• The Korean Society of Law and Medicine
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• v.20 no.1
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• pp.25-43
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• 2019

This study analyzed the problem of the time difference of medicine price cut in Korea according to the administrative and judicial process and sought to present the amendment in the related law to achieve substantial fairness. We considered unfairness of medicine price cut caused by the administrative and judicial process in three situations, the approval-patent linkage system, realistic differences in the practice of administration and suspension of price cut execution. Based on it, we reasoned out the solution to get substantial fairness in the administrative and judicial process of medicine price cut in Korea. Although each step of the administrative and judicial process is lawful and reasonable, the time difference of medicine price cut according to the administrative and judicial process can result in damages or windfall to both of pharmaceutical company and National Health Insurance Service. In the present legal system of Korea, it is unable to be correct. Thus, we present the amendment to correct the damages and windfall when it happens.

• The Korean Journal of Applied Statistics
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• v.31 no.2
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• pp.303-313
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• 2018

This study considers time series models to forecast drug expenditures in national health insurance. We adopt autoregressive error model (ARE) and transfer function model (TFM) with segmented level and trends (before and after 2012) in order to reflect drug price reduction in 2012. The ARE has only a segmented deterministic term to increase the forecasting performance, while the TFM explains a causality mechanism of drug expenditure with closely related exogenous variables. The mechanism is developed by cross-correlations of drug expenditures and exogenous variables. In both models, the level change appears significant and the number of drug users and ratio of elderly patients variables are significant in the TFM. The ARE tends to produce relatively low forecasts that have been influenced by a drug price reduction; however, the TFM does relatively high forecasts that have appropriately reflected the effects of exogenous variables. The ARIMA model without the exogenous variables produce the highest forecasts.

• The Korean Society of Law and Medicine
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• v.22 no.1
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• pp.91-124
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• 2021

In May 2019, the Ministry of Food and Drug Safety revised the "Pharmaceutical Determination and Adjustment Criteria" with the content of differentially calculating the price of generic drugs according to the registration of the drug substance and meeting the requirements for their own bioequivalence test. According to this revised rule, if their own bioequivalence test is not conducted, even the generic drugs that have already been approved would be lowered in price. I wondered whether this system was introduced with sufficient public legal considerations regarding its legislative purposes and means. Therefore, I reviewed the contents of the revised notice based on whether or not it is valid to determine and adjust the price of generic drugs in terms of the legitimacy of legislative purposes and the proportionality principle after introducing the history and background of the rule. First, I raised a question as to whether the purpose of preventing the overrun of generic drugs is indeed legitimate in terms of the legitimacy of the purpose. In order for the revised notice of "reduction of drug prices when the test requirements are not met," to meet the conformity principle, the premise that it is difficult to recognize safety and effectiveness through consignment (joint) bioequivalence test or that these tests are insufficient in safety and efficacy verification than their own test must be established. Nevertheless, it seems that suffficient review has not been carried out. In order to achieve the purpose of securing safety and effectiveness, the focus should be on 'reinforcement of the standards for bioequivalence test and the management of the bioequivalence test itself' rather than whether it is a their own test or a consignment (joint) test. Third, it is contrary to the necessity and substantiality principle that strict standards are uniformly applied to the products that can be considered to have been sufficiently verified for safety and effectiveness after a considerable period of time has passed after the product approval. In many cases, revised administrative legislations quickly enacted and amended in the state of lack of legal review or consensus, while the regulatory effects resulting from it are quite direct and specific to the regulated person. In this respect, I emphasized that the administrative legislative process also requires substantial review and prior control of the regulatory purposes and means, and that the participation of stakeholders in the legislative procedure is to be strengthened.

• Health Policy and Management
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• v.23 no.2
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• pp.112-123
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• 2013

Background: Under the risk of financial sustainability of National Health Insurance, Korean government attempted a series of regulations over pharmaceutical prices. The first price-cut was implemented to the hyperlipidemial treatments, and the prices of statins were reduced on 15th, April in 2009. The purposes of this study are 1) to investigate the impact of this price-cut on pharmaceutical expenditure, and 2) to identify the factors associated with drug-switch among statins. Methods: Using the national patients sample data, this study conducted time series analysis on the expenditures, prices, and volumes of statin drugs. To understand the factors associated with drug-switch, the multinomial logit model was analyzed at the patients level. Results: The results of time series analysis demonstrated that the price-cut of hyperlipidemic medicines did not lead to the reduced expenditure, suggesting the increased volume was the major cause. The multinomial logit analysis identified the switch of healthcare provider as the significant factor that was highly associated with drug-switch, implying the physicians' preference was the major motivation of drug-switch. Conclusion: Without control of utilization, price regulation itself could not reduce pharmaceutical expenditure. This suggests that the pharmaceutical regulations should be implemented on the basis of understanding of provider behaviors. The findings of this study will form the first step for further empirical studies.

