The impact of South Korea’s new drug-pricing policy on market competition among off-patent drugs

Hye-Young Kwon, Hyungmin Kim, Brian Godman, Michael R. Reich

Research output: Contribution to journalArticlepeer-review

8 Citations (Scopus)
85 Downloads (Pure)


A new pricing policy was introduced in Korea in April 2012 with the aim of strengthening competition among off-patent drugs by eliminating price gaps between originators and generics. Examine the effect of newly implemented pricing policy. Retrospectively examining the effects through extracting from the National Health Insurance claims data a 30-month panel dataset (January 2011 - June 2013) containing consumption data in four major therapeutic classes (antihypertensives, lipid-lowering drugs, antiulcerants and antidepressants). Proxies for market competition were examined before and after the policy. The new pricing policy didn’t enhance competition among off-patent drugs. In fact, price dispersion significantly decreased as opposed to the expected change. Originator-to-generic utilization increased to 6.12 times (p=0.000) after the new policy. The new pricing policy made no impact on competition among off-patent drugs. Competition in the off-patent market cannot be enhanced unless both supply and demand-side measures are coordinated.
Original languageEnglish
Pages (from-to)1007-1014
Number of pages8
JournalExpert Review of Pharmacoeconomics and Outcomes Research
Issue number6
Early online date22 Sep 2015
Publication statusE-pub ahead of print - 22 Sep 2015


  • drug pricing
  • market competition
  • generics

Cite this