Evaluation on the first 2 years of the positive list system in South Korea

New drug accessibility and budgetary impact in South Korea: policy challenges and implications

BACKGROUND

To compare the accessibility indicators for new drugs in South Korea with those in the United States, Europe, and Japan, and examine the structure of pharmaceutical expenditures in South Korea.

RESEARCH DESIGN AND METHODS

Patient accessibility and budget impacts of new drugs were analyzed using two independent datasets. Accessibility was evaluated for 171 drugs approved between 2013 and 2022 based on reimbursement rates, time to listing post-approval, and international comparisons. Budget impact analysis covered 226 new drugs listed from 2012 to 2021, assessing expenditure patterns with an emphasis on risk-sharing agreements and financial implications for the National Health Insurance budget.

RESULTS

Among the 171 new drugs approved between 2013 and 2022, 67.8% were reimbursed as of 1 January 2024. Approval-to-reimbursement timelines varied by drug type and pricing pathway, with drugs listed via the weighted average price pathway receiving faster reimbursement than those evaluated through pharmacoeconomic evaluation. Between 2012 and 2021, new drugs constituted 8.5% of total pharmaceutical expenditures, with oncology drugs incurring the highest annual expenditure per product. Expenditure on new drugs peaked in 2019 but declined thereafter.

CONCLUSIONS

While South Korea has effectively controlled pharmaceutical expenditures, allocations for new drugs remain low compared to other major countries.

Public value judgments about the criteria for reimbursement of medicines in South Korea

OBJECTIVES

This study quantified the public value (PV) of the criteria and sub-criteria in the current drug reimbursement systems in South Korea and examined sociodemographic factors that associated with PV.

METHODS

The Analytic Hierarchy Process (AHP) was used to quantify the PVs of criteria and sub-criteria. We developed a questionnaire to generate pairwise comparison matrices among criteria and sub-criteria. From 27 March to 1 April 2023, we recruited 1,000 study participants using a quota sampling method stratified by age, sex, and region based on Korean census data.

RESULTS

The PVs for the criteria were highest for clinical usefulness (28.5%), followed by cost-effectiveness (27.1%), budget impact (24.3%), and reimbursement in other countries (20.1%). The sociodemographic characteristics of the participants had a significant impact on the PVs of the criteria. Willingness to pay additional premiums for national health insurance was negatively associated with PV for clinical usefulness and cost-effectiveness and positively associated with PV for reimbursement in other countries.

CONCLUSIONS

The public prioritized clinical usefulness and cost-effectiveness as the main criteria. However, the PVs of the criteria were divergent and associated with sociodemographic factors. Divergent public interests require an evidence-informed deliberative process for reimbursement decisions.

Variables affecting new drug prices in South Korea's pricing system

Objective: The price of pharmaceuticals is important from the economic and industrial perspectives but as well as patients' access to treatment. This study aimed to analyze the variables affecting the prices of new drugs in South Korea's pricing system. Methods: Data on 192 new drugs listed in South Korea from 2012 to 2022 were collected from the official website of the Health Insurance Review and Assessment Service. The independent variables included drugs for severe diseases, alternatives, number of patients, number of advanced 7 countries listed, budget impact, and listing period. The dependent variables included annual treatment cost and the price ratio to the advanced 7 country's average adjusted price. Descriptive statistics of variables, linear correlations between quantitative independent and dependent variables, and associations between independent and dependent variables were analyzed. Results: The mean annual treatment cost and price ratio to the advanced 7 country's average adjusted price were higher for drugs for severe diseases and those with no alternatives. Annual treatment cost and price ratio to the advanced 7 country's average adjusted price were negatively correlated with the number of patients and positively correlated with the number of advanced 7 countries listed. Annual treatment cost was affected by the variables drugs for severe diseases, alternatives, number of patients, number of advanced 7 countries listed, and budget impact. The price ratio to the advanced 7 country's average adjusted price was affected by drugs for severe diseases, alternatives, and the number of patients. Conclusion: This study revealed the effect of different variables on the prices of new drugs in South Korea, allowing for the development of a more effective assessment system to evaluate the prices of new drugs while ensuring profitability for pharmaceutical companies, sustainability of public insurance, and accessibility to drugs by patients.

The application of multi-criteria decision analysis in evaluating the value of drug-oriented intervention: a literature review

