JW Jungwoo Pharmaceutical's Labor Induction Drug Shortage and Corporate 'Social Responsibility' [AK Radio]

The obstetrics and gynecology field has been thrown into chaos following JW Pharmaceutical's declaration of a shortage of the labor-inducing drug 'Oxytocin.' JW Pharmaceutical sent official letters to obstetrics and gynecology departments nationwide, announcing a suspension of supply from November 1 until January next year due to issues with sourcing raw materials from India. Fortunately, as the social impact grew, the company decided to resume supply a month earlier, starting December 4. This shortage crisis is considered to have caused significant fear among expectant mothers and their families.

Oxytocin is an essential medicine that helps uterine contractions during labor. It is necessary not only for natural childbirth but also for cesarean section surgeries. Without this drug, the entire labor process is bound to face disruptions. Obstetrics specialists expressed concerns that without oxytocin, labor time would significantly increase, making natural childbirth impossible, and nearly all mothers would have to undergo cesarean sections. Even during cesarean surgeries, oxytocin must be administered to contract the sutured uterus; without it, uterine bleeding may not stop, and in severe cases, a hysterectomy might be required.

Oxytocin is like a critical screw in a spaceship. Just as a spaceship cannot launch if a single screw is missing, experts explain that without oxytocin, the entire childbirth process cannot proceed safely and healthily, making it a vital essential medicine.

In the domestic oxytocin market, JW Pharmaceutical holds 75%, and Yuhan Corporation holds 25%. It is practically a monopoly product of JW Pharmaceutical. While JW Pharmaceutical recommended substituting with Yuhan Corporation's product upon announcing the shortage, Yuhan stated, "This year's supply has already been exhausted, and our production capacity cannot fill JW Pharmaceutical's gap." From the perspective of medical institutions, wholesalers exist, so suddenly switching from JW Pharmaceutical's product to Yuhan's is not a simple logistical matter. However, Yuhan announced that it resumed production last week and will supply as much as possible.

This crisis is the second occurrence following last year. In August last year, JW Pharmaceutical also declared a supply suspension due to cost burdens caused by low drug prices. At that time, JW Pharmaceutical notified the Ministry of Food and Drug Safety that the low drug price made cost profitability unfeasible, forcing supply suspension. Negotiations related to the Ministry of Health and Welfare and insurance price increases were already underway then. JW Pharmaceutical stated that it would resume supply once the price increase was decided and applied, and eventually, the Ministry of Health and Welfare raised the price by 40% in October last year to resolve the issue. However, less than a year later, another shortage crisis occurred.

Oxytocin is designated as a non-discontinuable drug, so pharmaceutical companies cannot arbitrarily stop production. Currently, the price is only 273 KRW per ampoule. Despite being essential during labor, the very low price setting discourages pharmaceutical companies from production. In fact, as of last year, JW Pharmaceutical's oxytocin sales were 140 million KRW, and Yuhan's were 44 million KRW. Considering their total sales of 750 billion KRW and 1.8 trillion KRW respectively, these figures are extremely minimal.

According to obstetrics specialists, oxytocin is not a drug administered just once. It must be continuously administered by adding two ampoules to the basic IV fluid during labor. Considering labor takes 5 to 10 hours, the actual usage amount is considerable. Even if the price per ampoule is low, since the drug must be continuously administered whether labor takes 5 or 10 hours, the total usage is very high.

Currently, the medical fee for childbirth is operated under a bundled payment system, with a set amount of 790,000 KRW per case. This amount includes all drugs and medical procedures used during labor. This contrasts with other medical procedures, which operate on a fee-for-service basis, where costs accumulate with each injection or drug used. The medical community points out that this bundled payment system deepens deficits in obstetrics and gynecology departments and accelerates closures.

Especially this year, due to medical crises and emergency room issues at university hospitals, the Ministry of Health and Welfare is spending over 100 billion KRW monthly from unplanned health insurance reserves. Under these circumstances, raising drug prices is difficult because it directly affects the financial soundness of the National Health Insurance.

Non-discontinuable drugs have a nature similar to public goods like public transportation. Like city buses or subways, which do not charge high fares but operate through subsidies or appropriate fare settings, essential medicines are priced in a similar manner, according to experts. Although medicines themselves are not public goods, essential medicines are priced this way.

The labor-inducing drug oxytocin is important not only for expectant mothers currently pregnant but also for those planning to marry or parents with daughters who may have children. The absence of this drug means daughters might not be able to give birth or could face risks during childbirth, making it a concern for all families. It is also a national issue that government officials responsible for addressing low birth rates should pay attention to. It is a medicine crucial for supporting childbirth and maintaining the nation's population in an era of demographic decline.

It is hoped that JW Pharmaceutical will secure raw materials more comfortably in the future to prevent a recurrence of oxytocin supply suspension. The medical community shares the opinion that such shortages or supply suspensions should not happen annually, and stable supply is necessary to alleviate the anxiety of expectant mothers.

Editor's Note

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