• Health Policy and Management
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• v.15 no.3
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• pp.40-59
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• 2005

The objective of this paper is to examine what impact the newly introduced Purchasing Price Reimbursement System, where insurance drugs are reimbursed at the prices as they were purchased by medical care providers under the maximum allowable cap, has upon the health insurer's financing situation. The impact of the Purchasing Price Reimbursement System is considered to be confined mainly to the inpatient department among three drug reimbursement fields such as inpatient department, out-patient department and pharmacy. Hypothesis was set and tested in this study for each of three components of inpatient drug reimbursement in health insurance, i.e. average price level, composition of drugs and their overall volume. Drug price level calculated in this study from 403 selected reimbursement drugs according to the Laspayres methodology revealed faster decline under the new Purchasing Price Reimbursement System than previously by $1.53\%$ on the annual average basis. However, additional 1.4 percent financial burden in the ratio of the total inpatient reimbursement was owed by the health insurer. This was analysed to be a combined result of both 2.0-3.1 percent of reduced reimbursement due to drug price decline and 3.4-4.5 percent of additional reimbursement due to drug volume increase. These results suggest that recalling the Purchasing Price Reimbursement System would not have so much impact upon the health insurer's financial situation given that the current compulsory separation between doctor's prescribing and pharmacist's dispensing is irrevocable.

• Korea Journal of Hospital Management
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• v.8 no.1
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• pp.1-23
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• 2003

General drug prices involve three stages: shipment stage, wholesaler stage and retail stage. Policies on drug price differ from country to country. Shipment stage prices are tightly regulated in countries like France and Netherlands. They are free in only a minority of advanced countries, even if these include some major players such as the US, Germany and, in a very limited sense, Japan. The situation in the UK is very complex with a semi-free system, where drug companies are free to set their own prices but cannot exceed a predetermined profit ceiling. Mark-up at both wholesaler and retail stages is formally admitted in most countries observed. Apart from the general drug prices, reimbursement price of insured drugs has been major policy concerns. Most countries reviewed in this study has exerted some control over reimbursement prices, but differ both in the way how and in the extent to which prices are admitted or fixed. Price fixing has been used in France and Japan. Some countries have transformed their system over time, particularly to move to reference pricing in the last decade. This mechanism has empowered the customer, and improved price competition on the market. Referring to the drug price policies in the advanced countries, this study makes some suggestions for the redirection of Korean price policy for reimbursement drug in health insurance as follows: to match appropriate policy tools to each policy goal; to maximize market mechanism through effective reimbursement price fixing which admits mark-ups in wholesaler and retail prices; to introduce reference pricing system in order to redirect patient's demand with a financial incentive to choose the best-priced drugs and to save the finance of health insurance; and to strengthen surveillance and monitoring mechanism in the drug market.

• Korean Journal of Clinical Pharmacy
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• v.23 no.2
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• pp.89-96
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• 2013

This article aimed to introduce 'risk sharing' schemes for pharmaceuticals between drug manufacturers and healthcare payer. Published literature review was undertaken to summarize risk sharing concepts and collect information on existing scheme examples in other countries focusing on new anticancer drugs. Risk sharing schemes could be categorized into health outcomes-based and non-outcomes (financial) based ones. Outcome-based schemes could be broken down into performance-linked reimbursement and conditional coverage. Performance-linked reimbursement can be further broken into outcomes guarantee and pattern or process of care and conditional coverage included coverage with evidence development and conditional treatment continuation schemes. Non-outcome based schemes included market share and price volume at population level, and utilization caps and manufacturer funded treatment initiation at patient level. We reviewed the fifteen examples for anticancer drugs that risk sharing agreements in response to the inherent uncertainties and increased costs of eleven anticancer drugs. Of them, eight cases were coverage with evidence development schemes. The anticancer drugs except bevacizumab and cetuximab were all listed on the national health insurance formulary in Korea, with reimbursement criteria defined on the basis of approved indications and administrations. Risk sharing approach may be a useful tool to ensure values for drug expenditure, but there are a number of concerns such as high administration costs, lack of transparency and conflicts of interest, especially for performance-based health outcomes reimbursement schemes.

• Health Policy and Management
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• v.16 no.2
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• pp.117-134
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• 2006

Korean health care system introduced the reform for separation between prescribing and dispensing of drugs (SPD reform) in the latter part of the year 2000. The objective of this paper is to look at what change this reform has brought about in the financial situation of Korean public health insurance scheme, particularly in terms of insurance benefit outlay. Since the inception of the reform is a development of more than five years ago, its impact on the finance situation would now start to become apparent. Hypothesis is set in this study for each of three components of drug reimbursement in health insurance, i.e. average price level, composition of drugs and their overall volume. In terms of the classification of health care services by mode of production, the impact of the SPD reform is confined mainly to the last two among three drug reimbursement fields including inpatient department, out-patient department and pharmacy. Pure impact of the SPD reform was estimated to be more or less than 1.7 trillion won, 13.1% of the total outlay of the Nation Health Insurance in 2001, and more than 2.0 trillion won, 14.9% of the total outlay of the Nation Health Insurance in 2003. Both dispensing fees for the pharmacists, which had been newly introduced on occasion of the SPD reform, and larger share of expensive drugs in the medicines prescribed by doctors were confirmed to be main drivers of the augmentation of drug reimbursement.

