A first-instance ruling is expected next month in a lawsuit that Boryung, a domestic pharmaceutical company, filed against the Ministry of Health and Welfare seeking to cancel the price cut of its hypertension drug Kanarb.
Kanarb is a flagship product that accounts for 15% of Boryung's sales, and the company has responded with a lawsuit after the ministry moved to cut the price. Depending on the court's decision, whether Kanarb's price will be cut will be determined, potentially affecting Boryung's sales and drawing industry attention.
On the 20th, according to the pharmaceutical industry and according to legal sources, the Seoul Administrative Court's Administrative Division 14 (presiding judge Lee Sang-deok) will hold a sentencing hearing on the 12th of next month in the first-instance case seeking to cancel the ministry's price-cut disposition for Boryung. It will be the court's first decision on Kanarb's pricing. Earlier, Boryung filed the lawsuit in June last year in protest of the Kanarb price cut, and two hearings have been held to date.
Kanarb is a domestically developed new drug by Boryung that was approved in 2010. In its first year on the market in 2011, it recorded 10 billion won in sales. The cumulative sales of the Kanarb Family, combination drugs derived from Kanarb, reached 119.1 billion won in the third quarter of last year. For hypertension, many patients do not see their blood pressure fall with a single medication, so other drugs are sometimes prescribed together. Kanarb has expanded its reach by creating combination drugs that merge such products into one.
Kanarb's compound patent expired in 2023, and competitors have entered the generics market. Ahead of generic launches, the ministry announced in June last year that it would lower the price of Kanarb from 439 won to 307 won for the 30 mg strength. The 60 mg would be reduced from 642 won to 450 won, and the 120 mg from 758 won to 531 won.
Boryung's position is to maintain Kanarb's price. Kanarb targets not only hypertension but also reduction of proteinuria in patients with type 2 diabetes chronic kidney disease accompanied by hypertension.
Because generics do not have the indication for reducing proteinuria, their therapeutic effect differs from Kanarb, Boryung said. Kanarb generics include Daewoong Bio Co.'s Kanaden, Dongkook Pharmaceutical's Pima Mono, and KOREA ARLICO PHARM's Alkanar.
A Boryung official said, "Follow-on medicines are limited to the hypertension indication, so their prescribing scope is narrow and it is difficult to fully replace Kanarb," adding, "The point is to cancel lowering the price by placing Kanarb and follow-on medicines on the same footing."
The ruling in this lawsuit is expected to affect Kanarb's sales. If the court accepts the price cut, a sales hit will be unavoidable. If the price cut is not accepted, Boryung will be able to defend its sales in the hypertension drug market.
Separately, Boryung filed for an injunction to stay execution, asking to halt the price reduction until the lawsuit is concluded.
The Seoul Administrative Court granted the request in Aug. last year, and although the ministry appealed, it was dismissed on second instance. The stay of execution was finalized as the ministry abandoned its further appeal. Kanarb can maintain its existing price for up to two months after the main lawsuit concludes.
Even if Boryung loses at first instance in the lawsuit to cancel the price-cut disposition, if it appeals and petitions to the Supreme Court and the case goes through the second and third instances, it is expected to be able to defend the price at least until the lawsuit is finalized. A Boryung official said, "It will protect the patent rights of original new drugs and boost corporations' research and development (R&D) commitment."