• Journal of Preventive Medicine and Public Health
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• v.25 no.1 s.37
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• pp.64-72
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• 1992

To provide the information necessary for the insurance medicine management plan, price discount rates among the insurance medicines were studied. A total of 2,107 items of insurance medicine of which prices were discounted via governmental inspections of real transactional process of insurance medicine were analysed. The conclusions are as follows; 1. Among the variables relevant to the characteristics of manufacturers, price discount rates of insurance medicines were statistically significant with production rankings of manufacturers, incorporation year, existence of investments by foreign corporation, existence of a research institute, and enrollment in the exchange. And among the variables relevant to the properties of medicines, the number of enrolled items which have the same components, classification, the date of new enrollment, the sales of items, and the number of raw materials in the items were statistically significant. 2. Stepwise multiple regression was done to identify the factors which affect the price discount rates of insurance medicines. The number of enrolled items which have the same components, production rankings of manufactures, classification number (medicines for function of tissue cells), incorporation year(1940-1949), existence of investments by foreign corporations, classification number (anti-germ medicines), number of raw materials In the items, the sales of items, and medicines whose major objective is not treatment were significant variables and the $R^2$-value for these variables was 21.2%. Considering all of the above results, for management of insurance medicines, it seems important that the real transactional prices of insurance medicines should be identified systematically, focusing on the properties which affect the price discount rates of insurance medicines.

• The Korean Society of Law and Medicine
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• v.23 no.2
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• pp.3-36
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• 2022

In order to solve the pharmaceutical kickback problem, it is needed to establish legal system that allow ways to enable pharmaceutical promotion of medicines without kickbacks as well as provide sanction those who commit illegal act. Before the National Assembly and the government focused on strengthening sanctions. As a result, in 2014, a system of suspending medical care benefits was introduced, which could inflict heavy losses on pharmaceutical companies by withdrawing target medicines from the market. However, three years after the introduction, the system was abolished in 2018, recognizing the problem that the disposition could infringe on the patients' right to access to and choice of medicines. In 2021, the National Assembly made it possible for dispositions suspending medical care benefits regarding the third violation, which remained symbolic until then, replaced with administrative fines. Although the legislator's reflective stance on the system is more than clear, the Ministry of Health and Welfare still interprets that the old law should be applied to kickbacks for the period of the law. Moreover, regarding the substitution of fines at the discretion of the Minister of Health and Welfare under the old law, the narrow standards taken under the old law seems to be maintained. In this paper, firstly pharmaceutical kickback issue, the main reason for the introduction of the system, will be explained, after that the history of introduction and abolition of the system examined and last but not least the unconstitutionality of the system and the illegality of the disposition are to be examined.

• The Korean Society of Law and Medicine
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• v.23 no.4
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• pp.3-28
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• 2022

Recently, the targets and clauses of negotiation between 'National Health Insurance Service (NHIS)' and Pharmaceutical companies has been expanded. Due to newly adopted 'Quality management clause', 'Compulsory supply maintenance clause' and 'Penalty for breach of contract clause', not only 'Ministry of Health and Wellfare (MOHW)'s 'drug listing' and 'Price cap' announcement, but also 'negotiation between NHIS and pharmaceutical companies' can be a legal sanction to the suppliers. Once secretary of MOHW order NHIS to negotiate with pharmaceutical company, NHIS notify this order to the company and enter into the negotiation. 'The order' exists in the public domain between the government (MOHW) and public institutions (NHIS) and does not constrain the legal rights of companies (Therefore companies cannot pile a lawsuit about the order). However, 'the notice' or 'negotiation' is an act which has a counterpart, can be a target of administrative litigation if the company get some disadvantages from the talks. Negotiations can be divided into four types according to "the target (whether it is listed on the insurance benefit list)" and "the purpose (whether the target is price or conditional)." In particular, negotiations on listed drugs, whose goal is to set unfavorable conditions for companies, can be illegal if there is no price. So we need to consider compensation for the company as an incentive to negotiate.