President of Pfizer Korea
By Jane Han
Pharmaceutical giant Pfizer is accused of getting ``a tad too cozy'' with Korean regulators, inviting criticism from domestic drug makers and civic groups. The accusation comes at a time when the big drug maker faces challenges in Korea and abroad.
The latest case surfaced earlier this month, when the Health Insurance Review and Assessment Service (HIRA) released the results of its economic feasibility assessment on cholesterol-lowering drugs, as part of the government's efforts to lower drug costs.
HIRA and domestic drug makers are fundamentally standing at odds over the regulator's moderate price reduction applied to Lipitor, the world's best-selling medicine made by Pfizer.
Shin Young-keun, chief policy officer of the Korean Federation of Medical Groups for Health Rights, a civic alliance, says HIRA changed its pricing standards to benefit the multinational drug firm and such favoritism has the same effect as handing over 25.5 to 30.7 billion won in cash.
Shin, civic groups and local drug companies claim that HIRA was originally going to adjust the price of Lipitor based on the average market price of simvastatin, a drug used to control cholesterol, which has the lowest price. But it suddenly based its pricing on the drug's cost-effectiveness, which consequently upped Lipitor's price.
``It's not fair for HIRA to apply different standards to local and foreign firms,'' said Shin, adding that the civic alliance, together with Korean drug companies, will make a follow-up announcement of its position next month.
To the attack, biotech giant Pfizer says it was not officially informed from HIRA on any decision yet, but stressed that the claims made by civic groups aren't reasonable.
``Lipitor's price was already slashed by 20 percent in September when generics were released, so that means our drug was already reduced once,'' said Pfizer spokeswoman Lee Eun-Jeong. Government policy stipulates that original drug prices get reduced by 20 percent when generics are released.
She stressed that Lipitor is still awaiting the Supreme Court's decision on whether five local pharmaceutical firms breached its patent for the popular drug. The compound patent for Lipitor expired in May last year, but Pfizer claims that partial patents remain until 2013.
Since generics hit the market this summer, the domestic market share of Pfizer's blockbuster drug sank by 20 percent, according to analysts.
Critics may be reacting strongly to HIRA's latest call because regulators here, including the Korea Food and Drug Administration (KFDA), have been questioned on whether they were being fair to all the industries they watch.
Last month, KFDA banned Daewoong Pharmaceutical from selling its obesity drug NVU for six months because the maker's diet campaign publicly advertised specialized medical products, which goes against local rules.
A few weeks later, Pfizer was caught up in the same advertising controversy, when it carried out campaigns for Viagra that involved public participation.
However, the KFDA wasn't as quick to act as it did with Daewoong, saying that it must ``investigate further.''
This immediately drew criticism from local firms, who claimed that the multinational giant's heavy lobbying of lawmakers and regulators is obvious through these results.
``Local drug makers lobby too, but the size and scale are incomparable with these global firms,'' said one executive at a domestic drug firm, who asked not to be named.