April 20, 2024

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[THE INVESTOR] Multinational pharmaceutical companies are likely to be the biggest beneficiaries of President Moon Jae-in’s controversial health care reforms, dubbed Mooncare, experts said.

The overhaul, one of Moon’s key pledges, aims to enhance government health insurance coverage for treatments and medications to help people access affordable options for health care.

“Korea will become a gold mine for multinational drug makers, given that the country is already supporting high-priced medicines,” Huh Dae-seok, a professor at Seoul National University Hospital, said.

Partly started in April, the 30.6 trillion won (US$28.35 billion) plan will be executed in stages until 2022, and will see the compulsory National Health Insurance cover 70 percent of the costs of medical treatments -- except for cosmetic surgery.

“The new policy will favor multinational companies, especially their anti-cancer therapies and rare disease treatments. Korean firms are unlikely benefit from the expanded insurance coverage as it also means that the government will strengthen its governance on the health care industry,” a source said on the condition of anonymity. 

Among the 10 top-selling outpatient prescription drugs last year, only three were from domestic companies while the rest include Pfizer, Gilead Sciences, Boehringer Ingelheim and Bristol-Myers Squibb, according to health care data provider UBIST.

The dependency on imported drugs has been increasing over the last five years as high priced medications developed by foreign pharma firms have made major inroads into the market while local players’ drugs have seldom become blockbusters.

“The problem is that expensive new medicines do not guarantee high therapeutic efficacy. They reduce side effects or delay the progression of a disease in some patients,” Huh said.

In response to such criticism, the state-run National Health Insurance Service plans to carry out a study in May to find ways of follow-up management for medications included in the health care basket, especially high-priced drugs like immuno oncology drugs.

“The recent introduction of pricy new drugs has led to a lack of reevaluation of treatment effects, cost-effectiveness and financial impacts after listing. We expect the study to be completed by end-2018,” an official said.

By Park Han-na (hnpark@heraldcorp.com)