Objectives: Multi-Criteria Decision Analysis (MCDA) has gained increasing attention in supporting drug risk-benefit assessment, pricing and reimbursement, as well as optimization of clinical interventions. The objective of this study was to systematically collect and categorize evaluation criteria and techniques of weighting and scoring of MCDA for drug value assessment. Methods: A systematic review of the literature was conducted across seven databases to identify articles utilizing the MCDA frameworks for the evaluation of drug value. Evaluation criteria mentioned in the included studies were extracted and assigned to 5 dimensions including clinical, economic, innovative, societal and humanistic value. A descriptive statistical analysis was performed on the identified drug value evaluation criteria, as well as the weighting and scoring techniques employed. The more a criterion or technique were mentioned in articles, the more important we consider it. Results: Out of the 82 articles included, 111 unique criteria were identified to evaluate the value of drug. Among the 56 unique criteria (448 times) used to measure clinical value, the most frequently mentioned were "comparative safety/tolerability" (58 times), "comparative effectiveness/efficacy" (56 times), "comparative patient-perceived health/patient reported outcomes" (37 times), "disease severity" (34 times), and "unmet needs" (25 times). Regarding economic value measurement, out of the 20 unique criteria (124 times), the most frequently utilized criteria were "cost of intervention" (17 times), "comparative other medical costs" (16 times), and "comparative non-medical costs" (18 times). Out of the 10 criteria (18 times) for assessing innovative value, "a novel pharmacological mechanism" was the most frequently mentioned criterion (5 times). Among the 22 criteria (73 times) used to measure societal value, "system capacity and appropriate use of intervention" was the most frequently cited criterion (14 times). Out of the 3 criteria (15 times) utilized to measure humanistic value, "political/historical/cultural context" was the most frequently mentioned criterion (9 times). Furthermore, 11 scoring and 11 weighting techniques were found from various MCDA frameworks. "Swing weighting" and "a direct rating scale" were the most frequently used techniques in included articles. Conclusion: This study comprehensively presented the current evaluation dimensions, criteria, and techniques for scoring and weighting in drug-oriented MCDA articles. By highlighting the frequently cited evaluation criteria and techniques for scoring and weighting, this analysis will provide a foundation to reasonably select appropriate evaluation criteria and technique in constructing the MCDA framework that aligns with research objectives.

An Industry Survey on Unmet Needs in South Korea's New Drug Listing System

INTRODUCTION

Since introducing the positive listing system in 2007, the South Korean government has undergone multiple changes in its drug listing system. As there is a lack of studies that evaluate the system from an industry perspective, this paper examined South Korea's new drug listing system from the suppliers' perspective.

METHODS

We surveyed members of the three main pharmaceutical industry associations online. The survey (a 5-point Likert scale) covered their satisfactory levels, demands, and updates on the current new drug listing system, especially pharmacoeconomic evaluation, pharmacoeconomic evaluation exemption, and risk-sharing agreement.

RESULTS

A total of 56 respondents participated in the survey. The self-reported satisfaction level for value recognition of new drugs was 1.6 (± 0.7) points (5 points = very satisfied). The most highly demanded reforms for PE, RSA, and PEE were incremental cost-effectiveness ratio threshold (92.9%), reimbursement scope expansion (91.1%), and eligible disease (83.9%). Lastly, they also claimed that the indication-based pricing system must be introduced (83.9%).

CONCLUSIONS

Pricing and reimbursement policies need to improve in such a way that would enable better access to new drugs while still facilitating their development. Given the nature of the current system, some innovative rare disease treatments and anticancer drugs remain unreimbursed, resulting in low satisfaction levels across the pharmaceutical industry. Hence, pathways to speed up the reimbursement assessment process and expand the range of reimbursable diseases are required. Pharmaceutical companies are also important stakeholders, like in the case of clinicians and patients, and their opinions should also be considered in the process of pricing and reimbursement policy reforms.

A Review of Utility Measurement Methods Used in Pharmacoeconomic Submissions to HIRA in South Korea: Methodological Consistency and Areas for Improvement

Pharmacoeconomic (PE) guidelines, first published in 2006 and later updated in 2011, were developed to guide the preparation and submission of PE data to the Health Insurance Review and Assessment Service (HIRA) for drug reimbursement decision making in South Korea. This study, which was conducted as part of a project for revision of the PE guideline, reviewed utility values used in the PE submissions processed at HIRA during 2014-2018 to identify aspects of the current guidelines that may need to be revisited. A total of 50 PE submissions were processed at HIRA over the 5 years. Of these, 47 submissions that used quality-adjusted life-years as an outcome measure were included in this review. Data were extracted from full copies of the manufacturer's initial submissions and committee documents provided by HIRA. Of the 47 submissions, nearly half (n = 23, 48.9%) used published sources to obtain health state utility values, followed by direct methods using time trade-off (n = 7) or standard gamble (n = 2) and indirect methods with patient-level data using the EQ-5D-3L (n = 4) or the EQ-5D-5L (n = 2). Mapping, using the EQ-5D-3L as a target measure, was also adopted in six submissions, although it was somewhat unfavourably described in the guideline. Notably, 52.2% of the submissions with published sources took utility values from different sources for different health states defined in a single model. In addition, details of utility measurement methods or mapping functions taken from published sources were relatively poorly reported. Moreover, the preferences of the Korean general public, preferred by the guideline, were rarely reflected in the utility values used in submissions relying on published sources (95.7% for foreign values only/mixed) and mapping (66.7%). While most submissions with direct and indirect methods used domestic preference values, the former was occasionally criticised by assessment committees because of health state descriptions. This review highlights a considerable amount of inconsistency in the measurement of utility values used in the PE submissions during 2014-2018, indicating a strong need for methodological standardisation.

Manufacturers’ perceptions of the decision-making process for new drug reimbursement in South Korea

This study aimed to evaluate manufacturers’ perceptions of the decision-making process for new drug reimbursement and to formulate implications in operating a health technology assessment system. In 2019, we conducted a questionnaire survey and a semistructured group interview for domestic (n = 6) and foreign manufacturers (n = 9) who had vast experience in introducing new medicines into the market through a health technology assessment. Representatives of manufacturers indicated that disease severity, budget impact, existence of alternative treatment, and health-related quality of life were relevant criteria when assessing reimbursement decisions. Compared with domestic manufacturers, foreign manufacturers were risk takers when making reimbursement decisions in terms of adopting a new drug and managing pharmaceutical expenditure. However, foreign manufacturers were risk-averse when evaluating new drugs with uncertainties based on real-world data such as clinical effectiveness. Based on manufacturers’ perceptions of the decision-making process for new drug reimbursement, there is room for improvement in health technology assessment systems. Explaining the underlying reasons behind their decisions, unbiased participation by various stakeholders and their embedded roles in the decision-making process need to be emphasized. However, the measures suggested in this study should be introduced with cautions. The process of health technology assessment might be a target for those who undermine the system in pursuit of their private interests.

