The government is pushing to raise the licensing review fees for biosimilars (replica drugs of biological medicines). This expense is the cost pharmaceutical companies pay when undergoing reviews by the Ministry of Food and Drug Safety. The government plans to shorten the review period by increasing the specialized review personnel through the fee hike. This move is a continuation of President Lee Jae-myung's pledge to "intensively nurture the pharmaceutical and bio industry."
According to the financial authorities on the 14th, the Ministry of Finance is actively reviewing a proposal from the Ministry of Food and Drug Safety to adjust the biosimilar licensing review fee. Both the ministry in charge of the licensing review and the ministry that collects the fees are the Ministry of Food and Drug Safety, but it is the Ministry of Finance that determines the level of the fee. The Ministry of Food and Drug Safety can only increase the fee with the agreement of the Ministry of Finance. A Ministry of Finance official said, "We are currently in internal discussions about the fee increase."
Last September, the Ministry of Finance and the Ministry of Food and Drug Safety amended the "Regulations on the Fees for Licensing of Medicines and Related Matters" and raised the licensing review fee for synthetic medicines and biological new drugs from the existing 8.8 million won to 410 million won. The increased fee has been applicable since January 1 of this year. Following the increase for synthetic medicines and biological new drugs, biosimilar fees will also rise.
Currently, the licensing review fee for biosimilars is at the level of 8.8 million won. The Ministry of Food and Drug Safety has commissioned an external agency to conduct related research to set an appropriate review fee, which is expected not to exceed the levels of synthetic and biological new drugs.
The government believes that raising the fees will allow for an increase in the number of personnel reviewing medicines, ultimately reducing the review period. The pharmaceutical industry is not strongly opposed to this situation. An official from a pharmaceutical company stated, "It is better to incur a greater expense to receive more thorough and timely supplementary materials."
The licensing review fees are mostly used for the labor costs of reviewers with specialized qualifications, such as pharmacists and those with over three years of postdoctoral experience. Currently, the review personnel at the Ministry of Food and Drug Safety number 369, which is about 4% of the approximately 9,000 personnel at the U.S. Food and Drug Administration. As there are more reviewers in the United States, the approval speed is also 130 days faster than ours at 300 days. The licensing fee for new drugs is around 6.1 billion won.
The push for fee increases has gained momentum since June, when Oh Yu-kyung, head of the Ministry of Food and Drug Safety, remarked, "If the Ministry of Finance considers the (licensing fees for biological medicines) a bit more positively, it would be of great help." At that meeting, President Lee noted, "If we can increase the review expenses, we can expand the (review personnel) without a financial burden" and added, "The developers would want to pay more to expedite the process" and emphasized that "(the expansion of review personnel) also creates good jobs."
During the election, President Lee pledged the three major visions of recovery, growth, and happiness, promising support for the pharmaceutical and bio industry as part of growth. At that time, President Lee stated his intention to expand national investment and establish a stable supply system for essential medicines to leap forward as a pharmaceutical and biological powerhouse, and the current increase in biosimilar licensing review fees is interpreted as part of that extension.
Even if the fees rise, domestic corporations may have the potential for reductions in fees. The government is currently implementing a system that reduces fees by 50% to support small and medium-sized enterprises in developing domestic new drugs. Foreign parent companies' Korean branches or import agencies that import new drugs do not receive fee reductions. The government is also reviewing similar fee reductions for biosimilars.