US FTA may cost drug industry $1.2 billion: gov’t
The Hankyoreh | 17 October 2006
U.S. FTA may cost drug industry $1.2 billion: gov’t
Plan to insure only generic drugs met with opposition from U.S.
A proposed free trade agreement with the United States is expected to cost as much as 1 trillion won (US$1.2 billion) in damage to the South Korean pharmaceutical industry if the U.S. proposal for the deal is accepted, the South Korean government said.
In a parliamentary audit session on October 16, Health and Welfare Minister Yoo Si-min said, “Under free trade talks, the damage to the South Korean pharmaceutical industry may total between 600 billion won to 1 trillion won if the U.S. proposal is accepted. If [the South Korean] proposal is accepted, the damage may total between 350 billion won to 630 billion won.”
Yoo’s remarks were made after Rep. Hyun Ae-ja of the minor opposition Democratic Labor Party claimed, “If South Korea accepts all U.S. requests, it will cost [the pharmaceutical industry] 941.8 billion won and people will suffer from price hikes," citing figures from a report by the National Health Insurance Corporation.
“The U.S. demands that South Korea extend the patent period of new drugs,” Hyun said. If this extension is made, he said, prices will soar, citing the same report by the National Health Insurance Corporation. The report said a three-year patent extension would cost 504.5 billion won and a four-year extension would cost 722.5 billion won, depending on the results of the free trade talks.
Yoo said that the burden on prescription-holders will not be as great if the South Korean government’s plan to offer insurance coverage for the lowest-cost, generic version of a drug is put into effect.
However, Hyun said, if the U.S. plan is accepted, “local pharmaceutical companies will be hurt, given their savings in selling generic drugs. The damage will be transferred to the people.”
