Pharmacoeconomic guidelines and their implementation in the positive list system in South Korea

Abstract

This article reviews the change in the reimbursement and pricing system in South Korea, which was the precursor to the eventual implementation of evidence-based decision-making. There has been pressure on Korea's National Health Insurance system to control its skyrocketing expenditures on drugs. As a result, a series of cost-containment policies have been implemented. The idea of economic evidence-based decision-making was first introduced in Korea in 2001 when the government announced cost-effectiveness as one of the criteria for reimbursement decisions. After this announcement, the Health Insurance Review and Assessment Service (HIRA) developed guidelines, which became the standard for economic evaluations. In 2006, the drug listing system for reimbursement was changed from a negative to a positive system under the drug expenditure rationalization plan. Under this new system, only drugs that are proven economically and clinically valuable can be listed, and applicants have to submit economic evaluation studies to support the cost-effectiveness of their drugs. Once new applications are submitted, HIRA reviews them, and the Drug Reimbursement Evaluation Committee (DREC) decides whether or not to recommend the submitted drugs. In its reimbursement decisions, the DREC considers not only cost-effectiveness but also the availability of therapeutic alternatives, the severity of the condition treated, and the impact on the budget, among other measures. After the introduction of the positive list system, 56% of drugs were determined to be appropriate for reimbursement by the DREC. Despite limited human resources, experience, and quality local data, Korea is continuing to make efforts to establish a system of evidence-based decision-making. © 2009, International Society for Pharmacoeconomics and Outcomes Research (ISPOR).