Pricing and Reimbursement Pathways of New Orphan Drugs in South Korea: A Longitudinal Comparison

New drug accessibility and budgetary impact in South Korea: policy challenges and implications

BACKGROUND

To compare the accessibility indicators for new drugs in South Korea with those in the United States, Europe, and Japan, and examine the structure of pharmaceutical expenditures in South Korea.

RESEARCH DESIGN AND METHODS

Patient accessibility and budget impacts of new drugs were analyzed using two independent datasets. Accessibility was evaluated for 171 drugs approved between 2013 and 2022 based on reimbursement rates, time to listing post-approval, and international comparisons. Budget impact analysis covered 226 new drugs listed from 2012 to 2021, assessing expenditure patterns with an emphasis on risk-sharing agreements and financial implications for the National Health Insurance budget.

RESULTS

Among the 171 new drugs approved between 2013 and 2022, 67.8% were reimbursed as of 1 January 2024. Approval-to-reimbursement timelines varied by drug type and pricing pathway, with drugs listed via the weighted average price pathway receiving faster reimbursement than those evaluated through pharmacoeconomic evaluation. Between 2012 and 2021, new drugs constituted 8.5% of total pharmaceutical expenditures, with oncology drugs incurring the highest annual expenditure per product. Expenditure on new drugs peaked in 2019 but declined thereafter.

CONCLUSIONS

While South Korea has effectively controlled pharmaceutical expenditures, allocations for new drugs remain low compared to other major countries.

The role of public health in rare diseases: hemophilia as an example

Introduction

The role of public health has evolved from addressing infectious diseases to encompass non-communicable diseases. Individuals with genetic disorders and rare diseases constitute a particularly vulnerable population, requiring tailored public health policies, practical implementation strategies, and a long-term vision to ensure sustainable support. Given the prolonged duration and significant costs often associated with these conditions, comprehensive, patient-centered, and cost-effective approaches are essential to safeguard their physical and mental well-being.

Aims

To summarize definitions and concepts related to health, public health, rare diseases, and to highlight the role of integrating public health interventions into routine care in improving patient outcomes. Hemophilia was selected as an exemplary rare disease due to its significant lifetime treatment costs and the recent approval and pricing of its gene therapy as the world's most expensive drug, highlighting the critical importance of public health policies in ensuring equitable access to care and treatment.

Methods

A narrative literature review was conducted between July 2023 and December 2024, searching PubMed, Google Scholar, and Google for various topics related to rare diseases, public health, and hemophilia.

Results

Public health can play an important role in improving the health outcomes of people with rare diseases by implementing conceptual and applied models to accomplish a set of objectives. Over the past two decades, legislative and regulatory support in high income countries (HICs) has facilitated the development and approval of diagnostics and treatments for several rare diseases leading to important advancements. In contrast, many low- and middle-income countries (LMICs) face obstacles in enacting legislation, developing regulations, and implementing policies to support rare disease diagnosis and treatment. More investment and innovation in drug discovery and market access pathways are still needed in both LMICs and HICs. Ensuring the translation of public health policies into regulatory measures, and in turn implementing, and regularly evaluating these measures to assess their effectiveness is crucial. In the case of hemophilia, public health can play a pivotal role.

Conclusion

Enhancing public health surveillance, policies, and interventions in hemophilia and other rare diseases can bridge data gaps, support access to equitable treatment, promote evidence-based care, and improve outcomes across the socioeconomic spectrum.

Systematic Literature Review of Access Pathways to Drugs for Patients with Rare Diseases

OBJECTIVE

This article reviews the assessment pathways that have been implemented worldwide to facilitate access to drugs for patients with rare diseases.

METHODS

The Preferred Reporting Items for Systematic reviews and Meta-Analyses (PRISMA) guidelines were used to conduct a systematic literature review. The Ovid (Embase/MEDLINE), Cochrane, Web of Science, Econlit, National Institute of Health Research, Centre for Reviews and Dissemination, and International Network of Agencies for Health Technology Assessment databases were searched. Two independent reviewers screened all titles and abstracts; one reviewer did the full-text review and data extraction. Data were extracted on study general characteristics, general aspects of rare diseases, source of funding, allocation of public resources (e.g., use of health technology assessment), and pricing strategies. Assessment pathways were classified as: (1) separate processes; (2) exception to standard process; (3) standard process with no change; and (4) alternative process. Each assessment pathway was characterized based on its unique characteristics specific to rare diseases focusing on whether they targeted specific aspects of the process, utilized particular methodologies during the evaluation of the evidence, or considered specific attributes in the recommendation.

