Diplomacy, or pressure?

The United States has repeatedly pressured the South Korean government to nullify a proposed medical pricing policy since May 2001, Representative Kim Hong-shin of the Grand National Party told the National Assembly's Health and Welfare Commission Thursday. Representative Kim said Lee Tae-bok, the former health and welfare minister, was sacked because he resisted that U.S. pressure. Mr. Lee recently issued a statement blaming the foreign pharmaceutical lobby as a reason for his replacement.

"Thomas Hubbard, the U.S. ambassador to South Korea, visited Mr. Lee on March 11 and made a request to form a working-level team to discuss the policy governing standards of medical insurance coverage," Representative Kim said at the assembly commission meeting. "A task force was formed and it held several meetings." He did not explain how the task force was connected to the minister's replacement.

Under the controversial drug policy proposal, the government planned to draw up a list of standard prices for medications used to treat specific conditions. National health insurance would cover no costs higher than the mandated price for a drug known to be effective in treating that condition; if a patient was prescribed a higher-priced alternative, he would pay the difference from his own pocket.

The intent of the policy was to ease financial pressure on the health care insurance system and encourage the use of generic drugs produced by domestic pharmaceutical firms. The plan has drawn a chorus of criticism from drug firms, especially those who hold patents on expensive drugs.

At the Commission meeting, Representative Kim made public letters sent by the U.S. Department of Commerce to the Health and Welfare Ministry in May 2001. The department asked the ministry to provide an opportunity to explain U.S. concerns that the pricing policy could be unfavorable to U.S. pharmaceutical companies.

The Health and Welfare Ministry announced on May 31, 2001, that it would adopt the standard pricing system. Washington again raised the issue at the regular South Korea - U.S. trade review in June, Representative Kim noted.

In July, U.S. Commerce Secretary Donald Evans warned Kim Won-gil, then the health minister, that the policy could trigger a serious trade dispute unless the matter were resolved amicably, Representative Kim said. Due to the warning, the policy was shelved, the legislator said. Mr. Lee, who was appointed as the health and welfare minister in January, tried to reinstate the policy, but says he was replaced after only six months in office because of those efforts.

Kim Sung-ho, the current health minister, scoffed at that description. "I cannot understand why Mr. Lee made such arguments," he said. Lee Kyeong-ho, the vice minister, also downplayed the charges of pressure.

by Kim Chung-ha