Pharmaceutical Reform In South Korea And The Lessons It Provides

Abstract

Through implementation of its 2000 pharmaceutical reform, the South Korean government expected to reduce the cost of medications and improve service levels, medical appropriateness of care, and drug effectiveness. However, despite the reform's lofty goals, unintended consequences have distorted the supply of medical services and spending. These consequences have included increasing the use of uninsured services, prescribing high-price drugs, and a growing market share for multinational drug companies. Further reforms are needed to reduce the measure's adverse effects. This paper examines the Korean mandatory prescription system and offers an analysis of Korea's reforms.

Generic substitution, financial interests, and imperfect agency

“…At that time, both drug dispensing by physicians and drug prescribing by independent pharmacists were outlawed. Descriptive statistics presented by Kim and Ruger (2008) indicate a marked increase in the market share of high-price drugs in the year following the reform. However, the longer-term effects of the reform could not be assessed on the basis of their data.…”

Active pharmaceutical management strategies of health insurance systems to improve cost-effective use of medicines in low- and middle-income countries: A systematic review of current evidence

“…In South Korea, an SPD reform banned medical institutions from employing pharmacists or having onsite pharmacies, and prohibited pharmacies from providing medicines to patients without a physician prescription [46]. To ensure political support, pharmacy and physician fees were raised sharply as part of the reform [82,83]. The policy led to a decrease in prescribed medicines [46,83,84].…”

Health-Care Reform in Korea

“…Unfair and illegal marketing by pharmaceutical manufacturers and wholesalers, such as price collusion and rebates, was rampant. The 450 domestic pharmaceutical firms, of which two-thirds had less than 100 employees, survived by producing copy drugs and selling them at a discount to physicians (Kwon and Reich, 2005 (Jeong, 2009) (Kim and Ruger, 2008). While there is no direct income gain to physicians from the sale of drugs, the shift to higher-priced drugs may reflect higher illegal rebates from the makers of high-priced drugs.…”