Pricing and Reimbursement Pathways of New Orphan Drugs in South Korea: A Longitudinal Comparison

This study aimed to analyze four current pathways affecting the listing and post-listing prices of new orphan drugs (ODs) in South Korea. These mechanisms were: (1) essential OD, (2) pharmacoeconomic evaluation (PE) waiver OD, (3) weighted average price OD, and (4) PE OD. We analyzed the ratio of the listing price of 48 new ODs to the average adjusted price (AAP) of seven advanced countries and examined the change in the post-listing price. Descriptive statistics were used to analyze the listing and post-listing price changes. The mean and median ratios of the listing price of total new OD to AAP were calculated to be 69.4% and 65.4%, respectively. Essential OD showed the highest mean (93.8%) and median (80.8%) ratios. The mean cumulative price discount rate of the new OD was 7.2% in the third year and 5.7% in the fifth year. The rarity of diseases impacts the listing price of OD, but the political effects of the benefits of OD on the post-listing price of these drugs could not be verified. Further research should be conducted to develop measures that facilitate the practical sharing of budget risks and increase patient access to new ODs.

Trends in the pricing and reimbursement of new anticancer drugs in South Korea: an analysis of listed anticancer drugs during the past three years

Objective: This study aimed to examine patient accessibility to new anticancer drugs including reimbursement coverage, time to listing, and listing price during the recent 3 years after the introduction of alternative pricing and reimbursement pathways in South Korea.Methods: Anticancer drugs were selected for analysis from the new drugs reviewed from January 2017 to March 2020. Descriptive statistics were used to present the levels of the listing prices. Pearson's correlation analysis was used to analyze the relationship between the list price in comparison to the External Reference Price(ERP) and the time to listing.Results: Thirty-two anticancer drugs were included in analysis. The average time to listing for these drugs was 36.7 months. The ratio of the listing price in comparison with Average Adjusted Price from seven reference countries was from 12.6% to 90.2%. Pearson's correlation coefficient for the correlation between the ratio of the listing price to the ERP and the time to listing was -0.37 and was statistically significant (p = 0.035).Conclusions: Policies that relate to the scope of reimbursement, time to reimbursement, and list price should be able to equally reflect patient accessibility and national health insurance finances, as well as the impact on industry as a whole.

Are Recently Evaluated Drugs More Likely to Receive Positive Reimbursement Recommendations in South Korea? 11-year Experience of the South Korean Positive List System

PURPOSE

The South Korean government in 2014 introduced various policies to enhance accessibility of pharmaceuticals. This study sought to examine whether positive reimbursement recommendations of pharmaceuticals have increased since 2014.

METHODS

Industry submissions evaluated from January 2007 to December 2018 were identified, and characteristics relevant to reimbursement recommendations were extracted. Logistic regression analyses with robust SEs were used to quantify the likelihood of positive recommendations for pharmaceuticals, after controlling for relevant factors influencing the recommendations.

FINDINGS

During the study period, 355 (72.9%) of 487 submissions were positively recommended; the drugs evaluated after 2014 (77.8%) were significantly more likely to receive positive reimbursement recommendations than the drugs evaluated before 2014 (69.5%). In the multivariable logistic regression analysis, several factors (labeled a noncancer drug, priced less than alternatives, considered clinically superior, and having budget impact >10 billion South Korean won) were significantly associated with positive recommendations (P < 0.05). When considering interaction effects between evaluation year and other variables, only the interaction between comparative clinical benefit and evaluation year was significant. Specifically, clinically noninferior drugs evaluated after 2014 had 2.85 times the odds of receiving positive recommendations compared with the clinically noninferior drugs evaluated earlier.

IMPLICATIONS

Recently evaluated drugs are more likely to receive positive reimbursement recommendations, especially those drugs whose comparative clinical benefits are noninferior.

Reimbursement and pricing of regenerative medicine in South Korea: key factors for achieving reimbursement

In the South Korean health technology assessment system, prices of alternative medicines, incremental cost-effectiveness ratios in pharmaco-economic evaluations and patient access improvement systems such as risk-sharing agreements are the most important factors concerning the reimbursement of regenerative medicine (RM). Research and development companies in RM should review the key features of these medicines throughout the product development cycle to increase the probability of successful reimbursement. In addition, the South Korean government should take steps to improve the system to reflect the unique characteristics and value of RM in the reimbursement and pricing policy, to revitalize research and development, and increase patient access.

The current state of patient access to new drugs in South Korea under the positive list system: evaluation of the changes since the new review pathways

Objective: This study aims to provide an up-to-date analysis of the current state of patient access to new drugs in South Korea, focusing on the effect of new review pathways for reimbursement. Methods: We analyzed patients' access to new drugs, listing rate and lead time until listing from marketing authorization. New pathways were defined as 'price negotiation waiver,' 'risk-sharing agreements,' and 'pharmacoeconomic evaluation exemption.' Results: The listing rate for drugs increased after the introduction of the new pathways (93.7% vs. 77.9%, p < 0.001). Before the new pathways, the median lead time for listing was 21.0 months (95% CI: 16.9-25.0), while afterward it was shortened to 10.9 months (95% CI: 10.2-11.7) (p < 0.001). Conclusion: Although it has strengthened national health insurance coverage by positively impacting the rate and lead time, the lead time for the oncology and orphan drugs is substantially longer as compared to other drugs. Expanding the eligibility criteria to include non-life-threatening but rare or intractable diseases, and resolving the system's operational issues are still necessary.

