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Drug Pricing in South Korea


  • Hye-Young Kwon

    (Mokwon University)

  • Brian Godman

    (Karolinska Institutet, Karolinska University Hospital Huddinge
    University of Strathclyde)


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. This study reviews these policies and their implications based on pricing regulations as well as a literature review. New medicines 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. Repricing mechanisms were complicated and now redundant. 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 generic drugs.

Suggested Citation

  • Hye-Young Kwon & Brian Godman, 2017. "Drug Pricing in South Korea," Applied Health Economics and Health Policy, Springer, vol. 15(4), pages 447-453, August.
  • Handle: RePEc:spr:aphecp:v:15:y:2017:i:4:d:10.1007_s40258-017-0307-0
    DOI: 10.1007/s40258-017-0307-0

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    References listed on IDEAS

    1. Bae, Eun-Young & Hong, Ji-Min & Kwon, Hye-Young & Jang, Suhyun & Lee, Hye-Jae & Bae, SeungJin & Yang, Bong-Min, 2016. "Eight-year experience of using HTA in drug reimbursement: South Korea," Health Policy, Elsevier, vol. 120(6), pages 612-620.
    2. Bonny Parkinson & Catherine Sermet & Fiona Clement & Steffan Crausaz & Brian Godman & Sarah Garner & Moni Choudhury & Sallie-Anne Pearson & Rosalie Viney & Ruth Lopert & Adam Elshaug, 2015. "Disinvestment and Value-Based Purchasing Strategies for Pharmaceuticals: An International Review," PharmacoEconomics, Springer, vol. 33(9), pages 905-924, September.
    3. Su-Yeon Yu & Bong-Min Yang & Jin-Hyun Kim, 2013. "New Anti-Rebate Legislation in South Korea," Applied Health Economics and Health Policy, Springer, vol. 11(4), pages 311-318, August.
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    Cited by:

    1. Amarawan Pentrakan & Cheng-Chia Yang & Wing-Keung Wong, 2021. "How Well Does a Sequential Minimal Optimization Model Perform in Predicting Medicine Prices for Procurement System?," IJERPH, MDPI, vol. 18(11), pages 1-17, May.
    2. Kwon, Hye-Young & Bae, Seungjin & Choi, Sang-eun & Park, Sylvia & Lee, Eui-Kyung & Park, Sungmin & Kim, Jinhyun, 2019. "Easy cuts, easy rebound: Drug expenditures with massive price cuts in Korea," Health Policy, Elsevier, vol. 123(4), pages 388-392.
    3. Mingyue Zhao & Lingyi Zhang & Zhitong Feng & Yu Fang, 2021. "Physicians’ Knowledge, Attitude and Practice of Generic Substitution in China: A Cross-Sectional Online Survey," IJERPH, MDPI, vol. 18(15), pages 1-13, July.
    4. Kwon, Hye-Young & Kim, Jinhyun, 2020. "Consistency of new drug pricing in Korea: Bridging variations among personnel in price negotiations," Health Policy, Elsevier, vol. 124(9), pages 965-970.
    5. Yan Sun & Zheng Zhu & Jiawei Zhang & Peien Han & Yu Qi & Xiaoyang Wang & Li Yang, 2022. "Impacts of National Drug Price Negotiation on Expenditure, Volume, and Availability of Targeted Anti-Cancer Drugs in China: An Interrupted Time Series Analysis," IJERPH, MDPI, vol. 19(8), pages 1-10, April.

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