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

Author

Listed:
  • 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)

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.

Suggested Citation

  • Sun-Hong Kwon & Hea-Sun Park & Young-Jin Na & Chul Park & Ju-Young Shin & Hye-Lin Kim, 2021. "Price Reduction of Anticancer Drugs from 2007 to 2019 in South Korea: The Impact of Pharmaceutical Cost-Containment Policies," Applied Health Economics and Health Policy, Springer, vol. 19(3), pages 439-450, May.
    • Handle: RePEc:spr:aphecp:v:19:y:2021:i:3:d:10.1007_s40258-020-00604-6
    DOI: 10.1007/s40258-020-00604-6
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    References listed on IDEAS

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    1. Patricia Danzon;Li-Wei Chao, 2000. "Prices, Competition and Regulation in Pharmaceuticals: A Cross-National Comparison," Monograph 000462, Office of Health Economics.
    2. Valérie Paris & Annalisa Belloni, 2013. "Value in Pharmaceutical Pricing," OECD Health Working Papers 63, OECD Publishing.
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