Drug pricing in South Korea

Background: Between 2000 and 2013, spending on medicines in Korea increased by 275.3%. In order to curb this trend, several pricing policies and measures were introduced. Objectives: This study reviews these policies and their implications. Methods: Review of pricing regulations as well as a literature review. Results: New medicines must now undergo both a reimbursement assessment and price negotiations. The reimbursement of new medicines is based on their cost-effectiveness. The prices of new medicines are subsequently fixed through negotiations between the payer, the National Health Insurance Service, and the relevant manufacturer. Generic drugs are automatically priced via a new standard methodology. Re-pricing mechanisms were complicated and now redundant. Conclusions: Simple and efficient measures rather than complex and inefficient measures are needed to maintain the value for money principle for new medicines as well as achieve financial efficiency through price competition among multiple s sourced drugs, building on the experiences in other countries.