RESULTS

A total of 5604 unique citations were screened and 158 were included for data extraction. Sixty-one assessment pathways were identified in 43 countries, categorized as separate processes (37%), exceptions to standard processes (32%), standard processes with no changes (26%), and alternative processes (5%). Some countries (10/43; 23%) have more than one assessment pathway available. Assessment pathways varied in their inclusion of a health technology assessment, source of funding, consideration of uncertainty, and pricing strategies.

CONCLUSIONS

The diversity of assessment pathways reflects the complexity of addressing access to treatments for rare diseases. Furthermore, most assessment pathways are from high-income countries; therefore, there is less clarity on what is happening in low- and middle-income countries.

Development of orphan drugs for rare diseases

Most rare diseases (orphan diseases) still lack approved treatment options despite major advances in research providing the necessary tools to understand their molecular basis and legislation providing regulatory and economic incentives to expedite the development of specific therapies. Addressing this translational gap is a multifaceted challenge, a key aspect of which is the selection of an optimal therapeutic modality to translate advances in rare disease knowledge to potential medicines known as orphan drugs. There are several strategies for developing orphan drugs for rare genetic disorders, including protein replacement therapies, small-molecule therapies (e.g., substrate reduction, chemical chaperone, cofactor, expression modification, and read-through therapies), monoclonal antibodies, antisense oligonucleotides, small interfering RNA or exon skipping therapies, gene replacement and direct genome-editing therapies, mRNA therapy, cell therapy, and drug repurposing. Each strategy has its own strengths and limitations in orphan drug development. Furthermore, numerous hurdles are present in clinical trials of rare genetic diseases because of difficulty with patient recruitment, unknown molecular physiology, the natural history of the disease, ethical concerns regarding pediatric patients, and regulatory challenges. To address these barriers, the rare genetic diseases community, including academic institutions, industry, patient advocacy groups, foundations, payers, and government regulatory and research organizations, must become engaged in discussions about these issues.

Comparative policy analysis of national rare disease funding policies in Australia, Singapore, South Korea, the United Kingdom and the United States: a scoping review

BACKGROUND

Rare diseases pose immense challenges for healthcare systems due to their low prevalence, associated disabilities, and attendant treatment costs. Advancements in gene therapy, such as treatments for Spinal Muscular Atrophy (SMA), have introduced novel therapeutic options, but the high costs, exemplified by Zolgensma® at US$2.1 million, present significant financial barriers. This scoping review aimed to compare the funding approaches for rare disease treatments across high-performing health systems in Australia, Singapore, South Korea, the United Kingdom (UK), and the United States (US), aiming to identify best practices and areas for future research.

METHODS

In accordance with the PRISMA-ScR guidelines and the methodological framework by Arksey and O'Malley and ensuing recommendations, a comprehensive search of electronic databases (Medline, EMBASE, and Cochrane) and grey literature from health department websites and leading national organizations dedicated to rare diseases in these countries was conducted. Countries selected for comparison were high-income countries with advanced economies and high-performing health systems: Australia, Singapore, South Korea, the UK, and the US. The inclusion criteria focused on studies detailing drug approval processes, reimbursement decisions and funding mechanisms, and published from 2010 to 2024.

RESULTS

Based on a thorough review of 18 published papers and grey literature, various strategies are employed by countries to balance budgetary constraints and access to rare disease treatments. Australia utilizes the Life Saving Drugs Program and risk-sharing agreements. Singapore depends on the Rare Disease Fund, which matches public donations. South Korea's National Health Insurance Service covers specific orphan drugs through risk-sharing agreements. The UK relies on the National Institute for Health and Care Excellence (NICE) to evaluate treatments for cost-effectiveness, supported by the Innovative Medicines Fund. In the US, a combination of federal and state programs, private insurance and non-profit support is used.

CONCLUSION

Outcome-based risk-sharing agreements present a practical solution for managing the financial strain of costly treatments. These agreements tie payment to actual treatment efficacy, thereby distributing financial risk and promoting ongoing data collection. Countries should consider adopting and expanding these agreements to balance immediate expenses with long-term benefits, ultimately ensuring equitable access to crucial treatments for patients afflicted by rare diseases.

