Health ministry to raise prices of 14 essential drugs from November

South Korea's health ministry said Friday it will raise the prices paid for 14 essential medicines from Nov. 1, including a pediatric seizure drug whose only domestic plant had announced it would leave the market, in a bid to keep low-margin products on pharmacy shelves.

The designation covers Samjin Lorazepam Injection, used to sedate children suffering convulsions or prolonged epileptic seizures, which had rested on a single domestic production site. That plant warned from last year that it would withdraw from the market, raising the prospect of shortages in pediatric and emergency care.

The Ministry of Health and Welfare said it worked with the Ministry of Food and Drug Safety to find a new manufacturer and support the transfer of the product's rights, a new approval in May and health insurance coverage in July. From November the drug will be managed as a withdrawal-risk medicine, with its costs reimbursed.

The ministry estimated that reimbursing the drug's cost will take about 3.5 billion won ($2.62 million) a year, against some 23.5 billion won ($17.6 million) if domestic production ended and the entire supply were imported, a saving of 20 billion won ($15 million) annually.

Withdrawal-risk medicines are cheap products that hospitals and clinics need but that drugmakers avoid making or importing because they are not profitable enough. The government designates them and covers their production costs to keep supplies stable.

Under a support package announced in March, it raised the price threshold for the designation by 10 percent, gave priority to drugs on the national essential medicines list, began factoring the year's cost increases and facility investment into its cost calculations, and added a premium of up to 10 percent above its standard margin. Companies that make large volumes of such drugs get a price preference raised to 50 percent from 45 percent.

Two cancer drugs will also get higher prices. Holoxan and Endoxan, used against malignant lymphoma, multiple myeloma, leukemia and breast cancer, are imported in full, and rising raw material and shipping costs had made their supply unstable.

"Essential medicines at medical sites, including withdrawal-risk medicines, must be supplied as a top priority to protect people's lives and health," said Yoo Joo-heon, head of the ministry's health insurance policy bureau. "We will keep working to ensure a stable supply of essential medicines with unstable supply under the expanded and reorganized support policy."