IDEAS home Printed from https://ideas.repec.org/a/spr/hecrev/v10y2020i1d10.1186_s13561-020-00289-6.html
   My bibliography  Save this article

Is greater generic competition also linked to lower drug prices in South Korea?

Author

Listed:
  • Kyung-Bok Son

    (Ewha Womans University)

Abstract

Background Although the association between the price of generic drugs and market competitiveness has been explored in various high-income countries, this association has not been empirically evaluated in South Korea. We aim to determine the association between the prices of generic drugs and market competitiveness in South Korea. Methods A list of originator drugs approved by the national authority from 2000 to 2019 and their corresponding generic drugs were grouped along with the baseline information. The market was categorized into four groups based on the number of manufacturers: duopoly (2 manufacturers); low- (3–25 manufacturers); medium- (26–75 manufacturers); and high-competition (more than 76 manufacturers) markets. Price variance, calculated as the difference between the maximum price and minimum price divided by the maximum price, was obtained. A multivariate regression model was applied to regress price variance on the characteristics of market competitiveness, controlling for the characteristics of the originator drugs and their price level in the market. Results A total of 986 originator drugs were identified and then divided into duopoly (31%), low- (56%), medium- (9%), and high-competition (4%) markets; the median of the price variance for these markets was 0.013, 0.077, 0.200, and 0.228, respectively. In a multivariate regression model, price variance was associated with the characteristics of the originator drug, including the Anatomical Therapeutic Chemical classification, the route of administration, and the approval year. Controlling for the characteristics of the originator drugs, market competitiveness was positively associated with price variance. Conclusions The positive association between price variance and market competitiveness is still consistent in South Korea, where rare price competition among a large number of generic manufacturers has been reported. However, no significant price variance was observed between medium- and high-competition markets. These findings support policies for managing a large number of generic manufacturers in South Korea.

Suggested Citation

  • Kyung-Bok Son, 2020. "Is greater generic competition also linked to lower drug prices in South Korea?," Health Economics Review, Springer, vol. 10(1), pages 1-9, December.
    • Handle: RePEc:spr:hecrev:v:10:y:2020:i:1:d:10.1186_s13561-020-00289-6
    DOI: 10.1186/s13561-020-00289-6
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1186/s13561-020-00289-6
    File Function: Abstract
    Download Restriction: no
    File URL: https://libkey.io/10.1186/s13561-020-00289-6?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Vogler, Sabine & Zimmermann, Nina & de Joncheere, Kees, 2016. "Policy interventions related to medicines: Survey of measures taken in European countries during 2010–2015," Health Policy, Elsevier, vol. 120(12), pages 1363-1377.
    2. Annalisa Belloni & David Morgan & Valérie Paris, 2016. "Pharmaceutical Expenditure And Policies: Past Trends And Future Challenges," OECD Health Working Papers 87, OECD Publishing.
    3. Vogler, Sabine & Paris, Valérie & Ferrario, Alessandra & Wirtz, Veronika J. & Joncheere, Kees de & Schneider, Peter & Pedersen, Hanne Bak & Dedet, Guillaume & Babar, Zaheer-Ud-Din, 2017. "How can pricing and reimbursement policies improve affordable access to medicines? Lessons learned from European countries," LSE Research Online Documents on Economics 68862, London School of Economics and Political Science, LSE Library.
    4. Lexchin, Joel, 2004. "The effect of generic competition on the price of brand-name drugs," Health Policy, Elsevier, vol. 68(1), pages 47-54, April.
    5. Sabine Vogler & Valérie Paris & Alessandra Ferrario & Veronika J. Wirtz & Kees Joncheere & Peter Schneider & Hanne Bak Pedersen & Guillaume Dedet & Zaheer-Ud-Din Babar, 2017. "How Can Pricing and Reimbursement Policies Improve Affordable Access to Medicines? Lessons Learned from European Countries," Applied Health Economics and Health Policy, Springer, vol. 15(3), pages 307-321, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Chris Sampson’s journal round-up for 26th October 2020
      by Chris Sampson in The Academic Health Economists' Blog on 2020-10-26 12:00:03

