South Korea: Healthcare System and Drug Regulatory Overview

Introduction

South Korea has high quality healthcare but comparatively low public financing. With high out-of-pocket costs, despite universal health insurance, ongoing reforms aim to contain drug costs. While the regulatory landscape is not simple to navigate, a relatively centralized structure allows for rapid responsiveness to changing conditions.

Features and benefits

* Assess the key factors facing pharma in terms of healthcare expenditure, regulatory issues, pricing and reimbursement.
* Review the insurance and healthcare system in South Korea including recent health reforms.
* Gain insight into regulatory and intellectual property issues in South Korea.

Highlights

South Korea’s pharmaceutical expenditure accounted for around 17–24% of total healthcare expenditure in 2008. This is comparatively high pharmaceutical expenditure when measured against international markets, reflecting the easy access to medical products and services in South Korea, and the growth of the domestic pharmaceutical market.
To address South Korea’s disproportionately high expenditure on pharmaceuticals, drug pricing and reimbursement policies in the country have undergone significant, ongoing changes since 2006, including the introduction of a number of drug price cutting mechanisms.
Improvements towards achieving international harmonization are continuing, with plans to bolster intellectual property provisions to assuage trade partners.

Your key questions answered

* What are the key factors facing pharma in terms of healthcare expenditure, regulatory issues, pricing and reimbursement?
* How has the insurance and healthcare system in South Korea evolved in light of recent health reforms?
* What are the regulatory and intellectual property issues in South Korea?
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Executive Summary
South Korea – Introduction
South Korea – Strategic scoping and focus
South Korea – Key findings
Healthcare expenditure
Insurance and healthcare system
Healthcare reforms
Regulatory issues
Pricing and reimbursement
Related reports
Upcoming related reports
SOUTH KOREA – HEALTHCARE EXPENDITURE
South Korea – Public healthcare expenditure in South Korea is comparatively low
SOUTH KOREA – INSURANCE AND HEALTHCARE SYSTEM OVERVIEW
South Korea – Healthcare organization is centralized
South Korea – Despite high quality infrastructure, health services are limited by labor shortages
Most healthcare facilities are privately operated
South Korea – Funding of healthcare services combines insurance and patient contributions
Different social insurance programs cover specific population groups
The MAP is for low-income South Koreans
Private health insurance is limited but growing
SOUTH KOREA – HEALTHCARE REFORMS
South Korea – Limited National Health Insurance was first introduced in 1977
Integration Reform created a single payer
Benefits have been expanded substantially in recent years
South Korea – The Separation Reform in 2000 divided prescribing and dispensing responsibilities
Unintended consequences of Separation Reform included higher pharmaceutical costs
Greater consequences for illegal rebates and improper promotion have been introduced to cut pharmaceutical costs
South Korea – Rapidly increasing costs to the Medical Aid Program led to cost-sharing reforms in 2007
South Korea – Long-term care insurance has been introduced for the elderly
SOUTH KOREA – DRUG APPROVAL AND REGULATORY PROCESSES
South Korea – The Korean Food and Drug Administration is the key drug regulatory body
Drug approval involves many steps in South Korea
Orphan drugs can follow a fast-tracked application process
South Korea – Working towards simplifying and speeding up the registration process
South Korea – Fees for the evaluation of prescription medicines were increased in 2009
South Korea – Clinical trials, manufacturing, and labeling standards have been improving
South Korea – Biosimilar guidelines were introduced 2 years ago
South Korea – Intellectual property rights have improved due to international trade pressure
Formal data exclusivity will be introduced under FTA agreements
South Korea – High profile patent infringement lawsuits have historically sided with domestic generics manufacturers
South Korea – Drug counterfeiting is a concern due to proximity to China
SOUTH KOREA – PRICING AND REIMBURSEMENT
South Korea – Reimbursement decisions are made by HIRA
The Positive List System was introduced in 2006
South Korea – The NHIC negotiates prices for reimbursed drugs
Price-volume agreements seek to contain reimbursement costs
Drug pricing largely depends on the level of innovation
South Korea – Public reimbursement of pharmaceuticals is based on actual transactional pricing
Maximum reimbursement price reduction penalties are imposed on companies offering kickbacks
South Korea – Triennial price cuts are applied to reimbursed pharmaceutical products
South Korea – FTA negotiations identified shortcomings in regulatory system
South Korea – Out-of-pocket costs are high
BIBLIOGRAPHY
Publications and online articles
Datamonitor reports and products
APPENDIX
Exchange rates used in this report
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