Effective policy initiatives to constrain lipid-lowering drug expenditure growth in South Korea

Abstract

BackgroundThe rapid growth of prescription drug expenditures is a major problem in South Korea. Accordingly, the South Korean government introduced a positive listing system in 2006. They also adopted various price reduction policies. Nevertheless, the total expenditure for lipid-lowering drugs have steadily increased throughout South Korea. The present study explores the factors that have influenced the increased expenditures of lipid-lowering drugs with a particular focus on the effects of statins in this process.MethodsThis paper investigates the National Health Insurance claims data for prescribed lipid-lowering drugs collected between January 1, 2005 and December 31, 2009. We specifically focused on statins and assessed the yearly variation of statin expenditure by calculating the increased rate of paired pharmaceutical expenditures over a 2 year period. Our study classified statins into three categories: new entrants, core medicines and exiting medicines. For core medicines, we further examined influencing factors such as price, amount of drugs consumed by volume, and prescription changes (substitutes for other drug).ResultsStatin expenditure showed an average annual increase of 25.7% between 2005 and 2009. Among the different statins, the expenditure of atorvastatin showed a 36.6% annual increase rate, which was the most dramatic among all statins. Also we divided expenditure for core medicines by the price factor, volume factor, and prescription change. The result showed that annual weighted average prices of individual drug decreased each year, which clearly showed that price influenced statin expenditure in a negative direction. The use of generic drugs containing the same active ingredient as name-brand drugs increased and negatively affected statin expenditure (Generic Mix effect). However, the use of relatively expensive ingredients within statin increase, Ingredient Mix effect contributed to increased statin expenditure (Ingredient Mix effect). In particular, the volume effect was found to be critical for increasing statin expenditure as the amount of statin consumed increased steadily throughout the study period.ConclusionsThe recent rapid increase in statin expenditure can largely be attributed to an increase in consumption volume. In order to check drug expenditures effectively in our current situation, in which chronic diseases remain steadily on the rise, it is necessary to not only have supply-side initiatives such as price reduction, but also demand-side initiatives that could control drug consumption volume, for example: educational programs for rational prescription, generic drug promotional policies, and policies providing prescription targets.

Do newly marketed generic medicines expand markets using descriptive time series analysis and mixed logit models? Korea as an exemplar and its implications

“…Patients were subsequently stratified by presence of statin claims (previously treated group) or absence of a statin claim (newly treated group) in the pre-index period to analyze the cohorts separately. It was hypothesized that there could potentially be differences in behavior between these two groups, based on the previous use of statins and previous publications [ 22 , 24 ]. Patients where the interval from the last claim in the pre-index period to the first claim in the index period was more than 200 days (average interval = 525.25 ± 230.97 days), were considered as newly treated.…”

“…Kwon et al [ 22 ] identified that the market expansion of antihyperlipidemic medicines in recent years was mainly attributed to the increase in the number of patients prescribed atorvastatin following patent expiration. Other studies also demonstrated that the quantity of statins prescribed significantly increased in Korea following patent expiration, especially atorvastatin [ 23 , 24 ]. When faced with such findings indicating that the introduction of less costly generics contributes to increasing drug spending in Korea, and potentially other countries, by inducing market expansion instead of bringing about expected cost savings, further studies are needed to identify which factors contribute to market expansion to guide future policies in these countries.…”

Factors Contributing to Increases in Prescription Drug Expenditures Borne by National Health Insurance in South Korea

“…Nevertheless, the increase in drug expenditure was caused not only by price but also by various factors, such as volume of drug use and drug-mix. 10 12 13 14 15 16 17 Thus, it is questionable whether this increase can be controlled using only overall drug price reductions. This study explored mechanisms that led to increasing drug expenditure over the past 4 years and estimated the contribution rate of each factor to this increase.…”

Addressing the challenge of high-priced prescription drugs in the era of precision medicine: A systematic review of drug life cycles, therapeutic drug markets and regulatory frameworks

“…[ 133 ; 163 ; 164 ] Programs that provide financial incentives for prescribers to save on costs incentivize physicians to be cognizant of drug prices and have the potential to reduce pharmaceutical expenditure gradually and permanently, by either rewarding when expenses are low or enforcing penalties when expenses exceed indicative or earlier budgets. [ 34 ; 49 ; 165 ] After the implementation of such programs, doctors are more inclined to believe that medical costs are a relevant consideration in drug usage[ 166 ].…”

“…This means that regulation can either aim to lower drug prices, or reduce usage. [ 34 ; 49 ; 50 ] On the one hand, there is a growing life expectancy (and aging population worldwide), while there are increasing medical options for disease control. [ 51 ; 52 ] Therefore, following drug innovation expectations and usage growth statistics, it is likely that costs will continue to rise.…”