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- Policy
- [Reporter's View] A separate fund for new orphan drugs
- by Lee, Jeong-Hwan Jul 18, 2025 06:36am
- Will the 'establishment of a separate fund,' considered one of the ways to improve patient access to expensive, rare, and intractable disease drugs, become even more difficult with the inauguration of the Lee Jae Myung administration? Jung Eun-kyung, the candidate for Minister of Health and Welfare (MOHW), who is facing a parliamentary confirmation hearing on July 18, stated that "expanding reimbursement coverage should take precedence over establishing a fund" for drugs exclusively for rare and intractable diseases, separate from the National Health Insurance finances. Jung's statement is interpreted as an intention to maintain the traditional method of determining reimbursement for rare disease patients through national support systems, such as 'special calculation and improvement of standards'and catastrophic medical expense support, within the currently available National Health Insurance finances, rather than creating an additional financial "pocket." This is different from the MOHW's previous stance, where it had agreed with parliamentary legislation aimed at accelerating National Health Insurance reimbursement for high-priced, orphan disease treatments through the establishment of a separate fund. Conversely, candidate Jung showed a completely different attitude regarding the creation of a regional essential medical care fund. Jung presented a clear vision, stating, "If appointed as minister, I will push for the enactment and amendment of relevant laws through consultation with ministries, including the Ministry of Economy and Finance, to ensure the establishment of a regional essential medical care fund." Considering that the frequency of approvals for ultra-high-priced new drugs, such as immunotherapy for cancer and rare disease biologics, has increased incomparably compared to the past, Jung's skeptical expression regarding the establishment of a dedicated fund for rare diseases is disappointing. Suppose expensive new drugs are to be reimbursed within the limited National Health Insurance finances and restricted drug expenditure boundaries. In that case, the responsible authorities will ultimately have no choice but to make innovative efforts to diversify drug reimbursement criteria or to cut drug prices for already approved medicines. Reducing reimbursement for already approved drugs would ultimately increase the likelihood of further drug price reductions, which could lead to protests from domestic pharmaceutical companies and a contraction of funds needed for innovative new drug development. This means that a zero-sum game between multinational pharmaceutical companies, which focus on developing new drugs, and Korean pharmaceutical companies, which have a large proportion of generic products, could intensify over National Health Insurance finances. Therefore, establishing a separate fund for rare diseases is a legislative and administrative task that the new government should proactively consider. The MOHW should not exclude the establishment of a separate fund from its policy priorities. Instead, it should actively engage in administrative efforts, gathering wisdom with the National Health Insurance Service, the Health Insurance Review & Assessment Service (HIRA), and the medical community, to persuade the Ministry of Economy and Finance, which opposes the fund for reasons such as uncertainty of efficacy and fairness with other diseases. The National Health Insurance authorities are the only party that should analyze cases from advanced countries, such as the UK's operation of the Cancer Drug Fund (CDF), to ensure patient access to treatments for rare diseases and strive to open the minds of financial authorities. If rare·intractable diseases and rare disease drugs are translated into English, they become 'orphan diseases' and 'orphan drug.' They are pitiful diseases and treatments, like a child who has lost both parents or been abandoned, with no comfortable place to lean on. Currently, bills establishing separate funds to strengthen national responsibility for orphan diseases and treatments are pending in the 22nd National Assembly. These include the package of bills proposed by Representative Seo Myeong-ok of the People Power Party for the establishment of a Cancer Management Fund·Rare Disease Fund (amendments to the Cancer Management Act·Rare Disease Management Act·National Finance Act·Lottery Tickets and Lottery Fund Act), and the package of bills proposed by Representative Jeon Jin-sook of the Democratic Party of Korea for the expansion of National Health Insurance reimbursement for rare and severe disease treatments (amendments to the National Health Insurance Act·Lottery Tickets and Lottery Fund Act). We look forward to a future where Jung, having passed the confirmation hearing and been appointed MOHW, actively engages in persuasion and consultation with the Ministry of Economy and Finance to ensure the passage of the orphan disease fund establishment bills in the National Assembly. In this case, it would be favorable news for patients and caregivers who suffer from the burden of expensive hospital bills and high-priced treatments, as well as for the National Health Insurance finances, which currently bear a heavy burden.