Patient Accessibility and Budget Impact of Orphan Drugs in South Korea: Long-Term and Real-World Data Analysis (2007-2019)

This study aimed to identify orphan drug accessibility and impact on pharmaceutical budgets in South Korea by analyzing the status of orphan drug designation, approval, reimbursement, and pharmaceutical expenditure. We analyzed the dataset on orphan drugs designated, approved, and reimbursed from 2007 to 2019 based on long-term real-world data. The designated and approved orphan drugs were 165 and 156, respectively, and 88 out of 156 approved products were reimbursed. Total expenditure on orphan drugs increased annually to account for about 1.44% of total pharmaceutical expenditure in 2018. Orphan drug expenditure per patient increased on average by 8.7% per year. The average annual cost of orphan drugs was USD 27,000–USD 47,000, with the maximum value of USD 260,000–USD 560,000. As there are a number of orphan drugs that have not yet been reimbursable after approval, a reimbursement policy should be established that considers the characteristics of orphan drugs. Since the rapid increase in orphan drug expenditure can be a potential threat to the insurance budget, budget management should also be considered. In conclusion, it is necessary to take preemptive measures to manage the health insurance budget efficiently while improving patient accessibility to orphan drugs.

Government pharmaceutical pricing strategies in the Asia-Pacific region: an overview

Background and objectives: Governments in Asia Pacific (APAC) are increasingly using pharmaceutical pricing strategies to contain rising healthcare costs. The objective of this narrative review is to discuss formal pricing strategies for reimbursed prescription medication in APAC, supported by relevant examples of implementation differences across countries. In the discussion section, we examine key advantages and disadvantages of each strategy. Methods: A narrative review of the peer-reviewed and grey literature was undertaken to retrieve information, including strategy definitions, practising countries, country-specific implementation considerations, and merits and demerits of each strategy. Results: Seven strategies (Internal Reference Pricing, External Reference Pricing, Special Pricing Agreements, Pharmacoeconomic Evaluation, Cost plus pricing, Price Maintenance Premium, and Tendering and negotiations) were identified as most commonly practised in APAC through the review process. Most countries use multiple strategies that differ in how they are implemented. Conclusion: APAC countries use multiple strategies simultaneously with varying implementation methods, including different formulae and sub-types of medication that a strategy applies to, whether the strategy is a mandate or guideline, and the extent of negotiations and transparency. Strategies are instituted partly with the aim of cost containment, and may also promote price stability, innovation, and increased access in the short and longer term. Abbreviations: APAC - Asia Pacific; WHO - World Health Organisation; IRP - Internal Reference Pricing; ERP - External Reference Pricing; SPA - Special Pricing Agreement; MES - Managed Entry Scheme; PVA - Price-Volume Agreement; RSA - Risk Sharing Agreement; NHIS - National Health Insurance System; PE - Pharmacoeconomic Evaluation; CEA - Cost-Effectiveness Analysis; QALY - Quality-adjusted Life Year; BIA - Budget Impact Analysis; PMP - Price Maintenance Premium; R&D - Research & Development.

Do cost containment policies save money and influence physicians' prescribing behavior? Lessons from South Korea's drug policy for diabetes medication

OBJECTIVE

We evaluate the effects of drug price reduction policy on pharmaceutical expenditure and prescription patterns in diabetes medication.

DESIGN

An interrupted time series study design using generalized estimating equations.

SETTING

This study used National Health Insurance claim data from 2010 to 2013.

PARTICIPANTS

A total of 68 127 diabetes patients and 12 465 hospitals.

INTERVENTION(S)

The drug price reduction policy.

MAIN OUTCOME MEASURES

The primary outcome is pharmaceutical expenditure and prescription rate. To evaluate changes in prescription rate, we measured prescription rates such a brand-name drug and drug price reduction rate.

RESULTS

Although the drug price reduction policy associated with decreased pharmaceutical expenditure (-13.22%, P < 0.0001), the trend (-0.01%, P = 0.9201) did not change significantly compared with the pre-intervention period. In addition, the trends in the monthly prescription rate of brand-name drugs decreased (-0.14%, P = 0.0091), while the immediate change was an increase (5.72%, P < 0.0001). Regardless of the drug reduction rate, the prescription rate after the introduction of the drug price reduction policy decreased compared with the pre-intervention period, and this decline was significant for reduction rates of 0% (-2.74%, P < 0.0001) and 10% (-0.13%, P = 0.0018).

CONCLUSIONS

Our results provide evidence of the effects of the drug price reduction policy on pharmaceutical expenditure and prescription patterns. This policy did not affect the prescribing behavior of healthcare providers and did not increase the use of drugs not subject to this policy. Although this study did not observe changes in the cost of pharmaceuticals after the introduction of the drug price reduction policy, further research is needed on the long-term changes in such costs.

