Pharmaceuticals

Items Issues Recommendations Positive List System (2006.12.29) 1.Difficulty and poor success in MIP listing for New Drug & IMD - 8 products (1 Innovative New Drug) were listed in 2007 2. Company should provide not only Clinical Effectiveness but also Economic Effectiveness 3. The time required for registration of new drugs will be increased from the current 150-180 days to average 240 days (Max. 420days) 4. Mandatory PE data submission is burden to company in cost, time and experts insufficient. Standard Operation procedure for HIRA and NHIC is needed in detail Price cut-off through Re-arrangement of already listed drugs 1. Evaluations to be made taking into consideration clinical usefulness, cost-effectiveness by active ingredient in therapeutic class for 5 years (2007~2011) 2. PE evaluation process and data was not transparent and clear. 3.Insufficient PE experts in HIRA 4. In the current system, HIRA determines an arbitrary price which then is renegotiated with NHIC. The process became unpredictable and companies have difficulty in making up-front investments without knowing the selling price (MRP) in advance. - Delayed or no access of Korean patients to Innovative Drugs Fundamental principles for PE as a framework for the response should be met. ① That the methodology used for assessment be consistent with accepted theoretical principles. ② That the outcome of the assessment be consistent with current generally accepted medical and clinical opinion. ③ That the process followed will be consistent with the rights afforded under common law i.e the right for all stakeholders to adequately challenge which requires full and complete disclosure of the basis of any recommendations, etc. ④ That the outcome of the review not compromise with the health of patients as a trade off for budgetary savings unless such trade-offs are made explicit and subject to public debate. ⑤ That the process of review not create market distortions in the market for pharmaceutical goods nor create perverse incentives that may cause long term harm.   Too many system for price cut All system has multiple application for one product. ① Approximately 20% additional price reduction will take place for the off-patented originals. ② The Actual Transaction Price (ATP) System - Price cut attributable to market activity of wholesalers which are beyond company control. ③ Triennial re-pricing of new products - Price cut driven by price changes in A7 countries but mainly influenced by exchange rates when the Korean Won is appreciating. In case of a depreciating Won, the prices are not being readjusted upwards. This is an unfair one-way system. ④ PVA-Price Volume Agreement ⑤ Re-arrangement already listed drugs   IPR Issue Lack of patent linkage and data exclusivity are not in line with the international standards and due to this the companies with a new product in Korea have much smaller competitive advantage than in other countries Create an environment to encourage innovation where the global standards will be met by ensuring the patent-linkage and data-exclusivity also in line with global standards Unethical Business Practices Unethical business practices are unfortunately a part of the Korean pharmaceutical industry and prevent fair competition and need for companies to provide best products and best services. In order to erase the unethical business practice in the pharmaceutical industry, set higher sanctions for violators and set an Code of conduct and Code of Ethics that will be implemented and fully endorsed by KFTC.

Medical Devices

Items Issues Recommendations The Duty Fee Most items are classified in HSCODE 9018.**.****, 9022.**.**** and the duty rate is 8% with no concession applied.   Declaration process It is getting harder for medical devices to import them as duty-free as requirements for verifying its origin of production is getting more complicated. To import such equipment to Korea one needs to provide more information than internationally compatible therefore it takes more time and more effort to declare it. The information requested to be submitted when importing and declaring duty free drugs should be the same as the information required by other countries.   Local Tests and Certification Although equipments have IEC (International Electrical Committee), CE, EN certifications, these tests are not accepted and the equipments have to be tested locally with additional test items to get a permission certificate. It should be considered to accept international standards and international certifications to be able to sell the imported goods in Korea.

Animal Healthcare

Items Issues Recommendations Vaccine batch release testing Each individual batch of imported vaccine needs to undergo mandatory batch release testing by the authorities (MAFF/NVRQS) although the same batches have already been tested and released by the manufacturer. This procedure is costly and time consuming and represents a disadvantage over domestic vaccine manufacturers in whose cases one (local) test is sufficient for batch release. In recognition of this the authorities since 2008 have implemented the possibility of exempting certain manufacturers and products from the mandatory batch release testing in Korea. Condition for the exemption is an inspection of the overseas manufacturing facilities and a clean batch record for the last ten consecutive imported batches or for the last three years. While the possibility of exemption is a welcome improvement over the previous situation newly registered products or products from manufacturing facilities that have not yet been subject to an inspection by the Korean authorities will still undergo the mandatory batch release testing. Completely abandon batch release testing for imported vaccine coming from GMP certified manufacturing facilities. Domestic clinical trials In many instances test methods and standards required by Korean regulations differ, sometimes only in small details, from internationally recognized ones, thus making it often impossible to use data already available. Tests have to be conducted again in Korea resulting in higher cost and time delays - and yet occasionally leading to different results. We stopped importing one specific vaccine from Europe after the batch testing in Europe had resulted in a product release, however, when applying a different test method during the Korean mandatory batch release testing the product did not meet specification and had to be reshipped to Europe. Other examples relate to stability testing where tests have to be conducted again in Korea as tests done in Europe are not in line with the Korean requirements. Accept internationally recognized test methods and standards. Originals vs. Generics Multinational companies often invest heavily in development and registration of new and original products, with regulatory hurdles becoming increasingly strict. Generic manufacturers, however, can easily and practically without noteworthy investment obtain product registration by simply proving the bio-equivalency of their product related to the original drug. The launch of numerous generics leads to a drastic price erosion and seriously damages the business of the original drug manufacturer. Similarly, in product reassessments only the original drug manufacturer is asked to provide certain data which will then also be applied to the reassessment of generic drugs. Under the given circumstances it becomes increasingly difficult to recover product development investment and potentially the launch of new and innovative products. Set stricter requirements for registration of generics and demand individual registration package for generic drugs, incl. principal parts such as clinical and toxicity data.