The pharmaceutical and biotech industry said on the 10th that "joint research" is needed on the drug price cut policy that lowers the price of generic drugs to 40% of the original medicine. They said the government and industry should together examine the ripple effects of the price cuts.
The "emergency response committee for overhauling the drug pricing system for industrial development" (emergency committee) made the proposal at a press conference at the headquarters of the Korea Pharmaceutical and Bio-Pharma Manufacturers Association (KPBMA) on the day. The emergency committee is composed of seven organizations: the Korea Pharmaceutical and Bio-Pharma Manufacturers Association (KPBMA), the Korea Biomedicine Industry Association, the Korea Pharmaceutical Traders Association, the Korea Drug Research Association, the Korea Pharmaceutical Cooperative, the Federation of Korean Trade Unions, and the Korean Federation of Chemical Workers' Unions.
The emergency committee said, "If a drug price cut targeting domestically made prescription medicines is pushed through, investment in research and development and quality will shrink." It said that if generic drug prices fall, the sales base will weaken and the capacity to invest in research and development will inevitably diminish.
The emergency committee said, "In a complex crisis such as the Middle East situation, drug price cuts could lead to industrial collapse," adding, "production of essential medicines could be halted and jobs could be cut." It added, "Industry is already entering emergency management mode to survive."
The emergency committee said, "We propose that the government and industry launch joint research on topics such as the ripple effects of drug price cuts." It said joint research is needed on three agenda items: the impact of price cuts on public health and the industrial structure; institutional reform plans to establish order in pharmaceutical distribution; and advancement plans for the pharmaceutical and biotech industry.
The emergency committee plans to soon launch a signature campaign. It said it will convey on-the-ground views from corporate executives and employees and from stakeholders in the pharmacy sector.
Earlier, the government unveiled the first overhaul of the drug pricing system in 13 years. The plan lowers generic prices from 53%–39% of the original medicine to 40%. Drug price here does not mean the price a consumer pays at a pharmacy; it refers to the ceiling amount that national health insurance pays hospitals and pharmacies. The government's position is that because generic prices are high, domestic corporations rely on selling generics rather than developing new drugs. The pharmaceutical and biotech industry is urging a delay to the overhaul, citing concerns such as weakened industrial competitiveness.