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The United States asked South Korea to allow U.S.-made drugs to be covered by health insurance in recent free trade agreement (FTA) talks on pharmaceuticals and medical equipment.

It also asked Korea to lower the prices of generic drugs, which have been fixed too high, by checking their cost effectiveness again, according to the Health and Welfare Ministry’s recent report on the FTA meetings yesterday.

If Korea accepts the demands, it is expected to give American pharmaceutical firms more chances to advance into the Korean market and to deal a serious blow to Korean drug companies, which have concentrated on making generic drugs.

According to the report, the U.S. agreed on Korea’s new drug insurance policy that aims to offer quality drugs at an affordable price at the Korea-U.S. FTA talks held in Seattle last month.

But the U.S. demanded Korea classify medicines patented in the U.S. or drugs approved by the Food and Drug Administration in the ``innovative drugs’’ category, so that such drugs can be covered by Korean health insurance.

Experts say the demand will make Korea’s new drug policy virtually useless. Under the new policy, the ministry planned to not automatically place new drugs on a list of ``positive drugs,’’ which enables people to be reimbursed under related insurance policies when they use them. Rather it will conduct strict screening to check drugs’ cost effectiveness before they are added to the list.

The U.S. also asked Korea to reevaluate generic drugs’ cost effectiveness and decide whether to add them to the list, the report said.

Regarding intellectual property on medicine, the U.S. proposed a ban on disclosing pharmaceutical firms’ documents submitted for production approval, so that other generic drug producing companies will not be able to use the documents in developing drugs.

If the demand is accepted, Korean firms will not be able to make generic drugs even if the U.S.-made drugs’ patent is expired.

The government plans to compromise as much as possible with the U.S. before the fourth round of the FTA talks to be held in Korea on Oct. 23-27.

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