Hye-Young Kwon1,2, Hyungmin Kim3, Brian Godman4,5, Michael R Reich1. 1. a 1 Department of Global Health and Population, Harvard School of Public Health, Boston, MA 02115, USA. 2. b 2 Institute of Health and Environment, Graduate School of Public Health, Seoul National University, Seoul, South Korea. 3. c 3 National Health Insurance Service, Seoul, South Korea. 4. d 4 Department of Laboratory Medicine, Division of Clinical Pharmacology, Karolinska Institutet, Karolinska University Hospital Huddinge, SE-141 86 Stockholm, Sweden. 5. e 5 Strathclyde Institute of Pharmacy & Biomedical Sciences, University of Strathclyde, Glasgow, UK.
Abstract
INTRODUCTION: A new pricing policy was introduced in Korea in April 2012 with the aim of strengthening competition among off-patent drugs by eliminating price gaps between originators and generics. OBJECTIVE: Examine the effect of newly implemented pricing policy. METHODS: Retrospectively examining the effects through extracting from the National Health Insurance claims data a 30-month panel dataset (January 2011-June 2013) containing consumption data in four major therapeutic classes (antihypertensives, lipid-lowering drugs, antiulcerants and antidepressants). Proxies for market competition were examined before and after the policy. RESULTS: The new pricing policy did not enhance competition among off-patent drugs. In fact, price dispersion significantly decreased as opposed to the expected change. Originator-to-generic utilization increased 6.12 times (p = 0.000) after the new policy. CONCLUSIONS: The new pricing policy made no impact on competition among off-patent drugs. Competition in the off-patent market cannot be enhanced unless both supply and demand side measures are coordinated.
INTRODUCTION: A new pricing policy was introduced in Korea in April 2012 with the aim of strengthening competition among off-patent drugs by eliminating price gaps between originators and generics. OBJECTIVE: Examine the effect of newly implemented pricing policy. METHODS: Retrospectively examining the effects through extracting from the National Health Insurance claims data a 30-month panel dataset (January 2011-June 2013) containing consumption data in four major therapeutic classes (antihypertensives, lipid-lowering drugs, antiulcerants and antidepressants). Proxies for market competition were examined before and after the policy. RESULTS: The new pricing policy did not enhance competition among off-patent drugs. In fact, price dispersion significantly decreased as opposed to the expected change. Originator-to-generic utilization increased 6.12 times (p = 0.000) after the new policy. CONCLUSIONS: The new pricing policy made no impact on competition among off-patent drugs. Competition in the off-patent market cannot be enhanced unless both supply and demand side measures are coordinated.
Entities:
Keywords:
Korea; competition; drug pricing; generic medicines; off-patent drugs