Korea Takes Its First Step Reimbursing IO Drugs

Amid repeated calls industry, South Korea decides to pay for Keytruda and Opdivo in its first reimbursement of immuno-oncology drugs, albeit at limited scope. The government is poised to expand reimbursement of IO drugs going forward amid its plan to significantly expand health insurance coverage.

South Korea has decided to reimburse Merck & Co. Inc.'s Keytruda (pembrolizumab) and Bristol-Myers Squibb Co.'s Opdivo (nivolumab), marking its first reimbursement of immuno-oncology drugs, to sharply lower the financial burden of patients and improve market access of these drugs.

However, reimbursement has been limited to certain patient populations to prevent misuse of the drugs. According to the Health Insurance Review & Assessment Service, Opdivo will be reimbursed for non-small cell lung cancer (NSCLC) patients with PD-L1 expression of more than 10%, while Keytruda will be reimbursed for NSCLC patients with PD-L1 expression of more than 50%.

And these patients will need to receive prescriptions and treatment at hospitals that meet certain conditions.

For the safety of patients, use of these drugs have also been limited to certain hospitals that can immediately handle patients in the event of possible serious side effects. The reimbursement was effective from Aug. 21.

"As immune checkpoint inhibitor is a new concept cancer therapy that is different from conventional cancer therapies, there is a high possibility of abusing the drug due to high therapeutic expectations and little experience in clinical use," said HIRA in a statement.

As a result of the new coverage, the financial burden for a NSCLC patient will drop to about KRW3.5m ($3,104) to KRW4.9m a year, based on the patients' share of the drug cost of 5%, from about KRW100m at present.

Keytruda and Opdivo are approved in South Korea for the treatment of melanoma and NSCLC.

With its new plan to raise the health insurance coverage ratio to 70% of all medical costs by 2022 and eventually to 80% in the longer-term, from about 60% level at present, the government is set to reimburse more pricey innovative drugs, including IO drugs, and expand indications of already reimbursed drugs going forward. (Also see "Korea's Reimbursement Steps Spark Drug Price Cut Concerns" - Pink Sheet, 14 Aug, 2017.)

In fact, immuno-oncology was one of the sectors that was the most active in clinical trials in South Korea last year. The Ministry of Food and Drug Safety approved 154 clinical trials of targeted cancer therapies and IO drugs in 2016. This accounted for 76% of the approvals for clinical trials of cancer therapies. (Also see "Cell Therapies, Biosimilars Boost Biologics Clinical Trials In Korea" - Pink Sheet, 4 Apr, 2017.)

HIRA has formed a consultative group of experts and consumer group representatives to discuss reimbursement of Keytruda and Opdivo. Details of new reimbursement were determined by the agency's cancer review committee.

The government has been cautious in reimbursing IO drugs despite repeated calls from the industry and patients due to the products’ high prices and uncertainties over possible side effects, though both sides agree that IO is a new paradigm in oncology. The industry has stressed the need for early reimbursement of IO drugs, albeit at limited levels, and expand the scope of reimbursement going forward. However, there have also been concerns over possible overuse of the drugs due to explosive demand. (Also see "Delays As Korea Grapples With Immuno-Oncology Drug Coverage" - Scrip, 29 Jun, 2016.)

"Immuno-oncology is a new paradigm in cancer treatment which can completely cure certain patients. There are some realistic limitations in reimbursement due to the cost-effectiveness of these drugs and their impact on the budget, but we need to approach this step by step by initially applying reimbursement for the patients who urgently need this," said Dae-Ho Lee of Asan Medical Center, at a conference in Seoul last year on IO drugs' entry into South Korea.

"We can't reimburse these drugs for every patient from the beginning. We need to first apply this to those who expect to clearly benefit from them. Once the reimbursement begins, we can gradually expand it."

According to Ashley Jaksa, vice president of data & analytics at Context Matters, IO drugs do not seem to be winning the market access that their potential suggests they deserve. This is largely down to the way different health technology assessment bodies interpret the data, the products’ high prices and the broad nature of labels. (Also see "Immuno-oncology Drugs And The Trouble With Market Access" - Pink Sheet, 1 Jun, 2017.)

From the editors of PharmAsia News.