Korea Drug Reimbursement Update 2024
Korea is taking significant steps to improve the accessibility and affordability of innovative medications, with a particular focus on treatments for cancer and rare diseases. The government has recently implemented a series of reforms designed to streamline the Korean drug reimbursement process and expand coverage, marking a crucial development in the country’s healthcare policy.
Streamlined Reimbursement Process
Recent findings from the Seoul National University R&DB Research Foundation confirm Korea’s commitment to increasing reimbursement rates for innovative drugs. The traditionally lengthy approval process, which could extend up to 1,000 days—far surpassing timelines in the US, EU, or Japan—has been halved. This improvement stems from the introduction of risk-sharing agreements (RSAs) and waivers for cost-effectiveness analysis (CEA), which have significantly expedited the process.
Under the new RSA framework, about 70 innovative drugs were assessed, and a higher percentage received reimbursement on their first or second review compared to previous years. The Korean Ministry of Health and Welfare (MOHW), along with the Health Insurance Review & Assessment Service (HIRA) and the Ministry of Food and Drug Safety (MFDS), have also cut the duration for price negotiations from 60 days down to 30 days. Moreover, a pilot linkage system is now being tested that handles drug product applications, reimbursement applications, and final price determinations all at once, rather than in sequence.
Risk Sharing and Economic Evaluation Waivers
The RSA not only accelerates the approval process but also introduces a financial safety net for the National Health Insurance Service (NHIS), where manufacturers might have to refund payments if the drugs do not achieve expected outcomes. This approach promotes both innovation and fiscal responsibility.
Additionally, HIRA has decided to exempt certain types of drugs from pharmacoeconomic evaluation, specifically medications for children where no alternatives exist, as well as treatments for rare diseases and cancer. This policy change aims to remove hurdles that could delay critical drugs from reaching the Korean market.
Challenges in Defining Innovation
One of the more contentious issues in these reforms has been establishing a clear definition of what qualifies as an “innovative new drug.” The differing perspectives between foreign and domestic manufacturers underscore broader debates about pharmaceutical innovation. Foreign companies favor a broader definition that includes drugs with new mechanisms and those treating serious diseases, recognized under Korea’s “GIFT” program (similar to the US’s breakthrough status). Domestic companies, however, advocate for a narrower scope, limiting it to drugs involved in the GIFT program and those tested in local clinical trials.
Looking Ahead
The ongoing discussions facilitated by the MOHW’s private-public working group are a proactive effort to bridge these differences and agree on standards that not only foster the development of groundbreaking drugs but also enhance their accessibility for Korean patients.
With these policies set to evolve in the latter half of 2023, Korea is positioning itself as a leader in healthcare innovation. This initiative is expected not only to improve patient outcomes but also to stimulate the pharmaceutical industry by creating an environment conducive to medical breakthroughs and economic growth. These reforms promise to significantly enhance the quality of life for many and support a thriving healthcare ecosystem.
Written by: Tran Doan – Director, Pacific Bridge Medical (PBM)
Ms. Doan leads Asian regulatory and business development consulting projects for both drug and medical device companies. She graduated with a B.A., Phi Beta Kappa, in Mathematics and Economics from Franklin and Marshall College.