IDEAS home Printed from https://ideas.repec.org/a/eee/hepoli/v120y2016i10p1209-1215.html
   My bibliography  Save this article

Assessment of the Price–Volume Agreement Program in South Korea

Author

Listed:
  • Han, Euna
  • Park, Sun-Young
  • Lee, Eui-Kyung

Abstract

The Price–Volume Agreement Program (PVAP) was promulgated in 2007 in South Korea as the first attempt to adjust drug pricing according to total consumption in order to contain drug expenditure. This study was designed to assess the impact of the PVAP on diabetes drug expenditure for a period of a 10-year period (2003–2012) using claims data from the National Health Insurance Service. We estimated a multilevel mixed-effects linear regression model by comparing the level of total monthly diabetes drug expenditure for drugs subject to PVAP and existing drugs after adjusting the average differences in drug expenditure before and after the PVAP. The monthly total expenditure for drugs that were newly listed through the PVAP (negotiation drugs) was 7.03% higher on average compared to that for existing drugs, controlling for the baseline differences in expenditure before and after the PVAP. This increase was observed in all four subgroups of diabetes drugs, including sitagliptin, vildagliptin, exenatide, and others. The growth rate of total diabetes drug expenditure was reduced after the PVAP despite the sustained escalation of expenditure levels, which may imply that the PVAP has the potential to be an effective tool for drug expenditure control in the long term.

