• The Korean Journal of Health Service Management
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• v.9 no.4
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• pp.157-169
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• 2015

Objectives : The aim of this study was to investigate the effect of various Republic of Korea policies, including the medicine cost rationalization policy implemented By investigating the management strategy/performance changes of the industry caused by such policies. Methods : Pharmaceutical companies listed on the national stock exchange and the KOSDAQ were examined for 10 years from 2004 to 2013. Their financial statements were collected and market changes before and after drug price policy implementations were compared. Results : From the result of this research, among the medicine related policies, the drug price rationalization policy was found to have a significant effect on business management strategies in terms of safety, profitability and growth potential after its implementation. After the drug pricing transparency policy was implemented, management strategies were affected significantly in terms of safety and profitability. Conclusions : As a result, all of the medicine related policies were found to have regulatory effects. Based on these findings, implications, research limitations and future study plans are presented.

• Health Policy and Management
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• v.20 no.1
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• pp.183-203
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• 2010

The purpose of this study is to analyze the effect of the R&D subsidies by the government on the private firms' R&D investments in the Korean pharmaceutical industry, which are supposed to have positive effects on their economic performance. We also estimate the relationship between the private firms' R&D investments and firms' economic outcome. Empirical analysis is done by Error Component 2 Stage Least Squares(EC2SLS) estimation using 43 pharmaceutical firms' 8 years' panel data. The elasticity of the government R&D subsidies on the private R&D investments is 0.021%, which we cannot say 'efficient'. Also R&D investments have positive effects on the economic outcome of the pharmaceutical firms, as we expected. We propose several suggestions in the conclusion for the efficient way of government R&D subsidies to induce more private R&D investments.

• Health Policy and Management
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• v.21 no.3
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• pp.425-456
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• 2011

Background: Organizations in the pharmaceutical industry are highly dependent on the institutional environment. The introduction of pharmacoeconomics to the decision-making on the price and reimbursement decisions became strong constraints to pharmaceutical companies in Korea. As little is known about the issue on organization-environment interaction in the healthcare field, this study aimed to figure out how pharmaceutical companies adapted to the environmental changes. Methods: A multicase study method was used, selecting eight cases among multi-national pharmaceutical companies in South Korea. In-depth interviews were conducted with the managers of these organizations, and secondary data were reviewed to complement the interviews. Results: Pharmaceutical companies viewed the new policies as a big threat and sought for actions against them. One of the most distinguishing organizational changes was to construct a Market Access department. Other strategies managing the environment such as co-optation, forecasting, and bargaining were also implemented. These changes were consistent with the predictions of Resource Dependency Theory and Institutional Theory. Conclusions: The interactions between pharmaceutical companies and institutional environments in healthcare were first explored. This study presents a new perspective on how organizations change and the motives for the changes. The findings of this case study will form the basis of further empirical studies.

• Journal of the Korean Operations Research and Management Science Society
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• v.42 no.3
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• pp.35-49
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• 2017

The main objective of this paper is to empirically analyze the efficiency effects of mergers on Korean pharmaceutical firms and suggests managerial or policy implications for managers or policy makers. This study selects non-merging control firms close to the size of merging firms, as well as a set of merging firms, and measures the effects of mergers on efficiency three years before and after the merger using the non-parametric data envelopment analysis (DEA) method. To compare the differences of efficiency means among several groups, Wilcoxon rank sum test or Wilcoxon signed rank test is used. It showed that the long-term effects after the merger appeared partially. Furthermore, it was observed that there was no difference statistically in the efficiency between merging and non-merging firms. Also, there was no difference statistically in the efficiency between the pre- and post-merger periods. In conclusion, there was not any observed synergy effect through group (or affiliated) mergers between affiliates or related mergers for Korean pharmaceutical firms.

• 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.

• Health Policy and Management
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• v.18 no.3
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• pp.110-127
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• 2008

Expenditures on pharmaceuticals of different concepts were estimated and their functional, financing and providers' breakdowns were examined in line with the OECD's System of Health Accounts (SHA) manual. This study also shows the way such estimates are made. The results are then analyzed particularly from the international perspective. Data from both Household Survey by the National Statistical Office and the National Health and Nutritional Survey by the Ministry of Health and Welfare of Korea were used to estimate pharmaceutical expenditures that. are financed by out-of-pocket payments of the household, while national health insurance data etc. were used for estimation of pharmaceutical expenditures that are financed by public funding sources. The 'per capita expenditure on pharmaceutical/medical non-durables' in Korea stood at 380 US$ PPPs, less than the OECD average of 443 US$ PPPs in 2006, but its share of the per capita health expenditure of 25.9% noticeably outnumbered the OECD average of 17.1%, due partly to low per capita health expenditure as a denominator of the ratio. This indicates that Koreans tend to spend less on health care than an OECD average, while tending to spend more on pharmaceuticals than on other health care services, much like the pattern found in relatively low income countries. An international pharmaceuticals pricing mechanism is most likely responsible for such a tendency. In addition, it is to be noted that the percentage comes down to 21.0%, when expenditures on both medical non-durables and herbal medicine, which is locally quite popular among the elderly, have been excluded.

• Proceedings of the PSK Conference
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• 2004.10a
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• pp.123-125
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• 2004

• Proceedings of the Microbiological Society of Korea Conference
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• 1998.04a
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• pp.58.2-58.2
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• 1998

• The Korean Journal of Health Service Management
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• v.9 no.3
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• pp.247-254
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• 2015

Objectives : The aim of this study was to analyze the influence of foreign and institutional investors in the pharmaceutical industry on R&D investments. Methods : The empirical analysis was done for the years 2009 to 2013 which examined the period after the influence of the financial crisis. Financial statements and comments in general and internal transactions were extracted from the TS-2000 of the Korea Listed Company Association. STATA 12.0 was used as the statistical package for the panel analysis. Results : The results show that the shareholding ratio of foreigner investors turned out to have a statistically significant influence on R&D investment. No statistical significance was found in the shareholding ratio of institutional investors. Conclusions : The findings of this study, which indicate that a higher shareholding ratio of foreigner investors leads to greater R&D investment, indicate that foreign investors directly or indirectly impose pressure on a manager to make R&D investments for the long-term.

• Korea Journal of Hospital Management
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• v.23 no.2
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• pp.18-27
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• 2018

Purposes: This study aims to investigate the policy effect of mandatory application of DRG for 7 disease groups in general and tertiary hospitals. Methodology: As DRG was fully implemented in July 2013, this study compares two periods before and after the change(from July 2012 to June 2013, and from July 2013 to June 2014). The benefit claim data of the National Health Insurance Service was used for the comparison. Target patients were those who visited general or tertiary hospitals between July 2012 to June 2014. For pharmaceutical consumption, Interrupted Time Series (ITS) analysis was used to see the effect of DRG mandatory application. Findings: The number of drugs prescribed per patient and pharmaceutical expenditure both showed significant reduction compared to before the DRG implementation. Practical Implications: This study used 2 sets of 1 year period data from before and after the full implementation of DRG to analyze pharmaceutical consumption. When the comparison data accumulates further, it would be possible to conduct more diverse analysis to assess policy effect and to provide way forward for the future.