'Access to innovative therapies in Korea hampered by rising costs, lengthy approval processes'

Access to essential medications in Korea has become increasingly complicated, with patients facing lengthy approval processes and rising costs. 

Recent advancements in treatment, such as Novartis’ T-cell immunotherapy Kymriah (tisagenlecleuce) and gene therapy Zolgensma (onasemnogene abeparvove), have underscored the challenges of securing affordable options, with prices soaring to hundreds of millions of dollars.

“New medications and concepts carry significant financial implications," said Jang Sung-in, head of the Health Insurance Research Institute at the National Health Insurance Service, during a forum, "K-Healthcare Business Forum," co-hosted by Korea Biomedical Review (KBR), The Korean Doctors' Weekly, and  Korea Health Industry Development Institute (KHIDI) on Wednesday. "Despite optimistic portrayals of the current health insurance budget, research suggests that a financial strain is expected by the 2030s, raising urgent questions about the reimbursement of new treatments."

The forum, titled, "Paying for Innovation in Healthcare: Who Bears the Cost," brought together representatives from pharmaceutical companies, regulatory agencies, and the government to share concerns and explore solutions regarding who will finance the numerous innovations emerging in the healthcare sector.

As total healthcare expenditures rise to approximately 107 trillion won ($80 billion), Gong Ji-ryoun, division director of the New Pharmaceutical Benefits Listing Division at the Health Insurance Review & Assessment Service (HIRA), emphasized the "urgent need for efficient approval and reimbursement mechanisms to ensure access to innovative therapies."

Radiopharmaceuticals raising global supply and cost concerns

Since the introduction of Novartis’ Gleevec (imatinib) in 2001, cancer treatment has evolved rapidly, introducing targeted therapies such as immuno-oncology agents, CAR-T cell therapies, and antibody-drug conjugates (ADCs).

Currently, radiopharmaceuticals are gaining attention for their ability to deliver targeted treatments directly to cancer cells using radioligands and radioactive isotopes, offering potential cures even for late-stage patients. However, only a few companies have exclusive access to these technologies and limited raw materials for production, raising urgent questions about the global supply of these therapies post-approval. 

“As these drugs pursue FDA and local health authority approvals, ensuring their availability in domestic markets will be a key focus in the industry,” said Jung Jae-ho, head of Value & Access at Novartis Korea, which develops an isotope called Lutathera (lutetium Lu 177 dotatate). Jung emphasized the importance of ensuring that isotopes arrive at the patient's location at least three days before treatment.

Developing radiopharmaceuticals presents significant challenges, with Jung noting that while Korean facilities can produce Lu 177, the real difficulty lies in mastering the expertise to adjust radiation intensity and formulate the isotopes into effective pharmaceuticals.

After production, the isotopes must be purified to ensure they bond properly with ligands before attaching to radioligands. “This intricate process requires three specialized factories and no single company possesses all the necessary technologies, fueling a competitive race for supply in the industry,” he explained. 

Timelines are tight, with production often scheduled within one to five days before treatment. Most drugs are imported from Europe, triggering a complex production process that begins upon receiving an order in Korea. “Any misstep can derail certification,” Jung warned, adding that local manufacturing facilities tailored to national needs could reduce risks and ensure timely access to these innovative drugs. “Perfect manufacturing can be thwarted by flight delays, forcing the discard of products if they arrive late.”

Given the critical three-day delivery window, countries like China and Japan are ramping up domestic manufacturing capabilities rather than relying solely on imports. The trend has shifted from chemotherapy to targeted therapies, immuno-oncology, and now to radioligand therapy. Korea's policies for enhancing coverage have evolved alongside these advancements.

Since implementing the coverage enhancement program in Korea, reimbursement rates have increased significantly, but this rapid expansion has exerted financial pressure on the public insurance system, leading to cost-reduction measures. Jung said plans are underway to cut prices on patented medications, reflecting the government’s efforts to balance expanding drug coverage while reducing costs for alternative or less critical medications. 

