Generic atorvastatin and rosuvastatin in the South Korean market: time of introduction in relation to manufacturer characteristics

Impact of Incorporating Future Mandatory Price Reductions with Generic Drug Entry on the Cost-Effectiveness of New Drugs: A Policy Simulation Study of Dupilumab in Atopic Dermatitis Treatment

The introduction of high-cost medications often poses challenges in achieving cost-effectiveness for drug insurance coverage. Incorporating future price reductions for these medications may enhance their cost-effectiveness. We examined the influence of future cost reductions mandated by the national insurer's equal pricing for equivalent drugs (EPED) policy on the cost-effectiveness of dupilumab, a biologic drug for moderate to severe atopic dermatitis in the Korean healthcare system. We conducted a policy simulation study using semi-Markovian cost utility analysis of dupilumab in combination with supportive care (SC) versus SC alone, with and without the EPED policy adjustment. The EPED would lower dupilumab's price to 70% following the entry of a biosimilar drug in 10.3 years. Scenario analyses quantified the impact of changing time to the EPED, chemical versus biological designation, response criteria, discount rates, and time horizons on the Incremental Cost-Effectiveness Ratio (ICER) and acceptability with and without EPED adjustment. The EPED adjustment of dupilumab's future price significantly improved its cost-effectiveness, with a 9.7% decrease in ICER and a substantial 14.6% increase in acceptability. Assuming EPED in 5 years, the ICER fell below the predefined willingness-to-pay threshold. If dupilumab were a chemical drug, EPED adjustment demonstrated a 19.1% increase in acceptability. Incorporating future cost reductions via the EPED system in economic evaluations is crucial, especially for drugs facing imminent generic entry. This study underscores the importance of EPED adjustment in the cost-effectiveness analysis of innovative medications, especially for those nearing willingness-to-pay thresholds.

Does the first generic exclusivity system provide an economic incentive for early generic entrance under the patent linkage system?

Introduction

A period of exclusivity for the first generics, as part of the patent linkage system, was established in South Korea to provide an economic incentive for early generic entry. This study describes the dynamics of generic penetration and assesses the first mover market share advantages under the patent linkage system.

Methods

Pairs of originators and their corresponding generics granted the first generic exclusivity from 2015 to 2020 were identified. We categorized generics into first movers and latecomers, described the penetration curves of generics, and estimated the saturated market share of generics, first movers, and latecomers. Volume-based monthly prescriptions were used to describe the generics' penetration curves. A logistic growth model was adopted to estimate the saturated market shares of generics.

Results

We identified 28 pairs of originators and generics, presented penetration curves, and estimated generics market shares. The saturated market share of generics was 30%, and the time to saturation was approximately 33 months. The shapes of penetration varied by nationality, route, and number of generics. The existence of latecomers was associated with the decreased penetration speed over time and decreased market share of generics. However, the first mover market share advantages or latecomers' disadvantages were consistently observed.

Conclusion

The generic uptake in South Korea is delayed, limited, and context-dependent. However, first generics' market share advantage suggests that a period of exclusivity, as part of the patent linkage system, could provide an economic incentive for early generic entrance.

Deregulation on branded and generic drugs price and its effect: a study of Chinese pharmaceutical market

Purpose

This research studies the effect of deregulation of price cap in pharmaceutical market. Price regulation (either through price cap or reference price) is common practice in the pharmaceutical market but recently there are increasing voices calling for deregulation claiming that deregulation could help in lowering drug price and increase revenue of pharmaceutical firms. Upon those callings, Chinese government removed the price cap regulation in June 2015. The author uses this natural policy experiment to study this effect.

Design/methodology/approach

In this study, the author applied the interrupted time series analysis (ITSA) on the revenue data of nine categories of both generic and branded drugs in China from March 2011 to August 2016 (the time frame includes both before and after of the initialization of the deregulation) and analyzed the effect of deregulation.

Findings

The results showed that, whether the revenue of drugs will increase or decrease after the deregulation of price cap depends on the level of competition and the change of patterns of the branded and generic drugs are different. When HHI (Herfindahl–Hirschman index) is sufficiently low (competition is high), revenue does not change as a result of deregulation, when HHI is moderately low (moderate competition), revenue from generic drugs will decrease significantly and revenue from branded drugs will increase significantly, and when HHI is high (low competition), revenue from generic drugs will increase significantly and revenue from branded drugs will decrease significantly.

Originality/value

This is a unique study with a unique data set. Most previous studies focus on regulation of drug price and analyze how this may affect drug revenue; however, this is a natural policy experiment of de-regulation. Moreover, previously most studies focus on reference pricing regulation and this is price-cap, a different mechanism that is rarely studied. The originality/value is high of this article.

