2024-07-16 13:58:43
Interview with the American Biotechnology Trade Association ‘Pharma’
“Korea is a market where it is difficult to quickly launch new drugs. Under Korea’s national health insurance system, new drugs are available only after an average of 4 years (45.2 months) from their initial launch in the U.S. or Europe. This situation has a negative impact not only on Korean patients but also on Korean companies researching and developing new treatments.”
Richard Kane, vice president of international policy at PhRMA, said this in an interview with our newspaper after attending the Bio International Convention (Bio USA) held in San Diego last month. He said that the proportion of new drugs covered by our country’s health insurance is extremely low compared to the public health insurance in Japan and Germany.
Vice Chairman Kane and Philip Chen, Pharma’s Vice Chairman of Advocacy, visited Korea last week to discuss the difficulties faced by global pharmaceutical companies in launching new drugs with the Korea Research-based Pharmaceutical Industry Association (KRPIA).
Korea’s health insurance system is cited as one of the main reasons why global pharmaceutical companies are delaying their launches in Korea. It is also a major reason why pharmaceutical companies developing innovative medicines in Korea have difficulty attracting investment for research and development.
Vice Chairman Kane said, “Korea is a place where innovative biotechnology industries can be developed,” and added, “A balanced ecosystem that appropriately rewards and invests in innovation must be established to support this.”
| What is PhRMA? |
| Pharma is a representative pharmaceutical and biotechnology association in the United States, with global pharmaceutical and biotechnology companies as members. The representative biotechnology industry associations in the United States are BIO and Pharma, and BIO is an association that hosts the ‘Bio USA’ event, and many startups and venture companies that develop biopharmaceuticals are members. Both associations represent member companies and play a role in conveying and coordinating the opinions of the industry to the government. |
Q. First, I would like to ask about Pharma’s position on the US ‘Biosecurity Act’, which was also a hot topic at the Bio USA event.
The Biosecurity Act is a bill proposed by the US Congress to restrict certain transactions with Chinese biotech companies, and could be passed as early as this year. The Biosecurity Act names certain Chinese companies, including Wuxi Aptec, Wuxi Biologics, and genetic analysis company BGI, which are global contract development and manufacturing organizations (CDMOs) for biotech products. Pharmaceutical and biotech companies in Korea, the US, and around the world are closely monitoring the situation, considering the potential impact of the bill on their respective businesses and business sectors.
Philip Chen (hereinafter referred to as Chen): Pharma is committed to prioritizing global competitiveness, national security, and public health. Pharmaceutical and biotech companies are working constructively with U.S. policymakers to protect national and economic interests and do their best to ensure that patients are not affected by potential drug shortages or disruptions in drug research and development (R&D).
Q. As the name of the Biosecurity Act suggests, it seems that the United States is no longer viewing bio as an industry but rather from a security perspective.
CHEN: The U.S. government has discussed with many countries, including Korea, the importance of ensuring resilient supply chains in a variety of sectors, including pharmaceuticals. For example, the U.S. government is working with partners in key minerals and metals needed for electric vehicles and large-scale energy storage batteries, semiconductors, microelectronics, and renewable energy generation and transmission. The U.S. government believes that supply chain collaboration with partners can enhance stability and increase the ability to respond to international disasters and emergencies.
In particular, the United States and Korea have also established the ‘Bio Track 1.5 Channel’ with participation from governments and industries of both countries to strengthen the pharmaceutical supply chain and accelerate each other’s R&D plans.
(At Bio USA held in June this year, the ‘BioPharma Alliance’ was launched by the South Korean National Security Office, the U.S. National Security Council (NSC), Japan, India, and the European Union (EU) to continue discussions on the pharmaceutical supply chain.)
Q. If trade with Chinese companies is restricted, how much of an impact will this have on the global supply of pharmaceuticals outside of China?
Kane: Pharma and global pharmaceutical companies are working to protect the safety and continuity of the pharmaceutical supply chain to ensure patient access to treatment. Pharmaceutical and biotech companies have built a robust global supply chain to ensure that patients around the world can receive safe and effective treatments. This is because a broad global supply chain plays a critical role in continuously and flexibly supplying medicines to patients around the world.
