South Korea’s pharmaceutical and biotech business warned that if the federal government proceeds with deliberate cuts to generic drug costs, home pharmaceutical firms may endure losses of as much as 3.6 trillion received (roughly $2.43 billion) yearly, whereas employment may decline by as many as 14,800 jobs.
The Emergency Response Committee for Drug Pricing Reform for the Growth of the Pharmaceutical and Biotech Trade held an emergency press convention on Dec. 22 on the KPBMA headquarters in Seocho-gu, Seoul, calling for a full reconsideration of the proposed pricing reform.
The committee consists of 5 organizations, together with the Korea Pharmaceutical and Bio-Pharma Producers Affiliation (KPBMA), the Korea Biomedicine Trade Affiliation, and the Korea Pharmaceutical Merchants Affiliation, the Korea Drug Analysis Affiliation, and the Korea Pharmaceutical Trade Cooperative.
Beforehand, the Ministry of Well being and Welfare reported to the Well being Insurance coverage Coverage Deliberation Committee final month a drug pricing reform plan that features decreasing reimbursement charges for generics and off-patent medication from the present 53.55% of unique drug costs to round 40%.
Yun Woong-seop, co-chair of the committee and CEO of Ildong Pharmaceutical, mentioned, “The pricing reform plan quantities to a declaration of give up for the way forward for the pharmaceutical business. With working margins at main pharmaceutical firms at simply 4.8% and web margins round 3%, profitability is already fragile, making it troublesome for South Korea to advance towards turning into one of many world’s prime 5 pharmaceutical powers if drug costs are reduce.”
Vice Chair Cho Yong-joon warned that the reform may set off drug provide shortages, whereas Vice Chair Ryu Hyung-sun, CEO of Dasan Pharmaceutical, mentioned large-scale job cuts can be unavoidable. Ryu mentioned that if generic drug costs are diminished in keeping with authorities plans, greater than 10% of the business’s 120,000 staff may lose their jobs, including that an assumed most worth reduce of 25% would lead to 14,800 layoffs.
In accordance with the committee, analysis and growth spending accounted for 12.0% of income amongst 169 listed pharmaceutical firms final 12 months, and 13.4% amongst 49 licensed progressive drugmakers. Whereas the federal government claims the reform will prioritize high-priced medication, the committee warned that components similar to diminished costs for newly listed medication and periodic worth adjustment mechanisms would in the end push reimbursement ranges right down to round 40%.
