The Korean health authorities have excluded Guerbet Korea’s Lipiodol from “shortage-prevention drugs,” signaling the resumption of drug pricing negotiations between the government and the drugmaker.
Lipiodol is the only contrast medium used in transarterial chemoembolization (TACE) procedures for liver cancer patients.
The Ministry of Health and Welfare’s health insurance policy review committee decided on Friday to eliminate Lipiodol from the list of shortage prevention drugs.
Korea adopted shortage-prevention drug system in November 1999 to prevent the shortages of low-priced but essential medicines and to encourage the production of such drugs. The policy aimed to prevent patients’ damages from a drug company’s discontinuation of a drug due to economic reasons.
If a medicine is designated as a shortage-prevention drug, the medicine supplier can neither sell the drug for less than 91 percent of the maximum drug price nor raise the drug price beyond a designated level.
Guerbet Korea recently demanded Lipiodol’s price be lifted to 262,800 won ($244.7) per 10-ml bottle, five times higher than 52,560 won, citing a supply shortage and losses incurred by not reflecting the rising costs of imports. The medical community raised concerns over a supply shortage.
Civic groups and liver cancer patients accused Guerbet Korea of seeking an excessive price hike and unfairly wielding its monopolistic power.
However, the ministry’s latest decision to take Lipiodol out of the shortage- prevention drugs list allows Guerbet Korea to proceed with drug pricing negotiations with the government normally.
The health insurance policy review committee also decided to renew the risk-sharing agreement (RSA) with Merck’s anticancer drug Erbitux for four years, with the maximum price set at 223,845 won.
Under an RSA between a pharmaceutical firm and the National Health Insurance Service (NHIS), the company shares the responsibility for uncertainties regarding the new drug’s efficacy and the impact on the NHIS’ finance. The company refunds a certain percentage of the drug payments to the NHIS under the agreement.
The government had RSAs with 16 drugs as of May.