Drug Pricing System Reform to Strengthen Patient-Centered New Drug Coverage
The government has announced a groundbreaking reform of the drug pricing system, significantly improving patient access to new drugs and promoting innovation in the domestic pharmaceutical industry. This reform aims to enhance patient-centered new drug coverage while encouraging pharmaceutical companies' research and development (R&D) investments, ultimately contributing to improved public health. The Ministry of Health and Welfare stated that this reform will improve the system so that patients can benefit from innovative new drug treatments more quickly and actively support the pharmaceutical industry to gain global competitiveness.
The core of this drug pricing system reform is improvements to the Risk Sharing Agreement (RSA), simplified submission of pharmacoeconomic evaluation data, and strengthened incentives for innovative pharmaceutical companies. In particular, RSA improvements are expected to play an important role in reducing uncertainty in the process of listing new drugs for insurance coverage and enabling patients to receive new drug treatments more quickly.
Risk Sharing Agreement (RSA) Improvements: Key to Expanding Access to New Drugs
The Risk Sharing Agreement (RSA) is a system that determines insurance coverage for new drugs in a way that pharmaceutical companies share a certain amount of risk when there is significant uncertainty about the effectiveness or safety of the new drug. This reform expands the scope of RSA application and simplifies procedures so that patients can have more diverse opportunities for new drug treatment. Specifically, RSA was previously applied only to life-threatening diseases or diseases without alternative treatments, but in the future, RSA will also be applicable to new drugs that significantly improve the quality of life. In addition, administrative burdens arising from the RSA contract process will be reduced by simplifying related procedures and shortening the review period.
An official from the Ministry of Health and Welfare said, “We expect that more patients will be able to enjoy the benefits of innovative new drug treatments through this RSA improvement,” and added, “We will continue to promote patient-centered policies to contribute to improving public health.”
Simplified Submission of Pharmacoeconomic Evaluation Data and Preferential Treatment for Innovative Pharmaceutical Companies
Submitting pharmacoeconomic evaluation data is required to register a new drug for insurance coverage, but it has been pointed out that this process is complex and time-consuming. Accordingly, the government plans to ease the requirements for submitting pharmacoeconomic evaluation data and simplify the review process to increase the speed of new drug market entry. In particular, priority review will be applied to new drugs developed by innovative pharmaceutical companies, and incentives such as preferential drug prices will be provided to actively encourage pharmaceutical companies' R&D investments. The government stated that it will actively support the domestic pharmaceutical industry to grow into an innovative entity with global competitiveness through these supports.
- Easing requirements for submitting pharmacoeconomic evaluation data
- Priority review and preferential drug prices for new drugs from innovative pharmaceutical companies
- Expanding R&D investment tax credits
Expected Effects and Future Tasks
This drug pricing system reform is expected to have a positive impact on increasing patient access to new drugs and promoting innovation in the pharmaceutical industry. In particular, it is expected that patients with rare diseases or severe diseases will be able to obtain new treatment opportunities through RSA improvements. In addition, simplified submission of pharmacoeconomic evaluation data and preferential treatment for innovative pharmaceutical companies are expected to contribute to revitalizing R&D investment in the domestic pharmaceutical industry and strengthening global competitiveness. However, in order for this reform to have a substantial effect, close cooperation with the pharmaceutical industry is necessary, and problems arising in the implementation process of the system must be continuously improved. The government stated that it will continue to develop the drug pricing system in a way that benefits both patients and pharmaceutical companies. It is scheduled to take effect in July 2024.
Through this drug pricing system reform, it is expected that a virtuous cycle structure will be established in which patients gain more treatment opportunities and the pharmaceutical industry grows through innovation. In the future, the government will continue to improve the system and strengthen policies for the socially vulnerable to improve public health. More details can be found on the Ministry of Health and Welfare website.