[Reporter's Notebook] Ofev’s case shows why multinational pharmas overlook Korean market
The idiopathic pulmonary fibrosis (IPF) drug Ofev (nintedanib) will likely receive health insurance benefits only when its patent expires soon, reigniting the issue of access to new drugs in Korea.
Ofev won approval from the Ministry of Food and Drug Safety on Oct. 21, 2016, but has remained unreimbursed for nearly eight years.
Boehringer Ingelheim has made several attempts to bring Ofev into the reimbursement system but has been hampered by the drug's high price and comparisons with the alternative medicine pirfenidone.
With Ofev's patent expiring in January 2025, Boehringer Ingelheim is taking on the reimbursement challenge again.
In March, the company submitted economic evaluation data for Ofev. It is undergoing a reimbursement review at the Health Insurance Review and Assessment Service. It is expected to be an agenda item at the upcoming Pharmaceutical Reimbursement Evaluation Committee (PBEC).
In the meantime, Korean pharmaceutical companies have developed generics ahead of Ofev's patent expiration. Many drugmakers, including Yungjin Pharmaceutical, Daewoong Pharmaceutical, Hyundai Pharmaceutical, SAMA Pharmaceutical, and Chong Kun Dang, have reportedly completed bioequivalence tests or are preparing to apply for approval.
Therefore, even if Ofev passes the reimbursement review and enters the reimbursement system, the price of nintedanib will decrease to half the current price after the patent expiration. Analysts criticize the government for delaying reimbursement until its financial burden lessens, noting that this is a strategic decision by the government to reduce the financial burden by delaying the reimbursement of expensive drugs as long as possible.
Their reasoning is sound. The drug has received benefits in many countries, while Korean patients have had to pay more than 3 million won ($2,190) per month for Ofev for the past eight years. This, in turn, shows why the government has been criticized—prioritizing cost reduction over patients.
The case of Ofev is also often cited when global pharmaceutical companies discuss sidestepping Korea in new drug launches. Due to the low compensation system and complicated reimbursement process, global pharmaceutical companies do not prioritize the Korean market. Korean patients bear the brunt of the damage.
If this situation is repeated, global pharmaceutical companies will likely put Korea on the back burner when introducing innovative new drugs. Korean patients will have difficulty accessing the latest treatments on time.
This possibility is no longer hypothetical, as Korea's drug prices have now become a reference point for other countries. China and other countries have said they will use Korean drug prices as a reference point, and the low compensation system has begun to affect the global market beyond Korea.
As a result, global pharmaceutical companies are reportedly hesitating to launch new drugs in Korea while planning their strategies due to the country's low drug prices. Without a change in drug pricing policy, putting Korea on the back burner will likely no longer be a concern but a reality.
The Ofev case illustrates the issue of deprioritizing Korea in launch strategies and underscores the need for improvement.
Without policy changes to improve the efficiency of the benefits review process, adjust drug prices to reflect international standards, and improve drug access, Korea's pharmaceutical market, including the clinical trial market, will become increasingly uncompetitive. This will undoubtedly affect the global competitiveness of domestic pharmaceutical companies developing new drugs.
The government must actively improve the system to ensure that innovative new drugs can be quickly delivered to patients and create an environment that will not discourage global pharmaceutical companies from leaving the Korean market.
The Ofev case is a reminder that the domestic pharmaceutical market must reflect the needs of global pharmaceutical companies and patients in a balanced way.