• Korean Journal of Clinical Pharmacy
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• v.31 no.1
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• pp.1-11
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• 2021

Objective: This study aimed to overview and assess the effectiveness of the policies and regulations that have governed new drug access in Korea, and to propose policies to enhance patient access to drugs, particularly for new innovative medicines. Methods: We approached drug access issues in two perspectives: approval lag (or availability) and reimbursement lag (or affordability). The issues were identified and evaluated through the review of literature, public documents, reports published by the government agencies and private organizations, and news articles. Results: To shorten approval lag, it is recommended to hire and train more reviewers at the Ministry of Food and Drug Safety. Increasing user fees to a realistic level can facilitate this process. To reduce reimbursement lag, flexible incremental cost-effectiveness ratio threshold, alternative cost-effectiveness evaluation, and establishment of funding source other than the national health insurance are identified as the areas to be improved. Conclusion: The current policies and regulations had to be supplemented by new systems to drastically promote patient accessibility to new drugs, consequently in order to promote national public health.

• Korean Journal of Clinical Pharmacy
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• v.27 no.4
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• pp.250-257
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• 2017

Objective: The prevalence rate of osteoarthritis in Koreans aged 50 years or older is 14.3%, and the total amount of medical costs is more than KRW 1 trillion. Recently, the reimbursement guidelines for osteoarthritis treatment have changed. Methods: In this study, we sought to describe prescription patterns of nonsteroidal anti-inflammatory drugs (NSAIDs) and gastro-protective agent (GPA) and analyze the clinical and economic impacts of the new policy using the national health insurance claims data. The incidence of upper gastrointestinal adverse event by policy change was identified through the odds ratio, and changes in medicine and medical costs related to osteoarthritis through mean and median. Results: There were 204,552 patients before the reimbursement guidelines relaxation and 239,710 after it, a 17.2% rise. The prescription ratio was 3.3% for the patients prescribed with COX-2 selective NSAIDs alone and 1.3% for those with both COX-2 selective NSAIDs and GPA combination before the reimbursement guidelines relaxation. The reimbursement guidelines relaxation significantly increased their ratios to 6.9% and 2.8%, respectively. Gastrointestinal adverse events significantly reduced by 1.21%p after reimbursement guidelines relaxation. The average medicine cost per person increased significantly to KRW 140,291 from KRW 137,323 after the reimbursement guidelines relaxation, while the average medical cost per person slightly decreased from KRW 311,605 to KRW 310,755 after the relaxation, showing no meaningful difference. Conclusion: The reimbursement guidelines relaxation may influence on decreasing the upper gastrointestinal adverse event, increasing the medicine costs and maintaining the medical costs for osteoarthritis.

• Health Policy and Management
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• v.19 no.4
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• pp.98-120
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• 2009

The purpose of this study is to elicit preference for drug listing decision criteria and to estimate the ICER threshold in South Korea using the discrete choice experiment (DCE) method. To collect the data, a DCE survey was administered to a subject sample either educated in the principle concepts of pharmacoeconomics or were decision makers within that field. Subjects chose between alternative drug profiles differing in four attributes: ICER, uncertainty, budget impact and severity of disease. The orthogonal and balanced designs were determined through computer algorithm to take the optimal set of drug profiles. The survey employed 15 hypothetical choice sets. A random effect probit model was used to analyze the relative importance of attributes and the probabilities of a recommendation response. Parameter estimates from the models indicated that three attributes (ICER, Impact, Severity of disease) influenced respondents' choice significantly(p${\pm}$0.001). In addition, each parameter displayed an expected sign. The Lower the ICER, the higher the probability of choosing that alternative. Respondents also preferred low levels of uncertainty and smaller impact on health service budget. They were also more likely to choose drugs for serious diseases rather than mild or moderate ones. Uncertainty however is not statistically significant. The ICER threshold, at which the probability of a recommendation was 0.5, was 29,000,000 KW/QALY in expert group and 46,500,000 KW/QALY in industry group. We also found that those in our sample were willing to accept high ICER to get medication for severe diseases. This study demonstrates that the cost-effectiveness, budget impact and severity of disease are the main reimbursement decision criteria in South Korea, and that DCE can be a useful tool in analyzing the decision making process where a variety of factors are considered and prioritized.