- Policy
- Will the external reference pricing reevals gain momentum?
- by Lee, Jeong-Hwan Jul 18, 2025 06:35am
- Eun-Kyung Jeong, nominee for Minister of Health and Welfare, said that “it is important to manage drug prices at an appropriate level given the limited health insurance resources” regarding the post-marketing price review system to lower generic drug prices through “external reference pricing evaluations,” suggesting the possibility of its introduction upon her final appointment. Jeong also revealed plans to review policies such as improving the certification system for innovative pharmaceutical companies and expanding incentives to encourage pharmaceutical companies to invest in R&D for innovative new drugs. On the 17th, nominee Eun-Kyung Jeong revealed her position on the external reference pricing reevaluation system in written questions during her confirmation hearing with Representative Yoon Kim of the Democratic Party of Korea and Representative Jong-heon Baek of the People Power Party. Representative Yoon Kim pointed out that the external reference pricing reevaluation of generic drug prices, which the MOHW announced last year, has been postponed indefinitely, and raised the need for its prompt implementation. On the other hand, Representative Jong-heon Baek questioned the need to introduce a system to lower drug prices by comparing them with overseas prices, arguing that it is unreasonable to lower domestic generic drug prices solely based on drug prices overseas, given that each country's insurance system, drug price determination process, and level of social consensus differ. On this, Jeong replied, “The demand for drugs is constantly increasing due to the growing number of elderly people and patients with chronic disease. In order to provide optimal drug reimbursement with limited national health insurance finances, it is important to manage drug prices at an appropriate level.” Jeong explained, “We will carefully review the current status of domestic and international drug pricing systems and policy improvements, and consider acceptability by gathering opinions from the field to manage drug prices reasonably after listing. We will also actively gather opinions through regular communication with the pharmaceutical industry, relevant agencies, and experts on the direction of drug pricing system improvements.” Regarding measures to encourage R&D for innovative new drugs, Jeong said, “The pharmaceutical and biotechnology industry is a national strategic industry that can serve as Korea’s next growth engine, so it is time to scale it on a national level. To this end, we will strengthen compensation for the innovative value of new drugs and reform the compensation system to encourage R&D investment, thereby supporting the cultivation of pharmaceutical companies with global new drug development capabilities.” Jeong added, “We plan to improve the certification system for Korea Innovative Pharmaceutical Companies to encourage their R&D investment in innovative new drugs. We will also consider expanding incentives for companies that strengthen their R&D efforts.”
- Policy
- Jung Eun-kyung views "orphan disease fund establishment"
- by Lee, Jeong-Hwan Jul 18, 2025 06:35am
- Jung Eun-kyung, the candidate for Minister of Health and Welfare (MOHW), has expressed skepticism regarding the establishment of a separate fund to improve the National Health Insurance reimbursement rate for treatments for expensive, rare (orphan), and severe diseases. The rationale is that if the required financial scale for reimbursing high-cost drugs exceeds the fund's size, flexible fund operation becomes difficult. Jung stated her view that continuously expanding the scope of reimbursement should take precedence over establishing a separate fund. On July 17, Jung provided this response to a written inquiry from Democratic Party of Korea Representative Jeon Jin-suk during the parliamentary confirmation hearing. Representative Jeon had asked for Jung's stance on strengthening coverage for orphan and severe disease treatments by creating a separate dedicated fund to improve the National Health Insurance reimbursement listing system. Jung acknowledged that establishing and operating a separate fund for patients with orphan and severe diseases would have the advantage of allowing independent financial management. However, she did not prioritize improving the reimbursement rate. Jung stated, "If the required financial resources for high-cost treatments exceed the fund's scale, there is a concern that flexible operation would become difficult." She emphasized, "Therefore, continuously expanding the scope of reimbursement is primarily needed rather than establishing a separate fund." Jung added, "Currently, various support measures are in operation, including 'special calculation and improvement of standards' to alleviate out-of-pocket burdens and catastrophic medical expense support," and added, "We will strive to strengthen coverage for rare and severe disease patients." Regarding the introduction of an indication-specific drug pricing system for recently developed immunotherapies for cancer that have single components but multiple indications, Jung provided a principled answer that she would review it. Jung said, "It is necessary to review various systems to strengthen patient access to recently developed new drugs." However, she added, "We will review it comprehensively, considering its suitability for operation within the National Health Insurance system in Korea, the benefits of introducing the system, and its financial and social impact."
