A Comparison of Asian Countries’ Reimbursement Mechanisms for Pharma Products

Published on May 31, 2021 by Raghu Patale

Asia is home to 57% of the world’s population and accounts for around 40% of the world’s pharmaceutical market. It is one of the most challenging pharmaceutical markets due to its disorganised nature. It continues to grow due to increasing populations, market size, ageing populations, and illnesses.

The challenges related to the health technology assessment (HTA), which determines reimbursement pricing, differ from country to country in Asia and are in a nascent stage unlike in most of the developed European countries. For instance, high- and upper-middle-income countries use the HTA to guide reimbursement and coverage decisions. Asia comprises a number of lower-income countries that use the HTA for planning and budgeting purposes.

Most Asian countries do not use pharmacoeconomic evaluations or head-to-head comparison models for setting reimbursement prices for drugs; instead, they rely on external reference pricing and internal price benchmarking for tendering and negotiating prices. Some countries use bridged versions — for example, South Korea also uses QALY/ICER evaluations, and Japan uses cost-plus pricing and a price maintenance premium to determine the prices of innovative drugs. With the level of challenges, updates and complexities in Asian reimbursement models, it is important to understand the differences in the HTA models of these countries. In this paper, we attempt to provide a comparison of the HTA reimbursement mechanisms and decisions to increase clarity.

For granular details of reimbursement mechanisms in these countries, please refer to the respective links below:

Japan’s reimbursement mechanism for innovative pharmaceutical products China’s reimbursement mechanism for innovative pharmaceutical products South Korea’s reimbursement mechanism for innovative pharmaceutical products

Abbreviations:

QALY — Quality-adjusted life year

ICER — Incremental cost-effectiveness ratio

NHSA — National Healthcare Security Administration

NDRC — National Development and Reform Commission

MOHRSS — Ministry of Human Resources and Social Security

NHI — National Health Insurance

Chuikyo — Central Social Insurance Medical Council

MHLW — Ministry of Health, Labour and Welfare

HIRA — Health Insurance Review Agency

DBCAC — Drug Benefit Coverage Assessment Committee

DREC — Drug Reimbursement Evaluation Committee

PE — Pharmacoeconomic

WAP — Weighted average price

CE — Cost-effectiveness

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About the Author

Raghu Patale serves as Delivery Manager leading the Life Sciences Corporate Strategy Research and Consulting vertical. His responsibilities include thought leadership, setting up new client engagements, client management, and generating business insights. He has over 10 years of experience in conducting life science research as a competitive intelligence and strategy consultant. He has supported a wide spectrum of client engagements focusing on competitive intelligence, therapy area research, market opportunity assessments, M&A support and report writing in oncology and other therapy areas for US, EU5, and Asian geographies.

Prior to this, Raghu was a Group Manager, leading the Pharma Practice at Evalueserve. He holds a Master’s degree in Pharmaceutical Sciences from the National Institute of Pharmaceutical Education and Research (NIPER).

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