Patenting and patent challenges in South Korea after introducing a patent linkage system

BACKGROUND

South Korea introduced the patent linkage system in 2015 as part of the implementation of free trade agreements with the United States. This study assessed trends in brand-name drug patenting and generic patent challenges in South Korea after the introduction of the system.

METHODS

From 2012-19, we constructed a novel dataset that combines information about listed patents with their corresponding brand-name drugs and patent challenges against these brand-name drugs. We analyzed brand-name drug patenting and generic patent challenges and elucidated factors in timely patent challenges using event history analysis.

RESULTS

During the study period, 659 brand-name drugs listed their patents in the K-Orange Book and patent challenges against 95 brand-name drugs were initiated. The number of listed patents and their nominal patent term varied by the characteristics of the brand-name drugs. Patent challenges of generic drugs were marginal in South Korea even though the surge of patent challenges of generics were noticed right after the introduction of the patent linkage system.

CONCLUSIONS

Patenting and patent challenges are critical factors when introducing generic drugs into the market under the patent linkage system. However, the impact of the patent linkage system on patenting and patent challenges could be varied by the specific form of the patent linkage system and the contexts of pharmaceutical markets.

Importance of a usual source of care in choosing low-priced generic drugs: a cross-sectional study

BACKGROUND

The potential to lower pharmaceutical spending exists if physicians prescribe low-priced generics. This study aimed to empirically investigate the determinants of choosing low-priced generic drugs in South Korea.

METHODS

The 2018 HIRA-NPS dataset was used for this study. Among 1.45 million individuals, we identified the patients who were prescribed atorvastatin 10 mg for more than 60 days in 2018 as the study subjects, separated the subjects into high- and low-priced groups based on their average unit price, and applied a series of logistic regression models to elucidate the factors affecting low-priced drug choice.

RESULTS

Out of 60,984 subjects, only 10,228 (17%) were categorized into the low-priced group. The majority of the subjects (31%) were prescribed drugs at the maximum reimbursement price. Age of the subject, the frequency of visits to the institution, the existence of a usual source of care, and the institution type that a subject mainly visited for prescriptions were associated with being prescribed low-priced generics.

CONCLUSION

The association of being prescribed low-priced generics with the primary care institution and the usual source of care could be interpreted as evidence for the role of primary care in the continuity of patient-centred care. Creating health systems under which professionals act as perfect agents of a patient and/or an insurer is required.

Who initiates price competition when generic entrants are introduced into the South Korean pharmaceutical market?

Background

Price competition has the potential to reduce health expenditures without hindering pharmaceutical innovation. However, empirical evidence on price competition after generic drugs are introduced is scarce. This study investigates product- and substance-level determinants of price competition following the entry of generics into the South Korean market.

Methods

We selected substances that were approved by the Ministry of Food and Drug Safety from 2000 to 2019, linked their corresponding pharmaceutical products, measured the degree of price competition under various scenarios, and utilized multilevel analysis to investigate the determinants of price competition.

Results

A total of 986 substances and 12,109 corresponding pharmaceutical products were identified. Only 11% of products were affected by price competition in the 10% scenario. However, the number increased to 43% when we measured price competition at the substance level. Major domestic manufacturers mainly initiated price competition at the product level, while foreign manufacturers were reluctant to initiate price competition. At the substance level, the maximum reimbursement price was a significant determinant of price competition.

Conclusion

Price competition at the product level is rare in South Korea. In contrast, the market is quite price competitive at the substance level. Policy options could be introduced to encourage "discounted generic" substitution in an effort to maximize the effects of price competition at the substance level. Major domestic manufacturers are essential in the introduction of discounted generics into the South Korean health system.

Patent challenges and factors associated with successful patent challengers under the patent linkage system: recent evidence from South Korea after the Korea United States free trade agreement

Objectives

The patent linkage system upgraded patent challenges to an important factor in granting timely market approval for generic drugs. We aim to understand patent challenges and identify the factors that are associated with successful patent challengers under the patent linkage system in South Korea.

Methods

We constructed a novel dataset that combined information on manufacturers with detailed data about their patent challenges after introduction of the patent linkage system. Based on the number of successful patent challenges, manufacturers were categorized into non-challengers, passive challengers, and aggressive challengers. Then, two types of logistic models were applied to identify the factors associated with successful and aggressive challengers.