- Opinion
- [Reporter's View] Bio policy should remain consistent
- by Kim, Jin-Gu Jul 17, 2025 06:13am
- In November 2024, the Yoon Suk Yeol government officially announced the launch of the National Bio Committee. The government aimed to operate a 'presidential' governance body in a preparatory response to the global bioeconomy era. Considering that the previously established 'Bio-health Innovative Committee' was chaired by the Prime Minister, the National Bio Committee was regarded as an advancement in terms of its rank and role. The establishment of a governance body overseeing the pharmaceutical and biotech industries, directly under the President, has long been a goal of the pharmaceutical and biotech industries. Previously, the pharmaceutical and biotech industry operated with separate development strategies fragmented across different divisions. The wall between regulations and support policies, as well as the lack of a central coordinating point for strategic discussions, had been a long-standing concern for the industry. When the government took an initiative to 'unify policies scattered across divisions and manage them,' the industry welcomed it with open arms. There was great anticipation that a policy control tower would enable coordination of regulatory improvements, industrial support, and technological development at a governmental level. However, just about a month after the committee's launch plan was announced, a state of emergency was declared, followed by martial law. A continuous political chaos followed this. Former President Yoon Suk Yeol faced an impeachment trial. Ultimately, the Constitutional Court of Kora upheld his impeachment. Following an early presidential election, President Lee Jae Myung took office on May 4th last month. Even during the political turmoil, the National Bio Committee carried out two official schedules. At its launch ceremony in January this year, the committee unveiled the "Republic of Korea Bio Grand Transformation Strategy." In its second meeting in May, it selected 10 key R&D areas, including AI-driven drug discovery·radiopharmaceuticals·gene therapies, and discussed development strategies. However, there was insufficient time to yield accomplishments. With the new administration taking power, the committee's existence became uncertain. As an organization established by presidential decree, it is not an independent body under law. It lacks authority in terms of organization, budget, and personnel. In other words, it can be abolished at any time with the new government. It is not uncommon for presidential committees to be abolished with the new administration. New governments often introduce new slogans, and various committees have also disappeared with changes in power. Will the National Bio Committee follow the same path? This is a point of concern for the industry. Given that the pharmaceutical and biotech industry development strategies proposed by the National Bio Committee were recognized for their industrial validity regardless of the administration, the potential disappearance of this newly launched committee is frustrating. In the biotech industry, sustainability is more important than speed. It typically takes over 10 years to develop a new drug and bring it to the global market. This industry operates on a different timeline than a government's five-year term. If industrial strategies are reset every time the government changes, it will be difficult for the Korean pharmaceutical and biotech industry to advance its global competitiveness. Even if the government changes, the core axis of industrial strategy must be maintained. The direction of breaking down walls between ministries and consolidating public and private capabilities should not disappear. Even if a committee is renamed, its symbolism and status as a direct presidential committee should be preserved.