Changes in prescription pattern, pharmaceutical expenditure and quality of care after introduction of reimbursement restriction in diabetes in Korea

Background

To ensure effective prescription practices and reduce diabetes-related pharmaceutical expenditures, Korea adopted a clinical practice guideline for the reimbursement system. Health care providers cannot receive reimbursement from National Health Insurance(NHI) unless it is for an appropriate prescription under the predefined clinical condition. The aim of this study was to evaluate prescription patterns in oral hypoglycemic agents, costs and effects on patient care since the introduction of the diabetes reimbursement restriction.

Methods

We used claim data from 2008 to 2013, which included 26 315 diabetes patients and 9907 hospitals. An interrupted time series study design using generalized estimating equations was used to evaluate changes in patterns of single and combination therapy, brand name drug prescriptions, cost and hospital admission following the reimbursement restriction.

Results

Following reimbursement restriction initiation, we found a statistically significant decrease in the average prescription rate of brand name drugs (-6.2%), whereas single therapy prescription increased (9.9%). There was also a reduction in trend change in the monthly prescription rate for combination therapy (-1.7%) and brand name drugs (-0.8%). For single therapy, the trend change in prescription rate increased after the intervention (0.8%). A reduction of trend change in pharmaceutical costs (-0.3%) was observed. However, we did not find a significant change in hospital admission for diabetes.

Conclusions

Reimbursement restriction affects both pharmaceutical costs and physicians' decisions to prescribe oral hypoglycemic agents. We did not observe a significant reduction in quality of care following the intervention. Collectively, these findings indicate that reimbursement restriction has improved effective drug utilization and decreased health expenditures.

Role of economic evidence in coverage decision-making in South Korea

OBJECTIVES

The South Korean government required the submission of economic evidence when it implemented the Positive-List System in December 2006. This study investigates the key factors that influenced actual public insurance reimbursement decisions, including the role of economic evidence, after 10 years of decision practice under compulsory health technology assessment (HTA) for new drugs.

METHOD

Logistic regression analysis was used to estimate the impact of the variables involved, including cost-effectiveness ratio as a key variable, on reimbursement decisions. The latter were defined as "yes" or "no" at a submitted price and indication. Only cases (n = 91) that present a cost-effectiveness ratio, and that have been reviewed based on this ratio from January 2007 to December 2016, were included in the analysis.

RESULTS

Cases with higher cost-effectiveness ratios were less likely to be accepted. In addition, drugs that were used to treat severe diseases and drugs with no substitute were more likely to be recommended. The probability of acceptance declined along with the level of uncertainty in the submitted evidence. The acceptance rate for severe-disease drugs has increased since 2013, when the government introduced several policies that lowered the existing barriers to positive reimbursement. However, such an increase was not statistically significant.

CONCLUSIONS

Cost-effectiveness is one of the most influential factors in drug-reimbursement decisions. However, inclusion of other explanatory variables, in addition to the cost-effectiveness ratio, predicted the results of decisions more accurately.

Revealed and Stated Preferences of Decision Makers for Priority Setting in Health Technology Assessment: A Systematic Review

BACKGROUND

There is much interest from stakeholders in understanding how health technology assessment (HTA) committees make national funding decisions for health technologies. A growing literature has analysed past decisions by committees (revealed preference, RP studies) and hypothetical decisions by committee members (stated preference, SP studies) to identify factors influencing decisions and assess their importance.

OBJECTIVES

A systematic review of the literature was undertaken to provide insight into committee preferences for these factors (after controlling for other factors) and the methods used to elicit them.

METHODS

Ovid Medline, Embase, Econlit and Web of Science were searched from inception to 11 May 2017. Included studies had to have investigated factors considered by HTA committees and to have conducted multivariate analysis to identify the effect of each factor on funding decisions. Factors were classified as being important based on statistical significance, and their impact on decisions was compared using marginal effects.

RESULTS

Twenty-three RP and four SP studies (containing 42 analyses) of 14 HTA committees met the inclusion criteria. Although factors were defined differently, the SP literature generally found clinical efficacy, cost-effectiveness and equity factors (such as disease severity) were each important to the Pharmaceutical Benefits Advisory Committee (PBAC), the National Institute for Health and Care Excellence (NICE) and the All Wales Medicines Strategy Group. These findings were supported by the RP studies of the PBAC, but not the other committees, which found funding decisions by these and other committees were mostly influenced by the acceptance of the clinical evidence and, where applicable, cost-effectiveness. Trust in the evidence was very important for decision makers, equivalent to reducing the incremental cost-effectiveness ratio (cost per quality-adjusted life-year) by A$38,000 (Australian dollars) for the PBAC and £15,000 for NICE.

CONCLUSIONS

This review found trust in the clinical evidence and, where applicable, cost-effectiveness were important for decision makers. Many methodological differences likely contributed to the diversity in some of the other findings across studies of the same committee. Further work is needed to better understand how competing factors are valued by different HTA committees.

