It was found on the 16th that Dong-A ST has applied to list Cenobamate, an epilepsy (seizure disorder) treatment, for reimbursement and that the Health Insurance Review & Assessment Service is reviewing the application. Cenobamate is a domestically developed new drug, but it has been sold overseas in the United States and Europe and was not prescribed in Korea, leading some patients to obtain prescriptions abroad. If Cenobamate becomes eligible for reimbursement, patients in Korea are expected to be able to receive prescriptions as early as next year.
Epilepsy is a condition in which nerve cells in a specific area of the brain become abnormally excited, causing repeated seizures. Cenobamate is considered to reduce seizures more than existing treatments. Cenobamate was developed by SK Biopharm, and Dong-A ST sells it after receiving a transfer of manufacturing technology.
◇ Reviewing Cenobamate reimbursement criteria
Cenobamate received approval from the Ministery of Food and Drug Safety in Nov. last year as a domestically developed new drug. Dong-A ST then applied for reimbursement listing, and HIRA is currently reviewing the reimbursement criteria. If it passes HIRA's reimbursement criteria, an economic evaluation will follow, after which the Ministry of Health and Welfare will order the National Health Insurance Service to begin drug price negotiations.
When price negotiations conclude, reimbursement is finalized through review and resolution by the Health Insurance Policy Deliberation Committee under the ministry. A Dong-A ST official said, "This process usually takes about one year," adding, "We aim to list Cenobamate for reimbursement in the first half of 2027 and launch it in Korea."
Although Cenobamate is a domestically developed new drug, it was launched overseas first. It received approval from the U.S. Food and Drug Administration (FDA) in 2019 and in Europe in 2021, and is being sold under the names "Xcopri" and "Ontozry," respectively. Cenobamate recorded sales in the 170 billion won range in the United States alone in the third quarter of last year. The company said the domestic launch was delayed because it took time to conduct clinical trials on Asian patients.
◇ A Korean new drug, but hard for domestic patients to get prescriptions… price tug-of-war, too
Industry officials say domestic drug prices affect new drug launches. Because low domestic prices make it hard to secure favorable pricing overseas, setting prices overseas first and then bringing the product into Korea is more advantageous in terms of profitability. According to the Korea Pharmaceutical and Bio-Pharma Manufacturers Association (KPBMA), as of 2021 the average price of domestic new drugs was 42% of the level in the Organization for Economic Cooperation and Development (OECD).
Sivextro, a domestically developed new drug by Dong-A ST, is also only available by prescription overseas. Sivextro is a super antibiotic that treats superbug infections resistant to existing antibiotics. Sivextro received U.S. Food and Drug Administration approval in 2014 and is being sold overseas.
Sivextro received approval in Korea in 2015 but was not launched, and the company voluntarily returned the approval in 2020. At the time, industry officials said the company abandoned domestic sales because the price was not high compared with overseas. A Dong-A ST official said, "We are not considering a domestic launch," adding, "The patent has expired, competing products (generics) have been launched, and because Sivextro was approved for a single indication, we believed the benefit to domestic patients would not be significant."
Boryung's hypertension treatment Kanarb is also locked in a tug-of-war over pricing. Kanarb was approved as a domestically developed new drug in 2010. It has entered Latin America and Asia, including Mexico and Singapore. Kanarb Family, a product line consisting of combination drugs derived from Kanarb, posted cumulative sales of 119.1 billion won in the third quarter of last year. That accounts for 15% of Boryung's revenue.
In June last year, ahead of the launch of generics, the ministry announced it would lower the price of Kanarb from 439 won to 307 won for the 30 mg strength. Boryung filed for an injunction to suspend the price cut against the ministry, and the Seoul Administrative Court accepted the request in Aug. last year. The ministry appealed, and the Seoul High Court dismissed the appeal. The ministry then dropped its re-appeal, finalizing the stay of execution. Kanarb will be able to maintain the existing price for the time being. A Boryung official said, "The main lawsuit seeking to cancel the price cut disposition is still ongoing."
◇ "A need for precise price design"
The government's drug pricing policy is tied to National Health Insurance finances. Raising prices can burden the insurance finances, so decisions must be made cautiously. However, excessive price cuts can affect the supply of new drugs. Even if domestic pharmaceutical companies develop new drugs, they may shun the domestic market due to reduced profitability.
Experts advise that a precise pricing policy is needed. Lee Hyeong-gi, a professor in the Department of Clinical Pharmacology at Seoul National University Hospital, said, "The Korean pharmaceutical market accounts for about 2% of the global market and is relatively small, but there are cases in which overseas prices are set with reference to domestic prices." He added, "A 'Korean passing' could occur, where companies avoid bringing products to Korea because domestic prices are low."
Hong Seok-cheol, head of the Seoul National University Health Finance Research Center (professor in the Department of Economics), said, "Expanding the existing risk-sharing scheme is one option," adding, "After setting reimbursement for a new drug, conditions could be attached so that if there is no meaningful effect, the pharmaceutical company refunds the difference." Jeong Hyeong-seon, a professor in the Department of Health Administration at Yonsei University, said, "Using a risk-sharing scheme can reduce the burden on domestic patients."
Hong said, "If unnecessary expenditure is cut and, instead, drug prices are well set for new drugs with high cost-benefit during price negotiations, it could be a win-win that brings effective new drugs into Korea and benefits patients' health."