- Company
- Pharmaceutical exports to U.S. have surged by 46%
- by Kim, Jin-Gu Jul 17, 2025 06:13am
- Korea-made pharmaceutical exports to the United States have surged. In the first half of this year, exports to the U.S. amounted to approximately KRW 1.53 trillion, a 46% increase compared to the same period last year. Notably, exports to the U.S. saw an exceptional surge in June. The export in June alone was almost the total of the preceding four months. This surge is interpreted as a precautionary measure to prepare for the potential impact of pharmaceutical tariffs. Korean pharmaceutical and biotech companies are preparing for tariff shocks by pre-stocking inventory in the U.S. Driven by increased exports to the U.S., South Korea's pharmaceutical export performance has broken previous records. In the first half, Korea-made pharmaceutical exports reached KRW 6.38 trillion, a 29% year-on-year (YoY) increase. Exports to U.S. surged… June alone accounts for half of total pharmaceutical exports According to the Korea Customs Service on July 17, South Korea's pharmaceutical exports to the U.S. in the first half of this year amounted to USD 1.11051 billion (approximately KRW 1.53 trillion). This is a 46% increase compared to USD 758.43 million in the first half of last year. Exports notably surged in June. Exports to the U.S. in a single month reached USD 458.38 million (approximately KRW 630 billion). This volume is equivalent to the export performance of the preceding four months (USD 475.82 million). The proportion of total pharmaceutical export performance accounted for by the U.S. also significantly expanded in June. Until then, the monthly share of exports to U.S. had been limited to 18% for two years, but it soared to 49% in June. This means nearly half of all pharmaceutical exports in June went to the U.S. Are they preparing for pharmaceutical tariff shock?… Enhanced stockpiling movement in the U.S. The pharmaceutical industry attributes the surge in pharmaceutical exports to the U.S. to the potential pharmaceutical tariffs by the U.S. government. U.S. President Donald Trump recently stated in a cabinet meeting that tariff of up to 200% could be imposed on imported pharmaceuticals. He estimated the tariff imposition timeline to be "1 to 1.5 years from now." Specific tariff rates and targeted items are expected to be announced by the end of this month. U.S. Commerce Secretary Howard Lutnick said, "Whether tariffs will be imposed on the pharmaceutical and semiconductor sectors will be determined after the investigation under Section 232 of the Trade Expansion Act concludes at the end of this month." Section 232 of the Trade Expansion Act details the Commerce Department to investigate the impact of imports on national security and enables the President to take responsive action. The U.S. government initiated an investigation related to this in April. Korean pharmaceutical and biotech companies have begun proactive responses. Notably, their response efforts are reported to have intensified since the U.S. government initiated the Section 232 investigation in April. A strategy of pre-exporting pharmaceuticals to U.S. local entities is being employed to stockpile inventory. For example, Celltrion plans to secure and maintain a two-year inventory in the U.S. in the short term. Separately, it has moved to secure a production base in the U.S., having signed contracts for local contract manufacturing (CMO) of products sold in the U.S., and is also considering acquiring companies with U.S. production facilities. Other companies with a significant share of exports to U.S. are also reported to have prepared similar strategies. An analysis suggests that the short-term surge in exports to U.S. is due to intensified efforts by these companies to stockpile local inventory. Pharmaceutical exports totaled USD 4.62 billion in the first half of the year… 29% increase YoY The expansion of exports to U.S. has driven the increase in overall pharmaceutical export performance. In the first half of this year, South Korea's pharmaceutical exports amounted to USD 4.6166 billion (approximately KRW 6.38 trillion). This is a 29% increase compared to USD 3.57795 billion in the first half of last year. This is the highest record for a half-year period. The previous record was USD 4.21219 billion in the second half of 2021. That period was most heavily influenced by the COVID-19 pandemic, with special demand, as exports surged with the full export of domestically produced COVID-19 vaccines. After that, exports returned to previous levels. Although there was a steady increase every half-year, half-yearly figures had never exceeded USD 4 billion until now. Pharmaceutical imports saw a slight increase from USD 4.45176 billion in the first half of last year to USD 4.6166 billion in the first half of this year. With exports increasing significantly and imports remaining at previous levels, the pharmaceutical trade balance has improved substantially. In the first half, the pharmaceutical trade balance recorded a surplus of USD 419.62 million. Previously, the only half-yearly pharmaceutical trade balance surplus was in the second half of 2020 (a surplus of USD 86.11 million).
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