• Korean Journal of Clinical Pharmacy
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• v.24 no.1
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• pp.1-8
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• 2014

Objective: Currently, rivaroxaban is widely used clinically for thromboprophylaxis after surgery. However, there are concerns on effectiveness and safety of rivaroxaban for its proper use. We aimed to evaluate the effectiveness and safety of rivaroxaban in orthopaedic patients after total hip replacement surgery in a large medical centre after the preferred formulary was switched from enoxaparin to rivaroxaban. Methods: The study was conducted on the patients who underwent hip arthroplasty surgery at the department of Orthopaedic Surgery at Seoul St. Mary's Hospital, South Korea. Electronic medical records were retrospectively reviewed to identify patients treated with rivaroxaban following total hip replacement between February 2011 and March 2012. Evaluation criteria included indications for use, dose, initiation and duration of therapy, drug interactions, adverse reactions, and status of health care reimbursement. The patients who were on enoxaparin were also reviewed as a reference. Results: We identified 57 patients who received rivaroxaban and 50 who received enoxaparin. All patients were prescribed the drugs for Korean Food and Drug Administration-approved indications. No thromboembolic or bleeding events were observed in either group. However, only 5.3% of rivaroxaban- treated patients had an appropriate length of prophylaxis and only 3.5% began rivaroxaban treatment at the recommended time. Surprisingly, 47.4% of rivaroxaban-treated patients received rivaroxaban despite being ineligible for reimbursement benefits. Conclusion: Rivaroxaban was generally well tolerated clinically. However, the duration of treatment, the time of initiation and patient eligibility for reimbursement require improvements, emphasising the need for education which indicates the area of pharmacists' involvement.

• Health Policy and Management
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• v.21 no.2
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• pp.249-262
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• 2011

Since May 1st in 2008, the products of ginkgo biloba extract have had to be used with the patient's out-of-pocket payment due to reimbursement restriction guidelines. This study aims to analyze the policy effects of reimbursement restriction on pharmaceutical expenditures using interrupted time series(ITS) analysis. We retrieved monthly NHI claims data for the period between May, 2005 and December 2009. The ingredients identified as a substitute for ginkgo biloba have similar indications based on the similar pharmacological activities. The effects of changes in reimbursement scope were evaluated both for all relevant pharmaceuticals within the same therapeutic class and for 2 separate groups : ginkgo biloba's and its substitutes. According to the study results, restrictions on reimbursement scope resulted in savings of the drug expenditures in the targeted therapeutic class. Direct restriction on ginkgo biloba was associated with a decrease in expenditure level by 60.1% and changes in trend from an average increase rate of 1.4% to an average decrease rate of 1.5% for the therapeutic class, with a dramatic decrease in expenditure level(-191.5%) for ginkgo biloba itself, but with an increased expenditure level(+50.1%) and changes in trend from an average increase rate of 2.0% to an average decrease rate of 1.0% for the substitute group. Further policy to restrict nicergoline was associated with additional decrease in expenditure level for the therapeutic class. Additionally, we could identify the balloon effect - a new policy squeezing one part results in bulging out elsewhere. After the restriction of ginkgo biloba, the utilization of and expenditures on its substitutes increased significantly. In conclusion, we demonstrated that consecutively introduced policies effectively reduced overall expenditures on the therapeutic class of interest. Some ingredients played as a substitute while others did not. Further studies need to be conducted to identify which factors determine a substitute.

• Health Policy and Management
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• v.15 no.4
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• pp.1-25
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• 2005

Legislation on pharmaceutical reimbursement decision using economic evaluation results was made in Korea in fm, but has yet to be fully implemented. We evaluated the quality of Korean economic evaluation studies of pharmaceuticals to understand gaps between legislation and implementation. From this evaluation, we propose policy options that might strengthen the research Infrastructure In order to support such studies. We reviewed 23 published studies for drugs conducted between 1996 and 2004. Evaluation criteria included methodological characteristics, healthcare system characteristics, population characteristics, and applicability of results. Large variation in study quality was observed, particularly with study design, outcome data, treatment patterns and interpretation. Korean clinical data used was mostly from observational studies of 1-2 hospitals. Foreign data was extracted from clinical trials that did not Include Asian population and their selection criterion was not clarified. With respect to treatment patterns, medical records and hospital bills were used without adjustment regarding area, hospital type, and others. And next frequent situation relied on expert opinion from academic physicians in specialty practice. preference measures, when used, were not elicited from the Korean population. $78.3\%$ of studies did not clarify the funding source. If the Korean economic evaluation policy is to provide meaningful data for decision makers, the quality of cost-effectiveness studies will need to improve dramatically. This may involve access to or creation of better data, more diverse funding, unproved training of researchers and evaluators, and partnerships with technology manufacturers.