Variables affecting new drug prices in South Korea's pricing system

Objective: The price of pharmaceuticals is important from the economic and industrial perspectives but as well as patients' access to treatment. This study aimed to analyze the variables affecting the prices of new drugs in South Korea's pricing system. Methods: Data on 192 new drugs listed in South Korea from 2012 to 2022 were collected from the official website of the Health Insurance Review and Assessment Service. The independent variables included drugs for severe diseases, alternatives, number of patients, number of advanced 7 countries listed, budget impact, and listing period. The dependent variables included annual treatment cost and the price ratio to the advanced 7 country's average adjusted price. Descriptive statistics of variables, linear correlations between quantitative independent and dependent variables, and associations between independent and dependent variables were analyzed. Results: The mean annual treatment cost and price ratio to the advanced 7 country's average adjusted price were higher for drugs for severe diseases and those with no alternatives. Annual treatment cost and price ratio to the advanced 7 country's average adjusted price were negatively correlated with the number of patients and positively correlated with the number of advanced 7 countries listed. Annual treatment cost was affected by the variables drugs for severe diseases, alternatives, number of patients, number of advanced 7 countries listed, and budget impact. The price ratio to the advanced 7 country's average adjusted price was affected by drugs for severe diseases, alternatives, and the number of patients. Conclusion: This study revealed the effect of different variables on the prices of new drugs in South Korea, allowing for the development of a more effective assessment system to evaluate the prices of new drugs while ensuring profitability for pharmaceutical companies, sustainability of public insurance, and accessibility to drugs by patients.

Clinical use of dimethyl fumarate in multiple sclerosis treatment: an update to include China, using a modified Delphi method

Dimethyl fumarate (DMF) is a widely used oral disease-modifying therapy for multiple sclerosis (MS). Its efficacy and safety profiles are supported by over a decade of experience. Differences exist between Asia and Europe/United States in the prevalence and characteristics of MS; most data for DMF are derived from populations outside Asia. DMF was recently (2021) approved for use in China. The objectives of this review were to evaluate the evidence for DMF's profile, to provide an update to healthcare providers on current knowledge surrounding its use and to assess the relevance of existing data to use in China. This study used a modified Delphi method based on the insights of a scientific Steering Committee (SC), with a structured literature review conducted to assess the data of DMF. The literature review covered all papers in English (from 01 January 2011 to 21 February 2022) that include 'dimethyl fumarate' and 'multiple sclerosis', and their MeSH terms, on PubMed, supplemented by EMBASE and Citeline searches. Papers were categorized by topic and assessed for relevance and quality, before being used to formulate statements summarizing the literature on each subject. SC members voted on/revised statements, requiring ⩾80% agreement and ⩽10% disagreement for inclusion. Statements not reaching this level were discussed further until agreement was reached or until there was agreement to remove the statement. A total of 1030 papers were retrieved and used to formulate the statements and evidence summaries considered by the SC members. A total of 45 statements were agreed by the SC members. The findings support the positive efficacy and safety profile of DMF in treating patients with MS. Limited Chinese patient data are an ongoing consideration; however, based on current evidence, the statements are considered applicable to both the global and Chinese populations. DMF is a valuable addition to address unmet MS treatment needs in China. Registration: Not applicable.

Introduction of managed entry agreements in Korea: Problem, policy, and politics

Objectives: This study aimed to understand Managed Entry Agreements (MEAs) in Korea through the framework of three streams of the policy window model and its practical management and impact on pricing and reimbursement scheme. Methods: An extensive literature review based on Kingdon's model was conducted. We also performed descriptive analyses of MEA implementation using data on medicines listed in Korea and compared its MEA scheme with four different countries. Results: As per problem streams, patients with rare disease or cancers have considerable difficulties in affording their medicines and this has challenged the drug benefit system and raised an issue of patient's access. Policy streams highlighted that MEAs were introduced as a benefit enhancement plan for four major diseases since January 2014. MEAs have also been strengthened as a bypass mechanism to expand the insurance coverage especially for new premium-priced medicines under Moon Care (Listing all non-listed services). In descriptive analysis of MEAs, a total of 48 medicines were contracted as MEAs from January 2014 to December 2020, accounting for 73.4% of listed medicines for cancer or rare diseases and 97.9% of the cases were finance-based contracts. Meanwhile, outcome-based contracts such as CED accounted for only 2.1%. The application of MEAs differs across countries, resulting in a kappa coefficient of 0.00-0.14 (United Kingdom 0.03, Italy 0.00, Australia 0.14), indicating a lack of consistency compared to South Korea. Conclusion: MEAs, which were introduced as a bypass mechanism, have now superseded the standard process for anticancer agents or orphan drugs. Further studies are needed to evaluate the impact of the confidential agreements and effectiveness of new high-priced medicines with limited clinical data at launch.

