Korean pharmaceutical companies submitted clinical re-evaluation results for choline supplements last month, with the trial failing to meet its primary endpoint for mild cognitive impairment treatment. The failure threatens a 26-year-old market valued at 500-600 billion won annually, as companies had already lost multiple lawsuits challenging the government's reimbursement reduction and clawback procedures. The clinical trial found no significant difference in cognitive function maintenance or improvement between patients taking choline supplements and control groups, though a 7.76 percentage point difference appeared in a subset analysis of compliant patients—a finding whose scientific validity remains uncertain. This development follows a 2019 public audit request that triggered regulatory scrutiny, noting that seven of eight countries Korea references for drug pricing treat choline as food or dietary supplements rather than prescription medications, with the eighth country (Italy) classifying it as medicine but not covering it under health insurance.
Clinical Re-evaluation Process Reveals Primary Endpoint Failure
Clinical re-evaluation is a procedure to re-verify the efficacy of already approved and marketed drugs through clinical trials. This marks the first large-scale confirmatory clinical trial for choline supplements in Korea. When choline supplements received domestic approval in 2000, the "foreign pharmacopoeia evidence system" was in effect, allowing ingredients listed in advanced countries' pharmacopoeias to receive indication and health insurance reimbursement approval without separate clinical trials.
The Ministry of Food and Drug Safety instructed pharmaceutical companies to prove efficacy through clinical re-evaluation and stated it would delete indications if they failed. The National Health Insurance Service also signed conditional clawback contracts with pharmaceutical companies to reclaim 20% of prescription amounts paid from the clinical trial plan approval date to the deletion point if indications are removed.
The submitted clinical results failed to achieve the primary endpoint. There was no significant difference in cognitive function maintenance or improvement between the medication group taking choline supplements and the patient group that did not. A supplementary analysis targeting patients who faithfully followed medication guidelines (PPS) found a 7.76 percentage point difference, but uncertainty remains whether the Ministry of Food and Drug Safety will recognize this, given that PPS characteristics can be biased toward patients who manage their health well. A Ministry of Food and Drug Safety official stated, "Since the re-evaluation results have been submitted, we plan to review them based on scientific validity." Clinical trial results for Alzheimer's-type dementia indications are scheduled for submission in December next year.
Pharmaceutical Companies Lose Series of Legal Challenges Against Government
Pharmaceutical companies filed lawsuits to cancel reimbursement reduction, cancel clawback negotiation orders, and invalidate clawback negotiation contracts against the government, but lost consecutively. The Supreme Court ultimately sided with the government in the clawback negotiation order cancellation lawsuit and reimbursement reduction cancellation lawsuit in 2024 and 2025, respectively. The clawback negotiation contract invalidation lawsuit lost in the first trial at Seoul Administrative Court last year, with the appeal trial currently in progress.
Originally, the government planned to reduce reimbursement simultaneously with the announcement and complete clinical re-evaluation by 2025. However, lawsuits surrounding choline supplements continued for five years, and clinical trials were delayed due to COVID-19, resulting in reimbursement reduction occurring last year and mild cognitive impairment clinical trial final results being submitted only last month.
Market Size and Company Financial Provisions Reflect Clawback Risk
According to pharmaceutical market research firm UBIST, choline supplement prescription amounts were 622.3 billion won in 2023, 612.3 billion won in 2024, and 545.6 billion won in 2025, maintaining an annual market of 500-600 billion won until recently. Simply applying 20% of prescription amounts from June 2021 when clinical trials began to the present, the clawback scale exceeds 500 billion won.
Pharmaceutical companies selling choline supplements are reflecting clawback provisions in their accounting. Daewoong Bio and Chong Kun Dang, which have the largest prescription volumes, have reflected estimated liabilities approaching 100 billion won each, assuming clinical re-evaluation failure. Hanmi Pharmaceutical, Alico Pharmaceutical, Dongkoo Bio & Pharma, Kookje Pharma, Dong Kwang Pharmaceutical, Genupharm, Dong-A ST, and Hwan In Pharm are also reflecting recoverable amounts ranging from tens of billions to hundreds of billions of won in their financial statements.
An official from the Pharmacists for Healthy Society, which filed the public audit request, argued, "In the case of choline supplements, the possibility of side effects such as stroke and cerebral hemorrhage from long-term use has also been raised, so maintaining indications is not the answer."
Regulatory Authority to Review Results Based on Scientific Validity
If the Ministry of Food and Drug Safety ultimately decides to delete indications, the National Health Insurance Service will initiate large-scale clawback procedures. A Ministry of Food and Drug Safety official stated, "Since the re-evaluation results have been submitted, we plan to review them based on scientific validity."
FAQ
What did Korean pharmaceutical companies submit last month regarding choline supplements?
Korean pharmaceutical companies submitted clinical re-evaluation results for choline supplements for mild cognitive impairment (degenerative and vascular types) last month. The trial failed to meet its primary endpoint, showing no significant difference in cognitive function maintenance or improvement between patients taking choline supplements and control groups.
Why are choline supplements facing potential health insurance reimbursement clawback in Korea?
Choline supplements face potential clawback because seven of eight countries Korea references for drug pricing (A8 countries: United States, United Kingdom, Germany, France, Italy, Switzerland, Japan, Canada) treat choline as food ingredients or dietary supplements rather than prescription medications. The eighth country, Italy, classifies it as medicine but does not apply health insurance reimbursement. This discrepancy triggered a 2019 public audit request questioning why over 1 trillion won in health insurance funds had been spent on medications lacking evidence.
How much could pharmaceutical companies be required to pay back if choline supplement indications are deleted?
If indications are deleted, the clawback scale exceeds 500 billion won, calculated as 20% of prescription amounts from June 2021 (when clinical trials began) to the present. Major pharmaceutical companies Daewoong Bio and Chong Kun Dang have each provisioned approximately 100 billion won in their financial statements, assuming clinical re-evaluation failure.
