Advanced Regenerative Medicine Abused for Excessive Non-reimbursed Treatments, Hurting Indemnity Insurance... "Institutional Improvements Needed"

The Path to Popularization of Advanced Regenerative Medicine Opened in February, but Side Effects Are Intensifying
Medical Institutions Set Prices Arbitrarily, Worsening Indemnity Insurance Finances
Criteria for "Intractable Diseases" Among Treatment Targets Remain Ambiguous

An analysis has found that the popularization of advanced regenerative medicine, made possible by a legal amendment in February, is highly likely to trigger excessive non-reimbursed medical treatments. This is expected to become a major factor in worsening the finances of indemnity health insurance, leading to higher premiums for honest policyholders. (See the front page of The Asia Business Daily, August 6, ''Advanced Regenerative Medicine Focuses Only on ‘Innovation’... Patients Become ‘Non-reimbursed’ Test Subjects Without Clinical Evidence'')

The Korea Insurance Research Institute stated this in a report released on November 9, titled "The Impact of Introducing Advanced Regenerative Medicine Treatments on Indemnity Health Insurance." Advanced regenerative medicine refers to medical technologies that restore, maintain, or improve the function of damaged tissues or organs. Representative examples include stem cell therapy, immune cell therapy, and gene therapy.

Until recently, medical institutions faced strict regulations when attempting to provide advanced regenerative medicine treatments. However, the amendment to the "Act on the Safety and Support of Advanced Regenerative Medicine and Advanced Biopharmaceuticals" (commonly known as the Advanced Regenerative Medicine Act), which took effect in February, has lowered the entry barriers to the medical market. The amendment expanded the scope of clinical research subjects in advanced regenerative medicine from only severe, rare, and intractable diseases to all diseases. Even without completing Phase 3 clinical trials, if safety and efficacy are confirmed during clinical research, it is now possible to treat patients with severe, rare, and intractable diseases without approval from the Ministry of Food and Drug Safety.

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However, the issues of medical shopping and overtreatment, which are already significant social problems, are also occurring in the field of advanced regenerative medicine. Since advanced regenerative medicine is not covered by insurance, institutions can set prices at their own discretion. In fact, The Asia Business Daily has previously confirmed cases where the term "advanced regenerative" was used in marketing to justify even higher prices than other non-reimbursed treatments.

The Korea Insurance Research Institute also pointed out these issues. Currently, the prices for advanced regenerative medicine treatments vary widely: Cartistem costs between 5.7 million and 32 million won, Immuncell between 80,000 and 11 million won, and autologous bone marrow knee injections between 20,000 and 15 million won. The Ministry of Health and Welfare states that it monitors treatment costs reported by advanced regenerative medicine institutions through review committees. However, there is criticism from the medical community and civic groups that there are still no clear standards, and that most review committee members are from the medical field, making proper oversight unlikely.

The number of advanced regenerative medicine institutions is rapidly increasing by exploiting institutional loopholes. The number of institutions designated as advanced regenerative medicine providers has increased by about 30 each year, but as of August this year, 160 institutions have already been designated. According to the data, these include 44 tertiary hospitals, 50 general hospitals, 27 hospitals, and 39 clinics. Many plastic surgery clinics, dermatology clinics, and Korean medicine hospitals are also included.

The lack of clear criteria for "intractable diseases" among the eligible conditions for advanced regenerative medicine is also problematic. Article 2, Paragraph 6 of the Advanced Regenerative Medicine Act defines eligible patients as those with "serious diseases that are life-threatening or have no alternative treatment," "rare diseases as defined by Article 2, Paragraph 1 of the Rare Disease Control Act," and "other intractable diseases." In Korea, severe diseases are defined and managed under the National Health Insurance Act, and rare diseases under the Rare Disease Control Act. However, there is no specific law that directly defines intractable diseases, nor is there a clear medical definition. In 2019, the Rare Disease Control Act was amended to separate the concepts and definitions of "rare and intractable diseases" into "rare diseases" and "serious intractable diseases," but the Advanced Regenerative Medicine Act still uses the broad term "other intractable diseases." Kim Kyungseon and Cho Jaeil, research fellows at the Korea Insurance Research Institute, pointed out, "Because of the ambiguous definition of eligible patients, advanced regenerative medicine treatments could be offered to patients who do not actually require them," and "there is a risk of moral hazard, such as excessive treatment recommendations by medical institutions seeking insurance payouts."

The Korea Insurance Research Institute recommended that, for advanced regenerative medicine to provide genuine treatment opportunities for patients and for the industry to thrive, it must be offered at reasonable prices. The Ministry of Health and Welfare should provide reference prices for each treatment technology and establish price guidelines in advance. Kim Kyungseon and Cho Jaeil stated, "There is an urgent need to establish a legal basis for managing non-reimbursed prices, medical standards, and conduct," adding, "The responsible department should also define eligible patients more specifically through interpretations or guidelines."

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