Korea and Japan will be excluded from the reference countries.

However, there are predictions that South Korea could become an MFN target country if PPP (purchasing power parity-based GDP) is applied, leading to heightened tension among multinational pharmaceutical companies considering new drug launches in Korea.

With no specific details on the application of reference countries or other measures announced, tension is growing across the entire domestic pharmaceutical industry. The Ministry of Health and Welfare and the Health Insurance Review and Assessement Service are closely monitoring the U.S. government's policy announcements and considering future response strategies.

A KRPIA official stated, “The U.S. government has not disclosed specific application methods, such as reference countries, for its MFN drug pricing policy, so the situation is currently uncertain. If South Korea is used as an international reference price standard, it could affect not only the sustainability of domestic drug pricing policies but also patients' access to treatment.”

Although not yet evident on the surface, there are opinions within multinational pharmaceutical companies that they have begun to hesitate about launching new drugs in Korea. This is because it would be difficult to publicly announce a delay in the launch of new drugs in Korea due to the uncertainty surrounding the MFN policy.

A representative from a multinational pharmaceutical company stated, “There are opinions that a specific company has put new drug approval negotiations on hold at the headquarters level, but this has not been publicly disclosed yet. However, there is concern that the global market views the Korean pharmaceutical market as taking a fairly conservative approach to pricing innovative new drugs.”

As a result, the U.S. MFN drug pricing policy has become a major issue at events held by pharmaceutical companies seeking to launch their products in Korea and receive reimbursement. Interest is focused on why some companies are attempting reimbursement despite the uncertain situation.

Junil Kim, General Manager of Astellas Korea, explained, “It is true that companies selling their products in the U.S. market are facing difficulties in receiving Korean drug prices due to MFN-related issues. Astellas, which accounts for nearly 50% of its sales in the U.S., is no exception.”

In the clinical field as well, there is a growing consensus that concerns surrounding the introduction of new drugs due to global pharmaceutical companies' MFN pricing policies are valid. This is expected to spark debate over the “Korea passing” issue for new drugs in the future.

If the situation intensifies, there are concerns that it could lead to delays in access to innovative new drugs, reduced treatment options for patients, and increased financial burdens on patients in Korea. In the long term, this is also expected to jeopardize the competitiveness of conducting clinical trials in Korea in the global market.

The Korean Society of Gastroenterology pointed out in its own medical policy forum that “there is a possibility that excessively low drug pricing policies could trigger the ‘Korea passing’ phenomenon, leading to the withdrawal of global pharmaceutical companies from the Korean market.”

"Despite receiving approval in Korea as a treatment for ulcerative colitis, Eli Lilly's Omvoh was not released in Korea due to an unreasonably low drug price proposed during price negotiations. A policy is needed that ensures patient access to treatment while maintaining the sustainability of the health insurance budget. Rather than pursuing excessive drug price cuts that could lead to market withdrawal, a strategic approach that promotes the introduction of new drugs from a long-term perspective should be devised.”