Court throws out drug company pricing complaint

Drug ruled not innovative, undeserving of high price

A South Korean court ruled in favor of a civic group in its legal fight for price cuts of a cancer-treating drug manufactured by multinational pharmaceutical company AstraZeneca.

The Seoul Administration Court said in its ruling that the London-based drug firm failed to prove the value of Iressa as an innovative drug in treating lung cancer, thus turning down the pharmaceutical firm’s suit seeking to nullify a price cut enforced by the Ministry of Health and Welfare in August.

In June, the government’s Drug Evaluation Committee reduced the price of Iressa from 62,010 won (US$64) to 55,003 won per tablet at the request of a civic group, the Health Right Network. AstraZeneca filed a lawsuit against the committee’s price cut.

"If Iressa is regarded as an innovative new drug, it should show a marked improvement from existing medications. But that effect was not proven in clinical tests," the court said in its ruling.

The court ruling was welcomed by the civic group, which issued a statement that said, "This marks the first case in which [the people] have won the right to lower drug prices, covered by health insurance."

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