Why South Korea is Late with Drugs Even Southeast Asia Uses

Currently, a considerable number of drugs are not available in South Korea, and the situation is similar for drugs developed domestically. For example, Daridorexant (Dayvigo), an innovative new treatment for insomnia that has garnered global attention, is recognized as a new drug that controls the causes of sleeplessness as the brain's mechanisms have been elucidated. However, its delayed launch in South Korea is a representative case.

These delays are closely related to South Korea's medical drug pricing policy. Due to the national health insurance system, the government controls drug prices, and all drugs must meet the conditions for health insurance listing. Dayvigo is known to be quite expensive overseas; in the US, costs are reduced with health insurance, but it costs about 100,000 won per month when prescribed through general Medicare.

Dayvigo costs about 100,000 won per month in the US and is taken once a day before sleep. When attempting to enter the South Korean market, a consulting firm inquired about the situation of the Korean pharmaceutical market. Korean health authorities consistently argued that the drug price was too high and could not be approved at the existing US price. South Korea's drug pricing standard is structured to recognize high prices only if overwhelming efficacy compared to existing sleeping pills is proven.

Current drug prices are around 4,000 won or 10,000 won, showing a significant difference from zolpidem. The consulting firm questioned whether this drug pricing policy was reasonable and inquired about the situation in South Korea. In response, Professor Shin Won-chul explained Korea's circumstances and even held a meeting in Singapore. For these reasons, many drugs do not enter the South Korean market, and some tend to bypass Korea altogether.

Wakix, a narcolepsy treatment introduced in Korea, was sold for 2-3 years, but the foreign pharmaceutical company had to incur losses due to the low, reimbursed drug price. Ultimately, the pharmaceutical company failed to secure profitability and withdrew from the Korean market. This demonstrates the problem with the current system, which simply compares prices to set drug prices, even if the drug's components or mechanism of action are different. Professor Shin Won-chul emphasized that drugs like Dayvigo could improve the quality of life for domestic insomnia patients and prevent various problems such as dementia.

Many neurological drugs are being developed overseas, but South Korea's low drug pricing policy makes it difficult for these new drugs to enter. If pharmaceutical companies accept low drug prices in South Korea, the Korean price acts as an international standard (landmark or reference), leading to pressure for price reductions in drug negotiations in other countries. For this reason, pharmaceutical companies find it difficult to apply low prices only to the Korean market and eventually delay or abandon entry into the Korean market.

This issue applies not only to new overseas drugs but also to excellent domestically developed drugs. Cenobamate, an epilepsy treatment developed by SK, achieved great success and was recognized as 'number one' in the US market but could not be launched in South Korea due to drug pricing issues. Setting a low price only for South Korea could negatively affect price negotiations in the US market. Consequently, even domestic companies are forced to target overseas markets first before attempting drug price negotiations. Thanks to academic efforts, Cenobamate is finally set for domestic release in October this year.

Currently, South Korea's low-price drug policy means that drug prices for innovative new drugs are not recognized unless there is overwhelming performance improvement compared to existing drugs. However, new drugs develop by gradually improving existing drugs and ensuring safety. There is criticism that gradual developments, like autonomous driving technology in cars, are not acknowledged. While there are national difficulties such as financial problems, this approach could hinder the advancement of Korean medical care.

Dayvigo has already been launched with insurance coverage in the Philippines and Thailand in Southeast Asia 5-6 years ago. However, in South Korea, it is scheduled to be released as a non-reimbursable drug without insurance coverage. The cost is 1,631 won per pill, which calculates to over 40,000-50,000 won for a month's supply. With additional pharmacy dispensing fees, the financial burden increases further. Non-reimbursable drugs can be priced by pharmacies above the set rate, imposing a significant financial burden on patients. This is a major obstacle, especially for elderly patients who require long-term medication.

Preventing the domestic entry of new drugs due to financial constraints is criticized as an act of depriving patients of their right to choose. There is an argument that even if it's non-reimbursable, drug introduction should be allowed so patients have options. When overseas pharmaceutical companies are unable to achieve domestic launch without accepting low prices in negotiations with Korean health authorities, they end up abandoning entry into the Korean market. In Japan, Dayvigo, an insomnia treatment, is recognized as a first-line drug and covered by insurance, allowing patients to access the medication at a low cost. This also has significant implications from the perspective of fostering domestic industries.

Epilepsy drugs and narcolepsy treatments developed by SK are enjoying great success in overseas markets such as the US, but they are not being launched in South Korea. While a small patient population is one reason, the fundamental issue is the inability to meet South Korea's drug pricing standards. As a result, even domestic pharmaceutical companies are bypassing the Korean market. Despite continuous development of excellent new drugs overseas, South Korea faces the serious problem of delayed access to these medications.

As domestic and international pharmaceutical companies turn away from the Korean market, patients miss out on the latest treatment opportunities, which can ultimately have a serious impact on public health.

Dayvigo has already been launched with insurance coverage in the Philippines and Thailand in Southeast Asia 5-6 years ago. However, in South Korea, it is scheduled to be released as a non-reimbursable drug without insurance coverage. The cost is 1,631 won per pill, which calculates to over 40,000-50,000 won for a month's supply. With additional pharmacy dispensing fees, the financial burden increases further. Non-reimbursable drugs can be priced by pharmacies above the set rate, imposing a significant financial burden on patients. This is a major obstacle, especially for elderly patients who require long-term medication.

Preventing the domestic entry of new drugs due to financial constraints is criticized as an act of depriving patients of their right to choose. There is an argument that even if it's non-reimbursable, drug introduction should be allowed so patients have options. When overseas pharmaceutical companies are unable to achieve domestic launch without accepting low prices in negotiations with Korean health authorities, they end up abandoning entry into the Korean market. In Japan, Dayvigo, an insomnia treatment, is recognized as a first-line drug and covered by insurance, allowing patients to access the medication at a low cost. This also has significant implications from the perspective of fostering domestic industries.

Epilepsy drugs and narcolepsy treatments developed by SK are enjoying great success in overseas markets such as the US, but they are not being launched in South Korea. While a small patient population is one reason, the fundamental issue is the inability to meet South Korea's drug pricing standards. As a result, even domestic pharmaceutical companies are bypassing the Korean market. Despite continuous development of excellent new drugs overseas, South Korea faces the serious problem of delayed access to these medications.

A first-line drug is on par with non-pharmacological treatments like cognitive behavioral therapy for insomnia. Compared to first-line treatments worldwide, Japan implements a policy to enhance accessibility for its citizens through rapid introduction and insurance coverage. In this way, Japan actively supports new drugs from its domestic companies, promoting both public health and industrial development.

Epilepsy drugs and narcolepsy treatments developed by SK are very successful in the US market, but they are not introduced in Korea. While a small patient population is a factor, the main reason is the inability to meet Korea's drug prices. Even domestic pharmaceutical companies are bypassing the Korean market, resulting in Korea facing a serious situation where even good new drugs developed overseas are only accessed late.

The continuous delay in the introduction of innovative new drugs in South Korea is pointed out as a very serious problem.