KPBMA Adopts Resolution Urging Delay of Drug Price Cuts...Warns of R&D and Supply Chain Collapse

First Board Meeting of the Year Held on the 10th

The Korea Pharmaceutical and Bio-Pharma Manufacturers Association (hereinafter referred to as KPBMA) announced that on the 10th it held its first board meeting of the year and unanimously adopted a resolution urging the National Health Insurance Policy Deliberation Committee to vote on, and the government to postpone the implementation of, the large-scale drug price reduction policy currently being pursued for domestically produced prescription drugs (generics).

In the resolution, the KPBMA board defined the domestic pharmaceutical industry as a core sector of health security that protects public health and lives. It stressed that even during national public health crises such as the COVID-19 pandemic, the industry has ensured a stable supply of medicines through domestic manufacturing and supply infrastructure.

The board pointed out that the government's unilateral and drastic push for price cuts focused on domestically produced prescription drugs is delivering a severe shock across the industry. It argued that if the price reductions are enforced, they will lead to a contraction in research and development investment, a decline in facility investment, workforce cuts, and a weakening of supply chains, which could ultimately collapse the industrial base.

In particular, it noted that because the domestic pharmaceutical industry secures most of its research and development funding on its own, large-scale price reductions will inevitably force companies to adopt survival strategies focused on short-term results rather than long-term research and development. This, it said, would damage the virtuous-cycle industrial structure driven by innovation and could lead to a decline in industrial competitiveness.

It also expressed concern that if worsening profitability leads to the suspension of production of delisting-prevention drugs and low-priced essential medicines, the stability of medicine supply could be shaken, resulting in the loss of the foundation of health security.

The board called on the government to: △ have the National Health Insurance Policy Deliberation Committee vote on and postpone the implementation of the large-scale drug price reduction plan; △ assess the impact of the price cuts on public health and employment; △ scrap the proposal to introduce a market-linked actual transaction price system; △ support the advancement of business structures at small and medium-sized pharmaceutical companies; and △ establish a government-industry governance framework that regularly discusses drug pricing policy and industrial development. It stated that if these demands are not accepted, it will pursue all possible response measures, including submitting a petition to the President, making a public appeal to the nation, and filing a petition with the National Assembly.

Chairman of the Board Yoon Woongseop said, "The ongoing discussions on overhauling the drug pricing system represent a policy that weakens the industry's research and development investment base and its future competitiveness," adding, "We will make every effort to create a policy environment in which industrial sustainability and the promotion of public health are harmonized." Chairman Noh Yeonhong also urged, "In order to establish a rational drug pricing policy and to leap forward as a global powerhouse in innovative new drugs, I ask all member companies to respond in a united front."

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