As of 2024, approximately 98 trillion won has been allocated for health insurance, but spending on rare and cancer medications remains low compared to common drugs. Jung expressed concern that this “raises questions about equity in resource allocation within a public insurance system that restricts budget distribution.”

Data from the U.S. indicates that Korea has lower coverage rates for various diseases, with only about 3 percent of medication expenditures in 2023 allocated to rare diseases. Projections show that foreign spending on rare diseases was about 15 percent in 2020, compared to just 8 percent in Korea in 2022—a gap likely exacerbated by lower prices.

“To improve coverage for cancer and rare disease medications, budget adjustments are necessary,” Jung said. “Funding for consistent quality should come from companies submitting reimbursement applications, as these companies are likely willing to bear such costs.”

Rising obesity rates and socio-economic disparities prompt calls for expanded healthcare coverage 

The complex relationship between obesity and socio-economic disparities in health outcomes is also drawing heightened scrutiny, prompting a reevaluation of obesity beyond just an individual issue. Health advocates are calling for expanded healthcare safety nets and preventive measures for vulnerable populations.

Obesity is now seen as a major health risk rather than just a lifestyle issue, as it contributes to non-communicable diseases that account for over 80 percent of global deaths. The World Health Organization (WHO) reports that approximately 890 million adults worldwide are overweight or obese in 2024. In Korea, 16.6 million individuals suffer from obesity and related chronic diseases, according to the Korea Disease Control and Prevention Agency’s 2023 fact sheet.

In response to this escalating crisis, Korea introduced its first comprehensive obesity management plan in 2018, targeting a 6.7 percent reduction in the national obesity rate by 2030. However, the current trajectory reveals a 3.6 percent increase in obesity rates since the plan's announcement.

“Examining how obesity is classified under the National Health Insurance Act is crucial,” said Cho Ji-hyun, legal, compliance & quality director at Novo Nordisk Pharma Korea. Currently, medical treatment for obesity is not covered by the National Health Insurance Act, while treatments for obesity-related complications—such as hypertension and diabetes—along with metabolic surgery, are covered.

The National Health Insurance Act mandates the Ministry of Health and Welfare (MOHW) to define coverage methods and limits. However, existing regulations allow for the exclusion of conditions that do not significantly impair daily activities, raising questions about obesity coverage. Conditions like mild ailments and non-severe infections may be classified as non-covered, complicating obesity treatment.

“This poses a dilemma as obesity varies greatly in severity based on an individual’s body mass index (BMI) and overall health,” said Cho. “The critical question remains whether it's justifiable to label all obesity cases as non-disabling conditions,” she added, calling for a more effective national healthcare strategy for obesity management.

The academic community in Korea is advocating for increased support for obesity treatments, including subsidies for obesity medications. Although metabolic surgery is covered under national health insurance, access remains limited, and its associated risks make it impractical for many struggling with obesity.

Aligning universal coverage criteria with WHO guidelines—where a BMI of 25 and above is classified as obese, and 23 to 25 as overweight—could “significantly broaden treatment eligibility but may strain the national health insurance budget,” Cho added. On the flip side, Cho added that setting strict criteria based on metabolic surgery qualifications could narrow coverage scope, potentially delaying timely medical intervention for obesity and exacerbating related chronic conditions.

The WHO has declared that obesity should be treated and prevented within health systems, underscoring the need for integration into national healthcare strategies. “Rather than simply debating the coverage of obesity treatments, we must focus on establishing clear criteria for defining obesity and determining appropriate coverage standards,” Cho said.

The introduction of high-cost drugs poses significant financial challenges for timely insurance coverage, leading to initiatives like the MOHW’s exemption of economic evaluation (EEE) policy and risk-sharing arrangements (RSAs), which have increased reimbursement rates from about 60 percent to approximately 80 percent.

“Despite these improvements, the swift listing of new treatments remains a critical concern, as lengthy evaluation processes and high medication costs continue to burden patients,” said Gong. “While differing perspectives and methodologies exist, the ultimate goal is enhancing patient access to new medications. The HIRA is committed to collaborating with the pharmaceutical industry to address challenges and improve accessibility for patients.”