U.S. government pushed Korea to drop new drug policy

U.S. government pushed Korea to drop new drug policy
Written by Heeseob Nam (hurips@gmail.com)
July 21, 2006
http://www.bilaterals.org/article.php3?id_article=5315

Alexander Vershbow, U.S. Ambassador to the Republic of Korea, visited Korean Ministry of Public Health on July 19 and had a meeting with Korean Minister (Mr. Yoo). On July 18, Mr. Vershbow requested the meeting and the purposes of his visit are to deliver U.S. government’s concerns on the drug pricing policy of Korean government. On May, the Korean government announced to reform its drug pricing policy of the national healthcare system by adopting measures to positively list reimbursable prescription drugs rather than the current “negative list”, which only lists the exclusions. During the second round of the KORUS FTA, the US negotiators expressed its strong opposition to the positive list system and refused to attend the Pharmaceutical and Medical Device Working Group meeting.

Reportedly, Mr. Vershbow strongly argued that the positive list system should be reconsidered since it would strike a blow to transnational pharmaceutical companies. After the meeting, Mr. Vershbow told a pressman that “Very constructive discussion. We both share common interests in putting FTA talks back on the track. … We also believe that it is important for foreign pharmaceutical companies to have a playing field in Korean market.”

Many Koreans believes this is an intervention of domestic affairs and pressure upon Korean government to withdraw the introduction of beneficial new drug policy. Before his trip to the U.S. this weekend, Mr. Vershbow tried to deliver his government’s position to Korean government on one hand and seek possible ways to get much fruits in the FTA negotiations on the other hand.

It is revealed that in the meeting Mr. Vershbow expressed “conditional acceptance” of the positive list system. Reportedly, he told that if the Korean government delays the implementation of the policy and has further discussions for the details with the U.S., the positive list system would be allowed to implement. This double-faced strategy shows that the intention of the U.S. lies in getting more concessions from Korean side in the KORUS FTA negotiation, which include stronger protection of intellectual property rights on pharmaceuticals. Korean Minister of Public Health showed the possibility of compromise by saying “If the U.S. brings up reasonable proposals, I would consider them as faithfully as possible.”

According to Korean government’s plan, legislation steps will be taken next week for the implementation of the positive list system. Official announcements from the Korean government are only focused on defending the positive list system without mentioning anything about another key issues that would be impaired by the compromise.

* For Korean NGO Statement on the positive list system and negotiation of 2nd round of the KORUS FTA, refer to http://www.bilaterals.org/article.php3?id_article=5313

** For an official speech of Mr. Vershbow on the KORUS FTA, refer to http://korea.usembassy.gov/the_korus_fta.html