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Wettstein, Dominik J. & Boes, Stefan, 2022. "How value-based policy interventions influence price negotiations for new medicines: An experimental approach and initial evidence," Health Policy, Elsevier, vol. 126(2), pages 112-121.
    2. Bence Kovács & Miklós Darida & Judit Simon, 2021. "Drugs Becoming Generics—The Impact of Genericization on the Market Performance of Antihypertensive Active Pharmaceutical Ingredients," IJERPH, MDPI, vol. 18(18), pages 1-20, September.
    3. Dominik J. Wettstein & Stefan Boes, 2019. "Effectiveness of National Pricing Policies for Patent-Protected Pharmaceuticals in the OECD: A Systematic Literature Review," Applied Health Economics and Health Policy, Springer, vol. 17(2), pages 143-162, April.
    4. Vogler, Sabine & Fischer, Stefan, 2020. "How to address medicines shortages: Findings from a cross-sectional study of 24 countries," Health Policy, Elsevier, vol. 124(12), pages 1287-1296.
    5. Irene Eriksson & Mia von Euler & Rickard E. Malmström & Brian Godman & Björn Wettermark, 2019. "Did we see it Coming? An Evaluation of the Swedish Early Awareness and Alert System," Applied Health Economics and Health Policy, Springer, vol. 17(1), pages 93-101, February.
    6. Iyn-Hyang Lee & Karen Bloor & Eun-Young Bae, 2023. "A Comparative Analysis of Anticancer Drug Appraisals Including Managed Entry Agreements in South Korea and England," Applied Health Economics and Health Policy, Springer, vol. 21(2), pages 347-359, March.
    7. Marcelien H. E. Callenbach & Rick A. Vreman & Aukje K. Mantel-Teeuwisse & Wim G. Goettsch, 2022. "When Reality Does Not Meet Expectations—Experiences and Perceived Attitudes of Dutch Stakeholders Regarding Payment and Reimbursement Models for High-Priced Hospital Drugs," IJERPH, MDPI, vol. 20(1), pages 1-12, December.
    8. Sabine Vogler & Guillaume Dedet & Hanne Bak Pedersen, 2019. "Financial Burden of Prescribed Medicines Included in Outpatient Benefits Package Schemes: Comparative Analysis of Co-Payments for Reimbursable Medicines in European Countries," Applied Health Economics and Health Policy, Springer, vol. 17(6), pages 803-816, December.
    9. Jaime Espin & Michael Schlander & Brian Godman & Pippa Anderson & Jorge Mestre-Ferrandiz & Isabelle Borget & Adam Hutchings & Steven Flostrand & Adam Parnaby & Claudio Jommi, 2018. "Projecting Pharmaceutical Expenditure in EU5 to 2021: Adjusting for the Impact of Discounts and Rebates," Applied Health Economics and Health Policy, Springer, vol. 16(6), pages 803-817, December.
    10. Melanie Büssgen & Tom Stargardt, 2023. "Does health technology assessment compromise access to pharmaceuticals?," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 24(3), pages 437-451, April.
    11. Sabine Vogler & Peter Schneider & Nina Zimmermann, 2019. "Evolution of Average European Medicine Prices: Implications for the Methodology of External Price Referencing," PharmacoEconomics - Open, Springer, vol. 3(3), pages 303-309, September.
    12. Dominik J. Wettstein & Stefan Boes, 2020. "The impact of reimbursement negotiations on cost and availability of new pharmaceuticals: evidence from an online experiment," Health Economics Review, Springer, vol. 10(1), pages 1-15, December.
    13. Sabine Vogler & Kenneth R. Paterson, 2017. "Can Price Transparency Contribute to More Affordable Patient Access to Medicines?," PharmacoEconomics - Open, Springer, vol. 1(3), pages 145-147, September.
    14. Luka Vončina & Tea Strbad & Jurij Fürst & Maria Dimitrova & Maria Kamusheva & Megi Vila & Ileana Mardare & Kristina Hristova & Andras Harsanyi & Dragana Atanasijević & Igor Banović & Ana Bobinac, 2021. "Pricing and Reimbursement of Patent-Protected Medicines: Challenges and Lessons from South-Eastern Europe," Applied Health Economics and Health Policy, Springer, vol. 19(6), pages 915-927, November.
    15. Carolina Zampirolli Dias & Brian Godman & Ludmila Peres Gargano & Pâmela Santos Azevedo & Marina Morgado Garcia & Maurílio Souza Cazarim & Laís Lessa Neiva Pantuzza & Nelio Gomes Ribeiro-Junior & Andr, 2020. "Integrative Review of Managed Entry Agreements: Chances and Limitations," PharmacoEconomics, Springer, vol. 38(11), pages 1165-1185, November.
    16. Merja Halme & Kari Linden & Kimmo Kääriä, 2009. "Patients’ Preferences for Generic and Branded Over-the-Counter Medicines," The Patient: Patient-Centered Outcomes Research, Springer;International Academy of Health Preference Research, vol. 2(4), pages 243-255, December.
    17. Roger Feldman & Félix Lobo, 2013. "Competition in prescription drug markets: the roles of trademarks, advertising, and generic names," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 14(4), pages 667-675, August.
    18. Simon Pol & Paula Rojas Garcia & Fernando Antoñanzas Villar & Maarten J. Postma & Antoinette D. I. Asselt, 2021. "Health-Economic Analyses of Diagnostics: Guidance on Design and Reporting," PharmacoEconomics, Springer, vol. 39(12), pages 1355-1363, December.
    19. Sabine Vogler & Valérie Paris & Alessandra Ferrario & Veronika J. Wirtz & Kees Joncheere & Peter Schneider & Hanne Bak Pedersen & Guillaume Dedet & Zaheer-Ud-Din Babar, 2017. "How Can Pricing and Reimbursement Policies Improve Affordable Access to Medicines? Lessons Learned from European Countries," Applied Health Economics and Health Policy, Springer, vol. 15(3), pages 307-321, June.
    20. Pilar García-Gómez & Toni Mora & Jaume Puig-Junoy, 2018. "Does €1 Per Prescription Make a Difference? Impact of a Capped Low-Intensity Pharmaceutical Co-Payment," Applied Health Economics and Health Policy, Springer, vol. 16(3), pages 407-414, June.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:hecrev:v:10:y:2020:i:1:d:10.1186_s13561-020-00289-6. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com/economics/journal/13561 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.