Findings

Only 39 active ingredients were challenged by 77 manufacturers from March 2015 to December 2019. Of 171 manufacturers, 94 (55 %) were non-challengers, 58 (34 %) were passive challengers who had succeeded in fewer than 4 patent challenges, and 19 (11 %) were aggressive challengers who had succeeded in 4 or more patent challenges. Higher sales, more employees, and a greater number of reimbursed drugs were associated with being a patent challenger, while a greater number of reimbursed drugs was associated with being an aggressive challenger.

Conclusion

Some manufacturers utilize patent challenges to strengthen their product portfolios in the market. However, under the patent linkage system, the frequency of patent challenges is limited in South Korea compared to the United States. In particular, patent challenges against drugs in injection form and biologics are very rare.

Understanding long-listed pharmaceutical products without competition in South Korea: policy implications in managing generic entrants and pharmaceutical expenditures

Background: The nature of competition within the pharmaceutical sector has received a great deal of attention from policymakers and researchers. This is the first study to comprehensively analyze long listed single-source products within the South Korean market.Methods: Long listed single-source products are defined as pharmaceutical drugs that are available in the market for at least 8 years, without competition. We analyzed the determinants that lead to long listed single-source products in the market, and then evaluated their impact on health systems by examining the subsequent price responses of manufacturers.Results: Based on the number of drugs and their market values, pharmaceuticals categorized as long listed single-source products constitute a substantial portion of the market. Characteristics of the market are closely associated with generic entrants. In particular, the market size of a substance is associated with generic entrants, while the price of a brand-name drug is related to being long listed single-source products.Conclusions: Our analysis supports the creation of a regulatory and/or reimbursement system in order to support robust and effective competition within the marketplace. The first step toward rationalizing the system is to provide widespread information on drugs with limited competition or no competition.

Is greater generic competition also linked to lower drug prices in South Korea?

BACKGROUND

Although the association between the price of generic drugs and market competitiveness has been explored in various high-income countries, this association has not been empirically evaluated in South Korea. We aim to determine the association between the prices of generic drugs and market competitiveness in South Korea.

METHODS

A list of originator drugs approved by the national authority from 2000 to 2019 and their corresponding generic drugs were grouped along with the baseline information. The market was categorized into four groups based on the number of manufacturers: duopoly (2 manufacturers); low- (3-25 manufacturers); medium- (26-75 manufacturers); and high-competition (more than 76 manufacturers) markets. Price variance, calculated as the difference between the maximum price and minimum price divided by the maximum price, was obtained. A multivariate regression model was applied to regress price variance on the characteristics of market competitiveness, controlling for the characteristics of the originator drugs and their price level in the market.

RESULTS

A total of 986 originator drugs were identified and then divided into duopoly (31%), low- (56%), medium- (9%), and high-competition (4%) markets; the median of the price variance for these markets was 0.013, 0.077, 0.200, and 0.228, respectively. In a multivariate regression model, price variance was associated with the characteristics of the originator drug, including the Anatomical Therapeutic Chemical classification, the route of administration, and the approval year. Controlling for the characteristics of the originator drugs, market competitiveness was positively associated with price variance.

CONCLUSIONS

The positive association between price variance and market competitiveness is still consistent in South Korea, where rare price competition among a large number of generic manufacturers has been reported. However, no significant price variance was observed between medium- and high-competition markets. These findings support policies for managing a large number of generic manufacturers in South Korea.

Marketing and Pricing Strategies of Blockbuster Drugs in the South Korean Market: A 15-Year Retrospective Cohort Study for Choline Alfoscerate

INTRODUCTION

Understanding marketing strategies and price competition among manufacturers is essential to manage health care expenditures, particularly those related to blockbuster drugs.

OBJECTIVES

To assess marketing and pricing strategies of blockbuster drugs in South Korea.

METHODS

Baseline information on manufacturers who were granted marketing approval for choline alfoscerate in various forms was retrieved. Accumulation of manufacturers in the market was also identified, and manufacturers were categorized into first movers and latecomers based on their marketing time. Then, an event history analysis and a regression analysis were applied to estimate the duration of marketing and their price competition.

RESULTS

Currently, 109, 83, and 26 manufacturers produce choline alfoscerate in capsule, tablet, or syrup form, respectively, indicating that many manufacturers have marketed generics and the majority of the generics are categorized as latecomers. The size of the manufacturer was a significant factor in marketing new medicines, while the variable was not related to the marketing of modified drugs. Furthermore, price competition in the market was rare and only a few major firms initiated price competition.

CONCLUSION

The Korean market appears to be an example of perfect competition when we focus on the number of manufacturers. However, the market is near-monopolistic when examining the price of generic drugs. While product competition between different forms of drugs is effective in lowering price, product competition within the same form of a drug does not exist in the market.