AstraZeneca has announced its decision to withdraw its diabetes treatment, ‘Farxiga,' from the Korean market due to challenges with drug pricing reduction. However, the saga continues as negotiations intensify. Amidst a surge in claim amounts compared to the previous year, Farxiga faces scrutiny under 'Volume-Value Agreement (PVA)' negotiations, with a looming deadline set for June 30th, sparking speculation about potential price reductions.

Industry sources reveal that during the April 4th meeting of the Health Insurance Review and Assessment Service's Pharmaceutical Benefit Evaluation Committee, Farxiga, an SGLT-2 inhibitor for diabetes, was deemed eligible for reimbursement. However, failure in PVA negotiations could lead to further regulatory actions, such as exclusion from coverage or mandated renegotiation for a year, based on committee recommendations. Pharmaceutical companies may be required to reimburse the National Health Insurance Corporation for expenses incurred during negotiation delays.

In the event of successful renegotiation, adjustments to the upper limit amount will be reported to the Ministry of Health and Welfare (MOHW) and deliberated upon by the Health Insurance Policy Deliberation Committee. Failure to reach an agreement may result in exclusion from national health insurance coverage.

Post the determination of reimbursement necessity in the pharmaceutical benefit evaluation committee meeting, Farxiga will undergo renegotiation under the PVA framework. The renegotiation deadline, set by MOHW, spans 30 days from the issuance of the command, with a projected announcement date for application on June 1st after deliberations in May's Health Insurance Policy Deliberation Committee.

AstraZeneca aims to maintain Farxiga's list price despite the decision to withdraw the blockbuster drug, with sales of $37 million, from the Korean market due to concerns about the impact of pricing reductions on its global operations.

Currently, the upper limit price for Farxiga stands at $0.54. Despite patent expirations and the introduction of generic drugs, pricing adjustments have been delayed due to legal challenges and subsequent suspensions. The company seeks agreement to retain the list price while Farxiga remains on the South Korean reimbursement list, with the outcome of negotiations anxiously anticipated.