On the 26th, plans to strengthen price compensation for medicines and establish a public-private joint response system to resolve disruptions in the supply of essential medicines passed the Health Insurance Policy Deliberation Committee (HIPDC).
The government plans to improve the designation criteria for "delisting-prevention medicines," whose production is halted due to worsening profitability, and expand price incentives to boost the stability of essential medicine supplies.
The Ministry of Health and Welfare finalized supply stabilization measures at the HIPDC that include building a full-cycle response system for stabilizing the supply and demand of essential medicines, improving the delisting-prevention medicine system, and introducing incentives for corporations that contribute to supply.
◇ Public-private consultative body expanded and reorganized…stronger response for substitute prescribing and dispensing
First, the government will expand and reorganize the public-private joint consultative body to respond to unstable medicine supply situations. It will shift the currently operating National Essential Medicines Stable Supply Council to a co-chair system led by the Ministry of Health and Welfare and the Ministery of Food and Drug Safety, and expand participation to the medical community, the pharmacy sector, the pharmaceutical industry, and patient groups to build a structure that responds preemptively when a supply disruption risk arises. The consultative body will be implemented in Nov.
The government said it will strengthen interagency information sharing and tailored response systems to address supply disruptions caused by various factors, including raw material supply bottlenecks, tighter manufacturing standards, and low profitability.
A response system will also be prepared to reduce confusion in prescribing and dispensing in the field. When medicine supply instability occurs, guidance will allow same-ingredient substitute prescribing at the prescribing stage, and at the dispensing stage, the system for sharing information with physicians after substitute dispensing will be upgraded.
◇ Expanded designation of delisting-prevention medicines and higher cost-recovery standards
The delisting-prevention medicine system will be overhauled in full for the first time since its introduction. Delisting-prevention medicines are those that are essential for patient care but have low economic viability and require production or import cost recovery. Currently, 622 items are designated.
The government will raise the designation criteria by 10% and expand eligible items by prioritizing the inclusion of drugs of high importance in clinical settings among national essential medicines.
Cost-recovery standards will also be strengthened. The annual claims threshold for low-priced medicines will be raised from 1 billion won to 5 billion won, and a system will be introduced to promptly reflect increases in raw material prices in medicine prices.
In addition, reflecting the importance in clinical settings and efforts for stable supply, a policy add-on of up to 10% will be newly established, and the methods for calculating manufacturing expenses and labor costs will be adjusted to fit reality.
A new "supply-stability leading corporations" system will also be introduced for pharmaceutical companies with a high share of delisting-prevention medicine supply. If a pharmaceutical company whose production share or claims share of delisting-prevention medicines is 20% or more lists a new generic medicine, an add-on price of up to 50% will be applied for four years. The government expects about 19 corporations to be eligible.
◇ Preferential pricing for "domestically sourced raw materials"…retroactive application to already listed medicines
The preferential pricing system to maintain the production base for essential medicines will also be expanded.
Preferential pricing of up to 68% will apply to items that need to maintain a production base, such as national essential medicines and injectable antibiotics that use domestically sourced raw materials, and pediatric medicines.
The preferential pricing period will also be extended from the current five years to at least 10 years. Previously applied mainly to newly listed medicines, it will now be applied retroactively to already listed medicines.
In addition, for items with price increases aimed at supply stability, the plan will also exclude the use–price linkage system from applying for a certain period.
The government also said it will strengthen contract frameworks that specify supply volume and duration so that compensation from price increases leads to actual supply stability, and it will consider clawing back preferential amounts if contracts are not fulfilled.
◇ 1,418 medicine supply stoppages in five years…46 already this year
These measures come amid repeated disruptions in the supply of essential medicines, prompting the judgment that a government-level response is needed.
According to the Ministery of Food and Drug Safety, from 2021 through the end of Feb. 2026, pharmaceutical companies reported a total of 1,418 cases of medicine production, import, and supply stoppages (shortages), covering 1,263 items.
By year, reported cases rose from 185 in 2021 to 254 in 2022 and 310 in 2023, then 291 in 2024 and 332 in 2025, showing an overall upward trend. As of the end of Feb. this year, 46 cases have already been reported.
The leading cause of supply stoppages was manufacturing source issues with 239 cases, followed by raw material supply issues with 157, profitability issues with 146, sluggish sales with 144, surging demand with 127, and administrative issues with 118.