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Multinational Pharma Companies Often Stop Drug Supply to Raise Prices
Mitomycin Supply to Be Suspended in March
Multinational Pharma Companies Often Stop Drug Supply to Raise Prices
  • By Choi Moon-hee
  • January 24, 2019, 14:03
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The Korean operation of Japanese multinational pharmaceutical company Kyowa Hakko Kirin recently notified the Ministry of Food and Drug Safety (MFDS) that it will stop importing mitomycin into Korea in March.

Multinational pharmaceutical companies tend to stop domestic supply of essential drugs in a bid to raise their prices.

Industry watchers said on Jan. 23 that Japanese multinational pharmaceutical company Kyowa Hakko Kirin Korea recently notified the Ministry of Food and Drug Safety (MFDS) that it will stop importing mitomycin into Korea. Mitomycin is a special drug designated as one of the national essential drugs. Suppliers of these drugs are required to notify the MFDS 60 days before they stop supplying their products. Accordingly, domestic supply of mitomycin is expected to cease in mid-March.

Mitomycin is used as an adjunct to glaucoma and laser assisted sub-epithelial keratomileusis (LASEK) surgery. Originally developed as an anticancer drug, it soon became an essential drug used in ophthalmology because it effectively treats the wounds from glaucoma surgery and inhibits the cornea from becoming cloudy after LASEK surgery. At the moment, there is no substitute for mitomycin.

Kyowa Hakko Kirin explained to the MFDS that it decided to discontinue the domestic supply of mitomycin because its manufacturing plant changed to the German plant from the Japanese plant, which led to an interruption in the supply of the product. However, industry insiders suspect that the company strategically suspended supply to raise the drug price in the future.

This is not the first time that a multinational pharmaceutical company has suspended the supply of a drug in order to raise its price. Last year, Guerbet Korea based in France stirred up a controversy by abruptly stopping the supply of Lipiodol, which is a contrast agent for treatment of liver cancer. Lipiodol is the only medication used in the carotid embolization procedure, which about 70 percent of patients with liver cancer receive.

Guerbet cut the supply of Lipiodol, which was sold at 52,560 won (US$46.99) per unit, demanding an increase of the drug price by five times to 262,800 won (US$230.50). At the time, accusations and protests of liver cancer patients broke out, but the company turned a deaf ear to them, saying that it was simply following the policy made by the headquarters in France. The supply of Lipiodol resumed after a two month-long negotiation between health authorities and the company, but the price of the drug was raised to 190,000 won (US$168.44), a 3.6-fold increase from the previous level.

In 2001, Swiss pharmaceutical company Novartis stopped the supply of chronic myelogenous leukemia treatment Glivec, demanding a raise of the drug price and resumed supply due to public rebuke. In 2004, a multinational pharmaceutical company Roche received domestic approval for Fuzeon, an AIDS treatment for patients who are resistant to conventional drugs but stopped short of launching it in Korea as negotiations on its drug price broke down.

The medical industry calls for the establishment of a government-run public pharmaceutical company in order to prevent supply interruption by multinational pharmaceutical companies for drugs that do not have alternatives. The bill for the establishment of a public pharmaceutical company was introduced to the National Assembly in June 2017, but it is still pending due to opposition from domestic pharmaceutical companies. Some argue that the government should increase support for domestic pharmaceutical companies to develop alternative medicines.