MSD Korea said it would raise the price of Gardasil 9, a vaccine to prevent cervical cancer, in the second half of 2022, following the price hike last year. The decision drew criticism from both consumers and physicians.
MSD Korea decided to increase the supply price of Gardasil 9 from July 1. It started notifying hospitals and clinics of the price change on Monday last week.
In April last year, the company lifted the price of the cervical cancer vaccine by 15 percent.
In July this year, it plans to seek another 8.5 percent hike.
Under the plan, the supply price of Gardasil 9 will go up from 134,470 won ($104.75) to 145,900 won.
“The company evaluates the product’s price adequacy annually to continue developing and supplying innovative drugs and vaccines. Our price policy reflected the evaluation result,” MSD Korea said.
The global demand for human papillomavirus (HPV) vaccines expanded over several years. The company is investing a considerable amount of capital in expanding production facilities to meet the demand, MSD Korea added.
Gardasil 9 has had a chronic problem of the supply shortage worldwide. MSD recently invested about $1 billion to secure production lines and boost the output to resolve the issue.
“The company is doing its best to minimize confusion of physicians and consumers regarding the change in the supply price of Gardasil 9,” MSD Korea said. “To ensure that the necessary quantities are supplied to the market, we prioritize inventory management and collaboration with a partner company.”
The company made such remarks to prevent hospitals from hoarding Gardasil 9 in advance, which could cause a supply shortage, which is precisely what happened last year.
In April last year, MSD Korea decided to raise the prices of three vaccines -- Gardasil, Gardasil 9, and RotaTeq. The company placed a month of notice period to send letters to hospitals and update information with drug sales representatives.
Some hospitals, which learned about the price increase plan early, ordered MSD vaccines on a large scale and caused a supply shortage. As confusion mounted at hospitals, the Korean Association of Obstetrics & Gynecology (KAOG) criticized MSD Korea’s unanimous price increase of the vaccines.
To avoid making the same mistake, MSD Korea noticed the price hike plan two months earlier so that hospitals and clinics could prepare for it sufficiently.
In May and June, hospitals and clinics can pre-order Gardasil 9 in the desired quantity before the price goes up, and MSD Korea prepared enough vaccines to meet the demand, the company added.
Despite the company’s preparation, it will face consumers’ criticism inevitably because an increase in the supply price of the vaccine pushes up the retail price.
According to the Health Insurance Review and Assessment Service’s (HIRA) survey on 484 obstetrics and gynecology hospitals, Gardasil 9 – requiring three shots -- costs 606,014 won on average.