Seoul to push for new drug policy amid U.S. protest |
South Korea reiterated its will on Tuesday to implement a new drug pricing policy aimed at offering quality medicine at a cheap price, a key issue that abruptly halted the country's free trade agreement (FTA) talks with the United States.
The Ministry of Health and Welfare said it will issue a pre-announcement on the legislation on Wednesday, 60 days before amending the country's drug insurance policy so new drugs will not automatically be placed on a list of products for which people can be reimbursed under insurance policies.
In the legislation, the products of overseas and domestic drug makers must be strictly tested and approved by the ministry within 360 days to ensure cost efficiency for reimbursement.
The new policy is intended to encourage pharmaceutical producers to come up with ways to offer effective drugs at cheaper prices.
Similar laws are already implemented by 24 out of 28 members of the Organization for Economic Cooperation and Development, including the U.S.
However, the plan has surfaced as a major sticking point in Seoul's negotiations to seal an FTA with the U.S. that began in May.
As a result of the dispute, the second round of talks, held in Seoul earlier this month, ended sooner than expected after Washington boycotted pharmaceutical discussions to protest the policy.
For months, U.S. pharmaceutical companies here have protested against the South Korean government's move in readjusting prices.
If the new policy goes into effect in September, many U.S. companies will face a steep drop in their local sales, experts said, as most of their medicines are not yet on the list.
South Korean officials believe the new law is unlikely to be problematic for the world's largest economy.
"We believe there aren't any clauses or contents that could be particularly disadvantageous for the U.S.," a ministry official who wished to remain unidentified said.
However, observers are also keeping a close eye on a possible shift since South Korean Health Minister Rhyu Si-min has reportedly told U.S. Ambassador to Seoul Alexander Vershbow recently that the government would take Washington's standpoint on the issue into consideration.
Besides pharmaceuticals, the other main areas of disagreement in the trade talks are the opening of the agriculture and textile markets and the country-of-origin issue regarding South Korean products made in an inter-Korean industrial complex in North Korea.
South Korea is the world's 11th-largest economy and the U.S.'s seventh-biggest trading partner. Two-way trade amounted to US$72 billion last year, with South Korea posting a surplus of $16 billion, according to South Korean government data.
The two sides, scheduled to hold the next round of free trade talks in the U.S. in early September, hope to wrap up the talks by the end of March 2007.
Seoul, July 25 (Yonhap News)
