Policy alternatives of drug cost containment in health insurance

ABSTRACT

Currently, the drug pricing and reimbursement schemes in the Korean Medical Insurance System are based on a purchasing price reimbursement system. Since the pharmaceutical pricing is not stable and is continuously increasing, a need has developed for an analysis of the reason for the increase in pharmaceutical pricing and appropriate management measures. Consequently, a policy for the optimization of pharmaceutical expenditures in the Korean National Health Insurance (KNHI) System was introduced in 2006. In this policy, conversion to positive list system, price-volume agreements, and intensification of postmanagement of drug costs were newly introduced. In Korea, there are difficulties in smooth decisionmaking between the insured and the pharmaceutical companies in the process of determining the reimbursed price. When a proper agreement on the drug price is not made, the expenses of drug could incentive rapidly. This study was focused on the process of change in the policy of drug pricing and reimbursement in KNHI system to analyze its significance and study appropriate measures for drug reimbursement decision-making. The data for this study was collected mainly from announcement data of international and domestic agencies, related groups, and experts, along with data on the current situation regarding purchase of drugs, yearly status data, and statistical data for drugs. In Korea, the positive list system for the insured decides whether or not the national insurance will provide reimburse. Thus, it affects the demand determination through a large impact on the burden on the patients themselves. Principly the price of drug determined by the patient as a direct demander. The KNHI could be a agency for patient. The KNHI should find-out the proper purchasing method. Thus, this study proposes principles for drug pricing and reimbursement by inducing price competition according to market principles in Korea's health insurance determination.