Suggested Citation

  • Han, Euna & Park, Sun-Young & Lee, Eui-Kyung, 2016. "Assessment of the Price–Volume Agreement Program in South Korea," Health Policy, Elsevier, vol. 120(10), pages 1209-1215.
    • Handle: RePEc:eee:hepoli:v:120:y:2016:i:10:p:1209-1215
    DOI: 10.1016/j.healthpol.2016.07.017
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0168851016302019
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.healthpol.2016.07.017?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Giuseppe Carone & Christoph Schwierz & Ana Xavier, 2012. "Cost-containment policies in public pharmaceutical spending in the EU," European Economy - Economic Papers 2008 - 2015 461, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    2. Park, Sun-Young & Han, Euna & Kim, Jini & Lee, Eui-Kyung, 2016. "Factors influencing the difference between forecasted and actual drug sales volumes under the price–volume agreement in South Korea," Health Policy, Elsevier, vol. 120(8), pages 867-874.
    3. Hui Zhang & Gregory Zaric, 2015. "Using price–volume agreements to manage pharmaceutical leakage and off-label promotion," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 16(7), pages 747-761, September.
    4. Andersson, Karolina & Petzold, Max Gustav & Sonesson, Christian & Lonnroth, Knut & Carlsten, Anders, 2006. "Do policy changes in the pharmaceutical reimbursement schedule affect drug expenditures?: Interrupted time series analysis of cost, volume and cost per volume trends in Sweden 1986-2002," Health Policy, Elsevier, vol. 79(2-3), pages 231-243, December.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Gregory J. Critchley & Gregory S. Zaric, 2019. "The impact of pharmaceutical marketing on market access, treatment coverage, pricing, and social welfare," Health Economics, John Wiley & Sons, Ltd., vol. 28(8), pages 1035-1051, August.
    2. Han, Euna & Chae, Su-Mi & Kim, Nam-Soon & Park, Sylvia, 2015. "Effects of pharmaceutical cost containment policies on doctors’ prescribing behavior: Focus on antibiotics," Health Policy, Elsevier, vol. 119(9), pages 1245-1254.
    3. Biancalani, Francesco & Gnecco, Giorgio & Riccaboni, Massimo, 2022. "Price-volume agreements: A one principal/two agents model," European Journal of Operational Research, Elsevier, vol. 300(1), pages 296-309.
    4. Nazila Yousefi & Mahyar Polroudi Moghaddam & Gita Afsharmanesh & Farzad Peiravian, 2020. "Evaluation of efficiency enhancement in Iran Health Insurance Organization: a policy brief for pharmaceutical cost containment," International Journal of Health Planning and Management, Wiley Blackwell, vol. 35(6), pages 1503-1511, November.
    5. Fu, Renhui & Ma, Chen & Zeng, Yamin & Zhang, Junsheng, 2024. "Determinants and consequences of sales/production report issuance," The British Accounting Review, Elsevier, vol. 56(5).
    6. Salas-Vega, Sebastian & Shearer, Emily & Mossialos, Elias, 2020. "Relationship between costs and clinical benefits of new cancer medicines in Australia, France, the UK, and the US," Social Science & Medicine, Elsevier, vol. 258(C).
    7. Folkert Groot & Stefano Capri & Jean-Claude Castanier & David Cunningham & Bruno Flamion & Mathias Flume & Harald Herholz & Lars-Åke Levin & Oriol Solà-Morales & Christoph J. Rupprecht & Natalie Shale, 2017. "Ethical Hurdles in the Prioritization of Oncology Care," Applied Health Economics and Health Policy, Springer, vol. 15(2), pages 119-126, April.
    8. Brekke, Kurt R. & Holmås, Tor Helge & Straume, Odd Rune, 2015. "Price regulation and parallel imports of pharmaceuticals," Journal of Public Economics, Elsevier, vol. 129(C), pages 92-105.
    9. Barros, Pedro Pita & Nunes, Luis C., 2010. "The impact of pharmaceutical policy measures: An endogenous structural-break approach," Social Science & Medicine, Elsevier, vol. 71(3), pages 440-450, August.
    10. Levaggi, Rosella, 2014. "Pricing schemes for new drugs: A welfare analysis," Social Science & Medicine, Elsevier, vol. 102(C), pages 69-73.
    11. Vogler, Sabine & Zimmermann, Nina & de Joncheere, Kees, 2016. "Policy interventions related to medicines: Survey of measures taken in European countries during 2010–2015," Health Policy, Elsevier, vol. 120(12), pages 1363-1377.
    12. Brekke, Kurt R. & Canta, Chiara & Straume, Odd Rune, 2016. "Reference pricing with endogenous generic entry," Journal of Health Economics, Elsevier, vol. 50(C), pages 312-329.
    13. Fernando Antonanzas & Carmelo Juárez-Castelló & Reyes Lorente & Roberto Rodríguez-Ibeas, 2019. "The Use of Risk-Sharing Contracts in Healthcare: Theoretical and Empirical Assessments," PharmacoEconomics, Springer, vol. 37(12), pages 1469-1483, December.
    14. Reisinger, Markus & Saurí, Lluís & Zenger, Hans, 2019. "Parallel imports, price controls, and innovation," Journal of Health Economics, Elsevier, vol. 66(C), pages 163-179.
    15. Kwon, Hye-Young & Hong, Ji-Min & Godman, Brian & Yang, Bong-Min, 2013. "Price cuts and drug spending in South Korea: The case of antihyperlipidemic agents," Health Policy, Elsevier, vol. 112(3), pages 217-226.
    16. Arundhati Sarkar Bose, 2017. "Why Pharmaceutical Exports from India to Europe Grew During Economic Crisis?," Management and Labour Studies, XLRI Jamshedpur, School of Business Management & Human Resources, vol. 42(1), pages 39-58, February.
    17. Fiorentini, Gianluca & Bruni, Matteo Lippi & Mammi, Irene, 2022. "The same old medicine but cheaper: The impact of patent expiry on physicians’ prescribing behaviour," Journal of Economic Behavior & Organization, Elsevier, vol. 204(C), pages 37-68.
    18. Özden Gür Ali & Başak Topaler, 2011. "How removing prescription drugs from reimbursement lists increases the pharmaceutical expenditures for alternatives," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 12(6), pages 553-562, December.
    19. Park, Sun-Young & Han, Euna & Kim, Jini & Lee, Eui-Kyung, 2016. "Factors influencing the difference between forecasted and actual drug sales volumes under the price–volume agreement in South Korea," Health Policy, Elsevier, vol. 120(8), pages 867-874.
    20. Kaiser, Ulrich & Mendez, Susan J. & Rønde, Thomas & Ullrich, Hannes, 2014. "Regulation of pharmaceutical prices: Evidence from a reference price reform in Denmark," Journal of Health Economics, Elsevier, vol. 36(C), pages 174-187.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:hepoli:v:120:y:2016:i:10:p:1209-1215. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu or the person in charge (email available below). General contact details of provider: http://www.elsevier.com/locate/healthpol .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.