Essential Medicine Shortages Demand Fundamental Solutions [AK Radio]

Recently, an emergency has arisen in the domestic medical community. On the 14th, the Seoul Medical Association issued a statement urging the establishment of fundamental measures to address the increasingly severe shortage of essential medicines. They pointed out that the supply shortage of medicines vital to public health, such as anticancer drugs, flu treatments, and antipyretic analgesics, has reached a critical level.

According to the Seoul Medical Association's statement, the currently out-of-stock medicines include the widely used anticancer injection 'Fluorouracil' for various cancer treatments, flu treatments 'Peramiflu' and 'Tamiflu,' antipyretic analgesic 'Tylenol,' various cough syrups and expectorants, some antibiotics, and digestive medicines. Especially with the winter season approaching and an expected increase in seasonal illnesses like colds and flu, the shortage of these essential medicines raises serious concerns about threats to public health.

National essential medicines are a concept created by the World Health Organization (WHO), referring to medicines that must be available domestically to protect public health. The Korean government adapts and designates these according to domestic circumstances. Currently, about 450 types of medicines are designated as essential medicines in Korea, with slight annual changes. Essential medicines are designated by their type or ingredient name rather than product names. For example, instead of a specific product name like 'Tylenol,' they are designated as 'acetaminophen tablets for antipyretic analgesia.' This is to encompass all medicines containing the relevant ingredient or efficacy, not just products from a specific company.

So why does the shortage of such important essential medicines occur? The Seoul Medical Association points to the issue of drug prices as the cause. According to their statement, "The prices of essential medicines are set so low that they cannot cover the pharmaceutical companies' production costs." As a result, pharmaceutical companies reduce or stop production, leading to scarcity.

Furthermore, the Seoul Medical Association raised criticism of the government's drug price policy. The government should at least raise drug prices annually in line with inflation through health insurance, but instead, it is lowering prices, worsening the environment for producing essential medicines.

This is not merely the medical community's claim. In fact, the government implements policies to suppress drug price increases as much as possible to maintain health insurance finances. Especially for older generic drugs, prices tend to decrease annually. While this reduces patient burden and stabilizes health insurance finances, it creates a structure where pharmaceutical companies incur losses the more they produce.

Following the rise in medicine prices, the prices of health functional foods and herbal medicines have also increased significantly, causing the health price index to rise at its largest rate in over 12 years. On the 18th, citizens were passing by a pharmacy in Seoul. Photo by Jo Yongjun jun21@

This situation also affects pharmaceutical companies' management decisions. While it is a significant problem for patients when necessary medicines are not produced, pharmaceutical companies cannot produce drugs at a loss. This is an important issue that can impact pharmaceutical companies' performance and stock prices.

However, this problem cannot be solved simply by raising drug prices. It requires comprehensive consideration of health insurance finances, patient burden, and pharmaceutical industry development. The government has the responsibility to reduce citizens' medical expenses and maintain health insurance finances stably. Therefore, unconditional drug price increases are realistically difficult.

To resolve this dilemma, the government operates the 'Exit Prevention Medicine' system. This designates particularly important essential medicines with low profitability and high risk of production discontinuation, guaranteeing a certain level of margin. Currently, about 600 items are designated as Exit Prevention Medicines, and pharmaceutical companies cannot arbitrarily stop production of these drugs; withdrawal requires consultation with the government.

For medicines designated as Exit Prevention Medicines, the government guarantees a certain margin and provides small 'usage incentives' when doctors prescribe these medicines, maintaining supply. This can be seen as the government's effort to ensure stable supply of essential medicines.

Nevertheless, shortages still occur despite these efforts, indicating the need for additional measures. Particularly, the supply of raw materials is also a critical factor. Many raw materials are imported from overseas countries such as China and India, so international situations or exchange rate fluctuations can disrupt supply.

Experts agree that comprehensive measures such as developing and expanding domestic raw material production, improving the pharmaceutical distribution system, and flexible operation of drug price policies are necessary. There are also calls for close cooperation among the government, pharmaceutical industry, and medical community to ensure stable supply of essential medicines.

Meanwhile, this shortage crisis has raised awareness of the importance of medicine supply. It is not merely a matter of whether medicines are available or not, but a significant social issue directly linked to public health. Therefore, voices are growing that stable supply should be the top priority in future pharmaceutical policy formulation.

The shortage of essential medicines is not only a problem in Korea. The WHO created the concept of essential medicines because such issues occur worldwide. Thus, seeking global solutions through international cooperation and information exchange is also an important task.

[Image source=Reuters Yonhap News]

Moreover, the development of the pharmaceutical industry is a crucial factor for stable supply of essential medicines. Enhancing the competitiveness of the domestic pharmaceutical industry, expanding research and development (R&D) investment to develop new drugs and improve production technology can be a long-term solution. Balanced government support and private investment are necessary. Additionally, increasing transparency in the production and supply system is an important task. A system that accurately tracks and manages which medicines are produced in what quantities and through which channels should be established. This will allow early identification and preparation for medicines at risk of shortage.

Finally, public awareness regarding medicine use also needs improvement. Reducing unnecessary medicine use and fostering a culture of appropriate use of necessary medicines is important. This not only helps resolve supply imbalances but also contributes to improving public health and reducing medical expenses. Ultimately, solving the essential medicine shortage requires skillful operation of government drug price policies, smooth consultation with pharmaceutical companies, and efficient production-distribution-import management systems. This will prevent patients from suffering due to the inability to obtain necessary medicines. Essential medicines, the last bastion protecting public health, require efforts from all sectors of society now more than ever. When the government, pharmaceutical industry, medical community, and the public unite to solve this issue, we can achieve true public health security.

Editor's Note

This content is also available as a podcast on Asia Economy's economic podcast 'AK Radio.' AK Radio is a platform that provides investors with essential information on politics, economy, international affairs, tech, bio, and digital trends. Clicking the video play button within the article allows you to hear the reporter's actual voice. This article is a reorganization of the broadcast content on AK Radio through ChatGPT.

This content was produced with the assistance of AI translation services.