Towards a Transparent, Credible, Evidence-Based Decision-Making Process of New Drug Listing on the Hong Kong Hospital Authority Drug Formulary: Challenges and Suggestions

The aim of this article is to describe the process, evaluation criteria, and possible outcomes of decision-making for new drugs listed in the Hong Kong Hospital Authority Drug Formulary in comparison to the health technology assessment (HTA) policy overseas. Details of decision-making processes including the new drug listing submission, Drug Advisory Committee (DAC) meeting, and procedures prior to and following the meeting, were extracted from the official Hong Kong Hospital Authority drug formulary management website and manual. Publicly-available information related to the new drug decision-making process for five HTA agencies [the National Institute of Health and Care Excellence (NICE), the Scottish Medicines Consortium (SMC), the Australia Pharmaceutical Benefits Advisory Committee (PBAC), the Canadian Agency for Drugs and Technologies in Health (CADTH), and the New Zealand Pharmaceutical Management Agency (PHARMAC)] were reviewed and retrieved from official documents from public domains. The DAC is in charge of systemically and critically appraising new drugs before they are listed on the formulary, reviewing submitted applications, and making the decision to list the drug based on scientific evidence to which safety, efficacy, and cost-effectiveness are the primary considerations. When compared with other HTA agencies, transparency of the decision-making process of the DAC, the relevance of clinical and health economic evidence, and the lack of health economic and methodological input of submissions are the major challenges to the new-drug listing policy in Hong Kong. Despite these challenges, this review provides suggestions for the establishment of a more transparent, credible, and evidence-based decision-making process in the Hong Kong Hospital Authority Drug Formulary. Proposals for improvement in the listing of new drugs in the formulary should be a priority of healthcare reforms.

Eliciting societal preferences of reimbursement decision criteria for anti cancer drugs in South Korea

INTRODUCTION

In order to look beyond the cost-effectiveness analysis, this study used a multi-criteria decision analysis (MCDA), which reflects societal values with regard to reimbursement decisions. This study aims to elicit societal preferences of the reimbursement decision criteria for anti cancer drugs from public and healthcare professionals.

METHODS

Eight criteria were defined based on a literature review and focus group sessions: disease severity, disease population size, pediatrics targets, unmet needs, innovation, clinical benefits, cost-effectiveness, and budget impacts. Using quota sampling and purposive sampling, 300 participants from the Korean public and 30 healthcare professionals were selected for the survey. Preferences were elicited using an analytic hierarchy process.

RESULTS

Both groups rated clinical benefits the highest, followed by cost-effectiveness and disease severity, but differed with regard to disease population size and unmet needs. Innovation was the least preferred criteria.

CONCLUSIONS

Clinical benefits and other social values should be reflected appropriately with cost-effectiveness in healthcare coverage. MCDA can be used to assess decision priorities for complicated health policy decisions, including reimbursement decisions. It is a promising method for making logical and transparent drug reimbursement decisions that consider a broad range of factors, which are perceived as important by relevant stakeholders.

National reimbursement listing determinants of new cancer drugs: a retrospective analysis of 58 cancer treatment appraisals in 2007-2016 in South Korea

BACKGROUND

Since the positive-list system was introduced, concerns have been raised over restricting access to new cancer drugs in Korea. Policy changes in the decision-making process, such as risk-sharing agreement and the waiver of pharmacoeconomic data submission, were implemented to improve access to oncology medicines, and other factors are also involved in the reimbursement for cancer drugs. The aim of this study is to investigate the reimbursement listing determinants of new cancer drugs in Korea.

METHODS

All cancer treatment appraisals of Health Insurance Review and Assessment during 2007-2016 were analyzed based on 13 independent variables (comparative effectiveness, cost-effectiveness, drug-price comparison, oncology-specific policy, and innovation such as new mode of action). Univariate and multivariate logistic analyses were conducted.

RESULTS

Of 58 analyzed submissions, 40% were listed in the national reimbursement formulary. In univariate analysis, four variables were related to listing: comparative effectiveness, drug-price comparison, new mode of action, and risk-sharing agreement. In multivariate logistic analysis, three variables significantly increased the likelihood of listing: clinical improvement, below alternative's price, and risk-sharing arrangement. Cancer drug's listing increased from 17% to 47% after risk-sharing agreement implementation.

CONCLUSION

Clinical improvement, cost-effectiveness, and RSA application are critical to successful national reimbursement listing.

Factors Contributing to Increases in Prescription Drug Expenditures Borne by National Health Insurance in South Korea

PURPOSE

Rapid growth of prescription drug expenditures is a problem in South Korea. The objective of this study was to assess the contributions of four variables (therapeutic choice, drug-mix, original use, and price changes) to increases in drug expenditures paid by the National Health Insurance (NHI) in Korea.

MATERIALS AND METHODS

A retrospective cohort study was conducted between January 1, 2008 and June 30, 2012 utilizing data from the NHI Claims Database of the Health Insurance Review and Assessment Service. The number of target drug types for final analysis was 13959. To analyze the growth rates of drug expenditures, this study used Fisher ideal index and the Laspeyres and Paasche indexes.

RESULTS

With the exception of 2012, therapeutic choice contributed to about 40-60% of the increase in drug expenditures every year, while drug-mix contributed to another 30-40%.

CONCLUSION

The rapid growth in prescription drug expenditure was found to be largely due to drug-mix and therapeutic choice over time. Original use had little impact on drug spending.

Eight-year experience of using HTA in drug reimbursement: South Korea

This study describes the process and results of drug reimbursement decision-making in South Korea and evaluates its performance from the perspectives of the various stakeholders involved. Data were retrieved from the evaluation report posted on the Health Insurance Review and Assessment Service (HIRA) website. As of 2014, 253 new drugs had been submitted to the HIRA for appraisal. Of these, 175 (69.2%) were recommended in favor of listing and 78 (30.8%) were rejected. Furthermore, 68 of these drugs were deemed clinically improved relative to existing drugs. For those drugs that did not demonstrate clinical superiority (which was most of them), a simple price comparison to the existing drug was utilized as a gate toward listing. On top of the base-line analysis, 104 stakeholders from the industry, academia, public office, and civic society responded to a questionnaire designed to obtain their opinions on the South Korean positive list system (PLS). Stakeholders agreed that the consistency of reimbursement decision-making has improved since 2007, while accessibility to new drugs has apparently decreased. Respondents also indicated a preference toward improved public access to decision-making information. This examination of reimbursement decisions in South Korea will illuminate critical issues for countries that are considering the introduction of similar policies.

