[Exclusive] 'World's Most Expensive Drug' Zolgensma to Be Covered by Health Insurance

Agenda Submission to the Health Insurance Policy Subcommittee on the 15th
Salary Application Confirmed from Next Month

High-Cost Treatment Drug in the US Priced at About 2.8 Billion Won
Out-of-Pocket Cost Reduced to 830,000 Won with Coverage

Concerns Over Health Insurance Fund Deterioration Grow as High-Cost Treatment Coverage Continues

[Asia Economy Reporter Chunhee Lee] The national health insurance coverage for Novartis' spinal muscular atrophy (SMA) treatment 'Zolgensma' (generic name 'onasemnogene abeparvovec'), known as the 'world's most expensive drug' with a dosage cost of about 2.8 billion KRW in the US, will be implemented next month.

According to related industries on the 15th, an agenda regarding the listing of Zolgensma on the drug reimbursement list will be submitted to the subcommittee of the Health Insurance Policy Deliberation Committee held that afternoon. If it passes the main committee meeting on the 20th, health insurance coverage will be applied. Although there is a possibility of rejection during the committee discussions, since price negotiations with the National Health Insurance Service have been completed and the submission to the committee has been confirmed, it is considered that the critical hurdle has been overcome. After related administrative procedures are completed, health insurance coverage for Zolgensma is expected to begin early next month.

SMA is a type of degenerative neurological disease where spinal motor neurons disappear, causing muscle weakness or loss. It is known to occur in about 1 in every 10,000 newborns. This means that 20 to 30 patients are diagnosed annually in Korea alone. Although there was no treatment method until now, recent advances in gene therapy have increased the possibility of treatment. In particular, Zolgensma is known as a 'one-shot therapy' that achieves near-complete cure with a single dose, raising high expectations among patients.

However, the high cost of treatment has caused hesitation. The dosage cost of Zolgensma is $2.125 million (about 2.8135 billion KRW) in the US and 167.07 million yen (about 1.588 billion KRW) in Japan. The domestic price is likely to be set at around 1.9 to 2 billion KRW, similar to the Japanese price level applied before the start of price negotiations using the exchange rate at that time.

Once health insurance coverage is applied, the burden on patients receiving Zolgensma is expected to decrease sharply. Considering the 10% co-payment rate applied under the special calculation exception for rare diseases, the out-of-pocket expense based on a 2 billion KRW price would be reduced to 200 million KRW. Furthermore, with the application of the out-of-pocket maximum payment system, the cost patients must bear for Zolgensma treatment will be reduced from a maximum of 5.98 million KRW to as low as 830,000 KRW.

Since President Yoon Seok-yeol promised health insurance coverage for rare and severe diseases during the presidential election, the reimbursement of high-cost treatments is expected to continue. Besides Zolgensma, the leukemia cell therapy 'Kymriah,' priced at 360 million KRW, has already been covered by insurance. Kymriah also limits patient expenses to between 830,000 KRW and 5.98 million KRW.

Additionally, treatments such as the amyloid cardiomyopathy drug 'Vyndamax' (annual cost 200 million KRW), neurofibromatosis drug 'Koselugo' (annual cost 200 million KRW), and hereditary retinal disease drug 'Luxturna' (1 billion KRW) are seeking insurance coverage. All are high-cost treatments worth several hundred million KRW. Notably, Vyndamax and Koselugo failed to pass the drug evaluation committee but are challenging the review again.

However, since the cost per dose of Zolgensma exceeds 1.9 billion KRW and must be borne by the health insurance fund, the continuous reimbursement of high-cost rare disease treatments raises ongoing concerns that it could deal a fatal blow to the already deteriorating health insurance finances.

In response, the government plans to introduce various risk-sharing schemes during the reimbursement process of high-cost drugs to manage this issue. On the 13th, Oh Chang-hyun, head of the Insurance and Drug Policy Division at the Ministry of Health and Welfare, explained at a National Assembly forum, "We intend to incorporate about three to four types of risk-sharing contract conditions to precisely secure financial uncertainty."

Risk-sharing schemes are systems that share risks with pharmaceutical companies based on actual drug usage and effectiveness. If the number of patients exceeds a pre-set limit or if the disease progresses or prognosis does not improve after treatment, the pharmaceutical company bears the full treatment cost or refunds part of the cost to the National Health Insurance Service. Previously, Kymriah, which was granted health insurance coverage, also applied risk-sharing schemes such as total expenditure caps and patient-level performance evaluations.