Effect of the copayment reduction system on accessibility to orphan drugs in South Korea

OBJECTIVE

This study aims to analyze the effect of the copayment reduction system on accessibility to orphan drugs (ODs) in South Korea.

METHODS

Data on approval and reimbursement for drugs designated as ODs for the last 10 years (2012-2021) in South Korea were extracted. Among them, with 136 approved products as of 31 December 2022, the reimbursement rates and lead time to reimbursement between drugs for rare diseases (DRDs) and nondrugs for rare diseases (non-DRDs) were analyzed. The pricing and reimbursement (P&R) pathways between drugs for only rare diseases (DORDs) and drugs for rare and cancerous diseases (DRCDs) were compared.

RESULTS

The reimbursement rates for DRDs and non-DRDs were 54.8% and 33.3%, respectively, and the lead time to reimbursement for DRDs and non-DRDs were 16.1 months and 31.2 months, respectively. The P&R pathways for DORDs and DRCDs were pharmacoeconomic evaluation waivers (21.7% and 52.6%), weighted average price (52.2% and 13.2%), and risk-sharing agreement (30.4% and 81.6%).

CONCLUSION

The copayment reduction system may act as a driver and also barrier for the reimbursement of ODs. To expand treatment accessibility to ODs, it is necessary to consistently grants benefits in all processes from OD designation to market access.

Cell and gene therapy regulatory, pricing, and reimbursement framework: With a focus on South Korea and the EU

Ever since relevant bioengineering technologies have sufficiently matured to the platformizable commercialization stage, a slew of money has flocked to the cell and gene therapy market over the last few years, resulting in an abundance of clinical studies in the field. Newer modalities have brought up a string of regulatory and legislative tasks, such as developing guidelines and legislative rules to systematically regulate newer pharmaceutical products. Accordingly, another layer of legislation and guidelines tailored for cell and gene therapies has been introduced and is expected to evolve on par with technological progress. Furthermore, authorities have shifted to pricing and reimbursement policies that can share risks for cost and outcome among stakeholders altogether, such as developers and the government, while expanding the accessibility of patients to innovative cell and gene therapies. This review attempts to capture the salient regulatory features of the cell and gene therapy market in the context of South Korea and the European Union and points out where two sovereign entities currently stand on each policy element and how each tackles regulatory challenges. We can observe the converging trend where regulatory, pricing and reimbursement rules of adjoining countries in the supranational union or member countries of a consortium are getting more aligned. Evidently, concerted efforts to share regulatory science knowledge and embrace reference pricing have played their parts. The authors argue that policy priorities should be placed on initiatives to harmonize with other medical authorities to better the rights of patients and clear out the uncertainties of developers, ultimately to share and advance regulatory science and layout forward-looking policies at opportune times.

Trends in orphan drug use and spending among children and adolescents during 2010-2020 in Korea

Background: Since 2014 in Korea, the Ministry of Food and Drug Safety has designated orphan drugs (ODs) for the treatment of rare diseases. This study investigated the market share and 20 most frequently prescribed therapeutic subgroups of ODs among children and adolescents in Korea. Methods: This study referenced the Korean national health insurance database from January 2010 through December 2020. The outcome measures were the number of prescriptions and expenditures on ODs. Results: Among children aged 0-12 years, the number of patients using ODs increased from 11,264 in 2010 to 14,017 in 2020. Expenditures on ODs and their proportion of total pharmaceutical expenditures also tripled from 13.3 million USD (1.2%) in 2010 to 46.4 million USD (6.2%) in 2020. Among the overall population and adolescents aged 13-17 years, the percentage of total pharmaceutical expenditures for ODs increased from 0.4% in 2010 to 3.2% in 2020 and from 2.1% in 2010 to 11.2% in 2020, respectively. The highest numbers and drug costs of child patients were for H01 (pituitary and hypothalamic hormones and analogues, 44,839) and A16 (other alimentary tract and metabolism products, 160 million USD). The individual ODs with the highest drug costs were A16AB09 (idursulfase, 82.4 million USD) and M09AX07 (nusinersen, 36.2 million USD). Conclusion: Although the market size of ODs remained small in Korea, both the number of approved ODs and the proportion of total pharmaceutical expenditures for ODs have increased. Additional policies related to designation and reimbursement should be put in place to ensure timely access to ODs.