If there were restrictions on medicines entering China, patients in China could be seriously affected. On the other hand, the impact of restrictions on medicines leaving China is much more difficult to predict. The market dynamics between innovative branded drugs (original drugs) and generic drugs are bound to be different.
While original drug manufacturers are more likely to have robust, sustainable supply plans in place to protect against potential supply disruptions, cost-conscious generic drug manufacturers are less likely to have more than one production site in an effort to ensure a stable supply chain.
The most fundamental strategy for maintaining a stable supply chain that can respond quickly in a crisis is geographic diversity. Geographic diversity in the supply chain can provide flexibility when companies need it most, especially in the event of a pandemic or other emergency.
Q. Recently, there has been a heated competition worldwide to develop anti-obesity drugs. As a result, there are concerns that the development momentum for serious diseases such as cancer and rare diseases may be decreasing.
Kane: I think the most important value is that the pharmaceutical and bio industry continues to discover areas where patients have unmet needs and to continue research and development. According to a study commissioned by Pharma, there are currently more than 8,000 drugs under development.
It is true that many anti-obesity and metabolic treatments have been developed recently, but overall, treatments for serious diseases are also being developed in a balanced manner. Many new drugs are being developed in areas such as cancer, nervous system, and cardiovascular system.
Q. It is important that ‘first-in-class’ new drugs are eventually prescribed to patients. However, there is an opinion in the industry that many pharmaceutical companies are reluctant to launch in Korea. What is the actual atmosphere like?
Kane: Korea is a difficult market to launch new drugs quickly. Only 25% of new drugs launched worldwide in the past 10 years are covered by Korea’s national health insurance. This is half the level of Japan and Germany. In 2018, 19% of global new drugs were covered by health insurance, but in 2023, five years later, this figure fell to 10%.
Even this takes an average of 22.5 months, or almost 2 years, from the time the new drug is approved by the Ministry of Food and Drug Safety to the time it is covered by health insurance. In Japan, this period is 2.5 months, and in Germany, it is about 6 months.
For this reason, many global pharmaceutical companies are hesitant to launch their drugs in Korea at an early stage. This means that Korean patients have less access to new drugs. In Korea, patients have to wait an average of nearly 4 years (45.2 months) for the first global new drug to be covered by insurance and receive treatment.
This situation is bound to affect the development of new innovative medicines in Korea. Companies developing innovative medicines in Korea have difficulty attracting R&D investment and raising capital because the pace of insurance coverage for new medicines is slow and uncertain. Despite Korea’s strong scientific foundation, R&D investment is more in comparison countries such as Germany and France, which have rapid and wide access to new medicines.
Q. Recently, the US has also lowered the prices of some drugs covered by Medicare in accordance with the Inflation Reduction Act (IRA). In the US, which is the largest market for the pharmaceutical industry, the lowering of drug prices seems to have a greater impact.
Medicare is a public health insurance program provided by the U.S. government to people aged 65 or older or who meet certain eligibility requirements.
Kane: Right. This is something that many pharmaceutical companies are concerned about. The US government is planning to set public health insurance (Medicare) prices for certain drugs starting in 2026. The drugs that will be subject to this are original drugs that do not have generics (generics of chemical drugs) or biosimilars (generics of biopharmaceutical drugs), and that have been first approved by the US Food and Drug Administration (FDA) for at least 9 to 13 years (9 years for small molecule drugs, 13 years for biological agents).
Medicare accounts for about 30% of the U.S. pharmaceutical market. The number of drugs subject to Medicare pricing is expected to increase each year. Therefore, pharmaceutical companies are concerned that the U.S. government’s pricing policy may significantly undervalue the value of drugs. This atmosphere will hinder R&D and innovation. Since the U.S. accounts for more than 50% of the entire global market, there are concerns that R&D and clinical trials will decrease worldwide.
Reporter Choi Ji-won [email protected]
2024-07-16 13:58:43