The U.S.-South Korea trade agreement makes sure that American manufacturers of medicines and medical devices are able to compete in South Korea, based on fair, predictable, and understandable rules and regulations. At the same time, the agreement will help to promote high-quality health care and improve access to safe and effective medicines and medical devices, both patented and generic, in both countries.
KEY ELEMENTS
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South Korea will completely eliminate its current tariffs – the duties charged when these products enter the country – which range as high as 8 percent on American medicines and 50 percent on medical devices. Tariffs on pharmaceuticals will be eliminated within three years of implementation of the agreement and tariffs on medical equipment will be eliminated within 10 years of implementation of the agreement.
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South Korea has a National Health Insurance system. The agreement makes sure that American drug and medical device companies will be properly reimbursed for their products under South Korea’s system – with a set of rules that is clear and fair. Importantly, the basis for reimbursements will recognize the value of safe, innovative, and effective medicines and medical devices – the kinds of products that American companies provide.
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Under the agreement, South Korea’s process for choosing, pricing, and paying for medicines and medical devices under its National Health Insurance system will have to be open and understandable. For instance, when South Korea’s government proposes new regulations related to pricing and reimbursement, those proposals will have to be published in advance, much like American government agencies publish proposed regulations for comment in the U.S. Federal Register. South Korea has agreed to respond to public comments in writing, and explain any substantial changes they make when the regulation becomes final. To make sure that pricing and reimbursement decisions are fair, South Korea will establish an independent review process as well.
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The agreement encourages South Korea to accept test results performed in the United States for pharmaceuticals and medical devices.
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Under the agreement, the United States and South Korea will also work to ensure that health care professionals are not given improper inducements to promote the sales of medicines or medical device products, and will establish a working group to discuss health care policy issues.
