Price Reduction of Anticancer Drugs from 2007 to 2019 in South Korea: The Impact of Pharmaceutical Cost-Containment Policies

Sun-Hong Kwon, Hea-Sun Park, Young-Jin Na, Chul Park, Ju-Young Shin and Hye-Lin Kim ()
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Sun-Hong Kwon: Sungkyunkwan University
Hea-Sun Park: Sungkyunkwan University
Young-Jin Na: Sungkyunkwan University
Chul Park: Sungkyunkwan University
Ju-Young Shin: Sungkyunkwan University
Hye-Lin Kim: Sahmyook University

Applied Health Economics and Health Policy, 2021, vol. 19, issue 3, No 12, 439-450

Abstract: Abstract Objectives To assess price reductions of anticancer drugs in South Korea over 12 years and analyze the association between price reduction, drug characteristics, and repricing mechanisms. Methods We constructed a dataset based on the Health Insurance Review and Assessment Service (HIRA) price log of anticancer drugs from January 2007 to June 2019. We investigated each mechanism that resulted in a price reduction, including actual transaction price (ATP), voluntary reduction by a manufacturer, price-volume agreement, expansion of indication or reimbursement scope, price cut at generic entry, lump price cut in April 2012, and re-evaluation. The price reduction rate per year was estimated by dividing the total number of price reduction events by the total period for which the products were on the market. A Poisson regression model was used to estimate the characteristics-adjusted incidence rate ratio of the price reduction. Price reduction per event was also determined across originator and generic products. Data analysis was performed using R (version 3.5.1). Results Five hundred price reductions occurred in 439 new anticancer drugs, with a reduction rate per 100 product-years of 23. ATP was the most frequent cause (39.2%) but had minimal impact (average reduction per event of 3%), followed by lump price cut (19.2%) and voluntary reduction (10.2%). Generic entries and lump price cut had the greatest impact (16–29% reduction per event). ATP was the most frequently occurring mechanism, followed by generic entry, voluntary reduction, and the lump price-cut in April 2012. Conclusions The incidence of price reduction of anticancer drugs increased gradually due to various repricing mechanisms. Although these mechanisms are effective, improvements can be made. Well-designed mechanisms that actively regulate price adjustment are needed to establish repricing policies that adequately reflect changes in the value of drugs over their entire life cycle.

Date: 2021
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DOI: 10.1007/s40258-020-00604-6

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