Assessment of Financial Impact of Expanding the Scope of Drug Usage in South Korea

Articles in Press

Document Type : Original Article

Authors

1 College of Pharmacy, Kangwon National University, Chuncheon, Republic of Korea

2 Department of Health Administration, College of Nursing and Health, Kongju National University, Kongju, Republic of Korea

3 Department of Drug Management, National Health Insurance Service, Wonju, Republic of Korea

4 College of Pharmacy, Seoul National University, Seoul, Republic of Korea

5 Department of Statistics, Kyungpook National University, Daegu, Republic of Korea

6 College of Pharmacy, Yonsei Institute of Pharmaceutical Sciences, Yonsei University, Incheon, Republic of Korea

Abstract

Background 
The increasing utilization of high-cost drugs with multiple indications poses significant financial challenges to healthcare systems worldwide. This study evaluates the financial impact of expanding drug indications in Korea, focusing on pharmaceutical expenditure trend.
 
Methods 
This study analyzed claims data from the National Health Insurance Service (NHIS) to examine drug characteristics and annual expenditure. Interrupted time-series analysis assessed monthly expenditure changes following indication expansions.
 
Results 
We analyzed 57 drugs that expanded their indications between 2012 and 2023. From 2012 to 2022, drug expenditures increased 15-fold (compound annual growth rate [CAGR] 30.8%), a significantly larger rise compared to the 1.9-fold rise (CAGR 6.5%) in total pharmaceutical expenditures covered by the NHIS. Notably, expenditures increased 35-fold for 35 drugs classified under anatomical therapeutic chemical (ATC) code L (antineoplastic and immunomodulating agents) and 375-fold for 26 drugs with risk-sharing agreements (RSAs). Interrupted time-series analysis (n = 27) demonstrated significant monthly expenditure increases before expansion (US$ 0.33 million per month, P = .000). There were significant increases in expenditure between the pre- and post-expansion period (US$ 4.99–5.64 million, P = .000). Moreover, post-expansion trends showed significant additional increases in expenditure: US$ 0.13 million per month (P = .003) at +24 months and US$ 0.07 million per month (P = .037) at +36 months.
 
Conclusion 
Despite price reduction strategies for multi-indication drugs, expenditure accelerated increase in expenditure post-expansion of indication. This highlights the need for robust post-pricing management for listed drugs. In the long term, a total budget system could ensure predictable and sustainable financing by providing clear financial boundaries within the health insurance budget. 

Keywords

References

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International Journal of Health Policy and Management

Articles in Press, Corrected Proof
Available Online from 01 June 2025

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History

  • Received Date: 19 September 2024
  • Revised Date: 11 May 2025
  • Accepted Date: 31 May 2025
  • First Published Date: 01 June 2025

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