Investigation of comparative effectiveness research in Asia, Europe, and North America

Comparative effectiveness research (CER) is an important branch of pharmacoeconomics that systematically studies and evaluates the cost-effectiveness of medical interventions. CER plays instrumental roles in guiding government public health policy programs and insurance. Countries throughout the world use different methods of CER to help make medical decisions based on providing optimal therapy at a reduced cost. Expenses to the healthcare system continue to rise, and CER is one-way in which expenses could be curbed in the future by applying cost-effectiveness evidence to clinical decisions. China, India, South Korea, and the United Kingdom are of essential focus because these country's economies and health care expenses continue to expand. The structures and use of CER are diverse throughout these countries, and each is of prime importance. By conducting this thorough comparison of CER in different nations, strategies and organizational setups from different countries can be applied to help guide public health and medical decision-making in order to continue to expand the establishment and role of CER programs. The patient-centered medical home has been created to help reduce costs in the primary care sector and to help improve the effectiveness of therapy. Barriers to CER are also important as many stakeholders need to be able to work together to provide the best CER evidence. The advancement of CER in multiple countries throughout the world provides a possible way of reducing costs to the healthcare system in an age of expanding expenses.

Key Components of Increased Drug Expenditure in South Korea: Implications for the Future

BACKGROUND

The cost of pharmaceuticals has increased rapidly in Korea in recent years. Expenditure is likely to grow further with the policy of expanding National Health Insurance coverage for the following four disease areas: cerebrovascular and cardiovascular disease, rare diseases, and cancer. Consequently, there is a need to analyze the different components leading to this increased expenditure as a basis for suggesting future reforms in Korea.

OBJECTIVE

To quantify the impact of new and established drugs on the growth of total drug spending in South Korea in recent years, specially focusing on the differentiated components of drug spending. These include treatment expansion and drug-mix effects (switching from cheaper drugs to expensive ones and vice versa).

METHODS

A model was proposed and used to assess the impact of both new and existing drugs on changes in price, quantity, and drug mix over the 5-year period in Korea from 2006 to 2010. The database used was the National Health Insurance claims data, which covers about 97% of the total population of Korea.

RESULTS

Overall drug spending increased 1.43-fold from 2006 to 2010. Drug-mix effect (ε_t = 1.32) was the main factor contributing to increased drug spending, followed by increased drug utilization (Q_t = 1.26). For existing drugs, treatment expansion (Q_I) and drug-mix effect (ε_I) were measured at 1.28 and 1.24, respectively, while those of new drugs were 1.02 (Q_N) and 1.03 (ε_N). Therefore, existing drugs have a much greater effect on drug spending than do new drugs. According to the Anatomical Therapeutic Classification, drug spending rose most significantly for the "sensory organs" class of drugs (E_t = 1.78) followed by the "various" class (E_t = 1.68). For existing drugs in the sensory organs class (S), drug-mix effect (ε_I) was measured at 0.96. This implies that expensive drugs among existing drugs were replaced by cheaper ones. However, the quantity prescribed (Q_I) substantially increased by 1.88-fold. New drugs within this class that were more expensive than existing ones were also prescribed (ε_N = 1.09), further increasing drug expenditure in Korea.

CONCLUSIONS

We found contrasting results from previous studies. The drug-mix effect and existing drugs made the largest contribution to drug spending growth rather than new drugs. Policies targeting drug mix, such as promoting cost-effective prescription and rational use of drugs, including the use of cheaper cost generics without compromising care, should be primarily considered to help contain future drug expenditure.

A systematic review of cost-sharing strategies used within publicly-funded drug plans in member countries of the organisation for economic co-operation and development

BACKGROUND

Publicly-funded drug plans vary in strategies used and policies employed to reduce continually increasing pharmaceutical expenditures. We systematically reviewed the utilization of cost-sharing strategies and physician-directed prescribing regulations in publicly-funded formularies within member nations of the Organization of Economic Cooperation and Development (OECD).

METHODS & FINDINGS

Using the OECD nations as the sampling frame, a search for cost-sharing strategies and physician-directed prescribing regulations was done using published and grey literature. Collected data was verified by a system expert within the prescription drug insurance plan in each country, to ensure the accuracy of key data elements across plans. Significant variation in the use of cost-sharing mechanisms was seen. Copayments were the most commonly used cost-containment measure, though their use and amount varied for those with certain conditions, most often chronic diseases (in 17 countries), and by socio-economic status (either income or employment status), or with age (in 15 countries). Caps and deductibles were only used by five systems. Drug cost-containment strategies targeting physicians were also identified in 24 countries, including guideline-based prescribing, prescription monitoring and incentive structures.

CONCLUSIONS

There was variable use of cost-containment strategies to limit pharmaceutical expenditures in publicly funded formularies within OECD countries. Further research is needed to determine the best approach to constrain costs while maintaining access to pharmaceutical drugs.

