Positive Listing of Pharmaceuticals

• Abstract
• Purpose of health policy or idea
• Characteristics of this policy
• Political and economic background
• Purpose and process analysis
• Expected outcome
• References

Abstract

Health insurance reimbursement of pharmaceuticals used to be based on negative listing. To contain pharmaceutical expenditure, government decided to introduce positive listing based on economic evaluation, and only drugs of which cost-effectiveness are proven will be reimbursed by health insurance. Infrastructure in economic evaluation as well as the strong opposition by global phamaceutical manufacturers can be barriers to the effective implementation of the new policy.

Purpose of health policy or idea

Rapid increase in pharmaceutical expenditure has been a concern for the Ministry of Health and Welfare and National Health Insurance Corporation. In the past, health insurance reimbursement of pharmaceuticals was based on negative listing. To contain pharmaceutical expenditure, government decided to introduce the policy of positive listing of reimbursable drugs, and only drugs, of which cost-effectiveness are proven, will be reimbursed by health insurance. Positive listing is a regulation of the entry of drugs, but its implementation is based on financial incentives such as cost effectiveness. Positive listing will affect the pharmaceutical industry substantially.

Main points

Main objectives

Contain pharmaceutical expenditure

Type of incentives

Financial and nonfinaicial incentive

Groups affected

Pharmaceutical manufacturers, Patients

Innovationsgrad	traditionell		innovativ
Kontroversität	unumstritten		kontrovers
Strukturelle Wirkung	marginal		fundamental
Medienpräsenz	sehr gering		sehr hoch
Übertragbarkeit	sehr systemabhängig		systemneutral

Political and economic background

Purpose and process analysis

Current Process Stages

	Idee	Pilotprojekt	Strategiepapier	Gesetzgebung	Umsetzung	Evaluation	Veränderung/Richtungswechsel
Implemented in this survey?

Origins of health policy idea

Academicians, mainly health economists, have played a key role in the new policy. They maintain that the negative listing of drugs in the past resulted in too many drugs for reimbursement, leading to the failure of the pharmaceutical cost containment. Ministry of Health and Welfare and Health Insurance Review Agency accept the criticism on the previous system of drug listing, and agreed that economic evaluation can be an objective way of select drugs for positive listing for health insurance reimbursement. Listing system of pharmaceuticals for reimbursement in other countries, such ash Australian system of economic evaluation for positive listing, has been studied. Economic evaluation (cost-effectiveness analysis and cost-utility analysis) will be used in the decision to include drugs for reimbursement from health insurance. For a decision on reimbursement listing, pharmaceutical manufacturers should submit data on economic evaluation to the national health insurance.

 

Initiators of idea/main actors

• Regierung

• Kostenträger

• Wissenschaft

• Privatwirtschaft, privater Sektor

Approach of idea

The approach of the idea is described as:
new:

Actors and positions

Regierung
Ministry of Health and Welfare	sehr unterstützend		stark dagegen
Kostenträger
Health Insurance Review Agency	sehr unterstützend		stark dagegen
Wissenschaft
Health Economics and Policy	sehr unterstützend		stark dagegen
Privatwirtschaft, privater Sektor
Korean Pharmaceutical Association	sehr unterstützend		stark dagegen
Multinational Pharmaceutical Manufacturers	sehr unterstützend		stark dagegen

Actors and influence

Regierung
Ministry of Health and Welfare	sehr groß		kein
Kostenträger
Health Insurance Review Agency	sehr groß		kein
Wissenschaft
Health Economics and Policy	sehr groß		kein
Privatwirtschaft, privater Sektor
Korean Pharmaceutical Association	sehr groß		kein
Multinational Pharmaceutical Manufacturers	sehr groß		kein

Positions and Influences at a glance

Adoption and implementation

Pharmaceutical industry has been strongly opposed to the policy of positive listing. Some domestic pharmaceutical manufacturers are worried that those drugs not in the reimbursement list will have to exit the market, and the new policy will be used to cut the price of drugs with the threat of de-listing. Multinational pharmaceutical manufacturers maintain that positive listing based on economic evaluation will have a serious negative effect on the development and introduction of new innovative drugs because the policy will favor less effective but much cheaper drugs. They have even warned that they will pursue a law suit on unfair international trade.

Seriousness of the rapid increase in pharmaceutical expenditure, along with the power of the Ministry of Health and Welfare in health and pharmaceutical policy, and the influence of the single payer (national health insurance system), has contributed to the government decision to implement the new policy, in spite of the oppositions by phamaceutical manufacturers.

Expected outcome

Positive listing based on economic evaluation will lead to a smaller number of drugs for health insurance reimbursement, and only those drugs that are proved to be cost effective will be listed, hopefully contributing to the containment of pharmaceutical expenditure. However, positive listing itself may not directly affect the price and quantity of pharmaceuticals consumed. In that case, positive listing will have a limited effect on pharmaceutical cost containment.

Strong opposition of multinational pharmaceutical manufacturers will be a tough challenge to the implementation of the new policy of positive listing. Global manufacturers of innovative drugs have strong bargaining power and can still influence the policy in the process of implementation. Global pharmaceutical manufacturers maintain that positive lisitng can be an abuse of market power by the single purchaser. They request that there should be an independent committee to mediate and deal with conflicting cases.

Positive listing based on economic evaluation will be first applied to new drugs for listing. But it should be later applied to drugs that are already in the list (listed without economic evaluation under the former regime of negative listing system). It will take a while to evaluate all those existing drugs for re-assessment for the decision on listing.

Capacity of pharmaceutical manufacturers to conduct economic evaluation for their drugs are still limited, especially for domestic firms. Limited supply of expert groups of health economists who can work with the health insurance payer on the evaluation of the data submitted by pharmaceutical producers can also be a barrier to the rapid implementation of the new policy.

Ministry of Health and Welfare currently plans to use the economic evaluation tool for listing decisions only. However, pharmaceutical manufacturers are worried that it will be used as a tool to set reimbursement price.

Impact of this policy

Qualität	kaum Einfluss		starker Einfluss
Gerechtigkeit	System weniger gerecht		System gerechter
Kosteneffizienz	sehr gering		sehr hoch

References

Author/s and/or contributors to this survey

Soonman Kwon

Empfohlene Zitierweise für diesen Online-Artikel:

Soonman Kwon. "Positive Listing of Pharmaceuticals". Health Policy Monitor, April 2007. Available at http://www.hpm.org/survey/rok/a9/2