Beginning this month, Dong-A ST will not be able to receive insurance benefits for its gastritis therapy Stillen, which the company said has “gastritis prevention effect by taking NSAIDS (non-steroid anti-inflammatory analgesic drug).”
The reexamination of its clinical usefulness has concluded its efficacy is “uncertain,” officials said.
Accordingly, the therapy is allowed to maintain “gastritis prevention effect” in its approved contents but will not be able to be applied by medical insurance benefits for that indication, they added.
However, it will continue to receive insurance benefits for other indications, such as bleeding and flare caused by acute and chronic gastritis and flare.
Dong-A ST동아ST will unlikely make additional refund other than the medicine cost of 11.9 billion won ($10 million) it was supposed to refund to National Health Insurance Service(NHIS)국민건강보험공단.
According to a high court’s mediation, if clinical usefulness isn’t recognized, companies have to pay 30 percent of pharmaceutical spending dispensed as medical care expenses to NHIS, for the period from the next day of canceling the lawsuit to its public noticing, within five months. As the conclusion was not “non-recognition” but “uncertainty” of clinical usefulness, the company has avoided making additional refunds.
Why did the controversy begin on Stillen’s removal from insurance benefits?
The controversy began in 2014 when the Ministry of Health and Welfare (MOHW)보건복지부 limited medical coverage for the indication of Stillen because Dong-A ST had missed the deadline to submit the clinical trial results.
As the ministry said it would limit insurance benefits because the company violated procedural rules by failing to meet the deadline, Dong-A ST filed a lawsuit to cancel the change of standards for medical coverage with the administrative court, saying the exclusion from insurance coverage for missing the deadline was too harsh considering the purpose of the clinical tests was to confirm its clinical usefulness.
Dong-A ST won in the first trial. The ministry appealed against the ruling in the first trial, and a high court presented the mediation. If Dong-A ST accepts the mediation, it will have to cancel the lawsuit.
According to the mediation, Dong-A ST had to return 11.9 billion won to NHIS, reduce the drug cost of Stillen by 10 percent, and reassess its clinical usefulness. If clinical usefulness isn’t recognized, the company has to refund 30 percent of the drug price received as medical care expenses during the period from the next day of canceling the lawsuit to the day of its public announcement day, within five months.
The two sides accepted the mediation and Dong-A ST has to return 11.9 billion won over 2016-2017. It will return 4 billion won first and the remainder on two occasions in 2017.
The Drug Reimbursement and Evaluation Committee of Health Insurance Review & Assessment Service (HIRA)건강보험심사평가원 reassessed its clinical usefulness, the final stage stated in the mediation.
The committee has discussed the gastritis prevention effect of the drug since last year, but committee members almost agreed on the uncertainty of Stillen’s clinical usefulness as early as December.
What are the impacts of limited benefits on Dong-A ST?
Stillen’s sales have continued to fall since 2014 due to the appearance of generics on the market upon the expiry of its patent and the controversy over the limited insurance coverage. According to the public notice, its sales stood at 50.4 billion won in 2014, but dropped to 36.2 billion won in 2015 and 27 billion won last year.
“The gastritis prevention effect is still recognized, but the drug can’t get the medical coverage. The clinical usefulness assessment was related to the application of health insurance coverage,” a Dong-A ST official said. “The ministry opposes it because there have been no cases of recognizing insurance benefits for prevention purposes. Considering the fiscal aspects of medical insurance, we cannot help but accept the decision.”
Currently, Stillen is the only gastritis therapy that also has gastritis protection among its indications. Because Stillen doesn’t get the medical coverage about the effect, generics also can’t get the coverage with the same indication.
Dong-A ST predicts the controversy doesn’t affect the sales of Dong-A ST too much. Currently, only 10 percent of total Stillen prescription was about the gastritis prevention effect. After the expiry of patent and the release of generics, however, Stillen’s sale has steadily dropped.
“Because the sales of the incrementally modified drugs Stillen2X has increased, their sales portion is six to four. We expect the increased sale from Stillen2X. Also, because Stillen’s price is low even though it is an original drug, the controversy may not affect our sales,” the company official said.
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