Effective policy initiatives to constrain lipid-lowering drug expenditure growth in South Korea

Background

The rapid growth of prescription drug expenditures is a major problem in South Korea. Accordingly, the South Korean government introduced a positive listing system in 2006. They also adopted various price reduction policies. Nevertheless, the total expenditure for lipid-lowering drugs have steadily increased throughout South Korea. The present study explores the factors that have influenced the increased expenditures of lipid-lowering drugs with a particular focus on the effects of statins in this process.

Methods

This paper investigates the National Health Insurance claims data for prescribed lipid-lowering drugs collected between January 1, 2005 and December 31, 2009. We specifically focused on statins and assessed the yearly variation of statin expenditure by calculating the increased rate of paired pharmaceutical expenditures over a 2 year period. Our study classified statins into three categories: new entrants, core medicines and exiting medicines. For core medicines, we further examined influencing factors such as price, amount of drugs consumed by volume, and prescription changes (substitutes for other drug).

Results

Statin expenditure showed an average annual increase of 25.7% between 2005 and 2009. Among the different statins, the expenditure of atorvastatin showed a 36.6% annual increase rate, which was the most dramatic among all statins. Also we divided expenditure for core medicines by the price factor, volume factor, and prescription change. The result showed that annual weighted average prices of individual drug decreased each year, which clearly showed that price influenced statin expenditure in a negative direction. The use of generic drugs containing the same active ingredient as name-brand drugs increased and negatively affected statin expenditure (Generic Mix effect). However, the use of relatively expensive ingredients within statin increase, Ingredient Mix effect contributed to increased statin expenditure (Ingredient Mix effect). In particular, the volume effect was found to be critical for increasing statin expenditure as the amount of statin consumed increased steadily throughout the study period.

Conclusions

The recent rapid increase in statin expenditure can largely be attributed to an increase in consumption volume. In order to check drug expenditures effectively in our current situation, in which chronic diseases remain steadily on the rise, it is necessary to not only have supply-side initiatives such as price reduction, but also demand-side initiatives that could control drug consumption volume, for example: educational programs for rational prescription, generic drug promotional policies, and policies providing prescription targets.

How the Trans Pacific Partnership Agreement could undermine PHARMAC and threaten access to affordable medicines and health equity in New Zealand

New Zealand's Pharmaceutical Management Agency (PHARMAC) has been highly successful in facilitating affordable access to medicines through a combination of aggressive price negotiations, innovative procurement mechanisms, and careful evaluation of value for money. Recently the US government, through the establishment of a series of bilateral and plurilateral "free" trade agreements, has attempted to constrain the pharmaceutical access programs of other countries in order to promote the interests of the pharmaceutical industry. The Trans Pacific Partnership Agreement (TPPA) represents the latest example; through the TPPA the US is seeking to eliminate therapeutic reference pricing, introduce appeals processes for pharmaceutical companies to challenge formulary listing and pricing decisions, and introduce onerous disclosure and "transparency" provisions that facilitate industry involvement in decision-making around coverage and pricing of medicines (and medical devices). This paper argues that the US agenda, if successfully prosecuted, would be likely to increase costs and reduce access to affordable medicines for New Zealanders. This would in turn be likely to exacerbate known inequities in access to medicines and thus disproportionately affect disadvantaged population groups, including Māori and Pacific peoples.

The high price of "free" trade: U.S. trade agreements and access to medicines

The United States' pursuit of increasingly TRIPS-Plus levels of intellectual property protection for medicines in bilateral and regional trade agreements is well recognized. Less so, however, are U.S. efforts through these agreements to influence and constrain the pharmaceutical coverage programs of its trading partners. Although arguably unsuccessful in the Australia- U.S. Free Trade Agreement (AUSFTA), the U.S. nevertheless succeeded in its bilateral FTA with South Korea (KORUS) in establishing prescriptive provisions pertaining to the operation of coverage and reimbursement programs for medicines and medical devices, which have the potential to adversely impact future access in that country. More recently, draft texts leaked from the current Trans Pacific Partnership Agreement (TPPA) negotiations show that U.S. objectives include not only AUSFTA-Plus and KORUS-Plus IP provisions but also ambitious inroads into the domestic health programs of its TPPA partners. This highlights the apparent conflict between trade goals - pursued through multilateral legal instruments to promote economic "health"- and public health objectives, such as the development of treatments for neglected diseases, the pursuit of efficiency and equity in priority setting, and the procurement of medicines at prices that reflect their therapeutic value and facilitate affordable access.

Multiple criteria decision analysis for health technology assessment

OBJECTIVES

Multicriteria decision analysis (MCDA) has been suggested by some researchers as a method to capture the benefits beyond quality adjusted life-years in a transparent and consistent manner. The objectives of this article were to analyze the possible application of MCDA approaches in health technology assessment and to describe their relative advantages and disadvantages.

METHODS

This article begins with an introduction to the most common types of MCDA models and a critical review of state-of-the-art methods for incorporating multiple criteria in health technology assessment. An overview of MCDA is provided and is compared against the current UK National Institute for Health and Clinical Excellence health technology appraisal process. A generic MCDA modeling approach is described, and the different MCDA modeling approaches are applied to a hypothetical case study.

RESULTS

A comparison of the different MCDA approaches is provided, and the generic issues that need consideration before the application of MCDA in health technology assessment are examined.

CONCLUSIONS

There are general practical issues that might arise from using an MCDA approach, and it is suggested that appropriate care be taken to ensure the success of MCDA techniques in the appraisal process.