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Pricing/Reimbursement/Parallel Trade Reports

Market Access Korea: Breaking Into the Developed World's Fastest Growing Pharmaceutical Market

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Publication Date: November 2010

Pages: 66

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Currently ranked fourth in Asia-Pacific - after Japan, China and India, but ahead of Australia - drug sales at manufacturer selling prices are the equivalent of USD 11 billion. If you consider that foreign innovative products did not gain access to the reimbursement system until late 1999 it is remarkable that multinational companies today hold half of the top-10 sales rankings with prescription products and in total have a 40% market share.   

Modern-day Korea is trying hard to shake off its reputation for lack of transparency in reimbursement decisions and unfair business practices, with the Free Trade Agreements signed with the US and the EU cementing the internationalisation process.

With pricing and reimbursement there is still no denying the required processes are complex and multi-tiered, with major rule changes and new cost containment measures as a result of budget limitations announced in quick succession over recent years. Up to date and fully researched through local data-gathering and face-to-face interviews, Market Access Korea will explain it all, and give your company the power of Korean ginseng!

Subjects covered clearly but in detail include:

  • The decision processes for new additions to the positive list and for price adjustments
  • Asia’s first reimbursement system requiring pharmacoeconomic evidence
  • Use of the new refund scheme if price negotiations break down
  • How market-based actual transaction pricing, introduced from 1 October 2010, will work and what it will mean
  • Pricing case studies
  • Generic and biosimilar pricing and its impact on original brands


About the Author

With well over 50 major titles to his name, Donald Macarthur is one of the world’s most experienced and widely read commercial biopharmaceutical writers. His reports are based on up-to-the-minute research - largely primary research in the field - among government officials,industry and other experts on the topic concerned.

For two years up to June 2007, Don Macarthur was senior consultant with the strategic international pharmaceutical pricing, reimbursement and market access consultancy PriceSpective. From 2001-2005, Mr Macarthur was Secretary General of the European Association of Euro-Pharmaceutical Companies, the grouping of national associations and individual firms involved in parallel trading of medicines with membership from 16 EEA countries.

His current role as independent consultant and analytical writer also occupied the bulk of the 16 years preceding 2001, with a focus on drug cost containment policy worldwide, pricing and reimbursement, hospital access, European integration and enlargement, wholesale and retail distribution, mail order, homecare, orphan drugs, generics, parallel trade, Rx-to-OTC switching, and several aspects of the Japanese market and industry.

He has written over 50 major reports. Published by Scrip, IMS Health, Financial Times/Informa, Taylor Nelson Sofres Healthcare, Decision Resources, Droit & Pharmacie, PPR Communications and himself, several have become industry standards. He also founded, edited and published for four years the world’s first periodical on drug pricing and reimbursement, Pharma Pricing Review.

Consultancy clients have included the European Federation of Pharmaceutical Industries and Associations - he was the very first consultant ever used by EFPIA - Pharmaceutical Research and Manufacturers of America (PhRMA), the European grouping of national full-line pharmaceutical wholesaling associations (GIRP), the UK’s Office of Fair Trading, other government agencies, and many major multinational biopharmaceutical manufacturers, legal and financial firms.

Numerous presentations have been given at international conferences, and he has testified both at a US Senate Committee hearing and at the HHS Secretary’s task force hearing on prescription drug importation. His articles have appeared in many English language pharmaceutical business journals, with some translated into Japanese, German and Turkish.

Qualifying as a pharmacist from the University of London, Mr Macarthur’s early career involved community and hospital pharmacy practice, 16 years in development, regulatory affairs and medical department functions in the pharmaceutical industry in the UK (Fisons, 1969-72; Parke-Davis, 1972-75; Roche, 1976-78; Serono, 1978-82; Lundbeck 1982-84), one year in Japan, and four years with PJB Publications (publishers of Scrip).


Table of Contents

Executive Summary

1. Market Introduction
1.1 Healthcare System
1.2 Public Health Insurance
1.3 Private Health Insurance

2. Pharmaceutical Sector
2.1 Regulatory Affairs
2.2 Pharmaceutical Market
2.3 Industry
2.4 Controlling NHI Costs
2.5 Prospects

3. Introductory Pricing: Methodology
3.1 Historical Development
3.2 Current Process for Imported Innovative New Drugs
3.2.1 Appraisal
3.2.2 Negotiation
3.2.3 Arbitration/Refund Scheme
3.2.4 Ratification
3.3 Shortage Prevention Drugs
3.4 Line Extensions
3.5 Combination Products
3.6 Process for Other Imported New Drugs
3.7 Process for Domestically-developed Innovative New Drugs
3.8 Process for OTC Products

4. Health Technology Assessment
4.1 Pharmacoeconomic Demands for New Drugs
4.1.1 Scope
4.1.2 Criteria Applied
4.1.3 Guidelines General considerations Method of economic evaluation
4.2 Review of Marketed Products  
4.3 Results
4.3.1 New Drugs
4.3.2 Previously Marketed Drugs

5. Introductory Pricing: Results
5.1 Reimbursement Listing Success Rate
5.2 Breakdown in Price Negotiations  
5.3 Compassionate Use  
5.4 Case Studies
5.4.1 Iressa
5.4.2 Fuzeon
5.4.3 Glivec
5.5 Sources for Price Information

6. Price Revision
6.1 Price-Volume Linkage
6.2 Triennial Price Re-evaluation
6.3 Review of Marketed Products
6.4 First Generic Approval
6.5 Market-based Actual Transaction Pricing
6.6 Improper Promotion

7. Demand-side Controls
7.1 Prescribing Controls
7.2 Patient Co-payment

8. Payment of Providers
8.1 Payment of Clinics
8.2 Payment of Hospitals
8.3 Payment of Pharmacies
8.4 Purchasing Incentives
8.5 Actual Transaction Prices
8.6 Market-based Actual Transaction Prices

9. Generics/Biosimilars
9.1 Patent/Other IP Right Issues
9.2 Pricing of Generics
9.3 Generic Substitution

10. Distribution
10.1 Separation of the Roles of Prescribing and Dispensing
10.2 Wholesalers
10.3 Community Pharmacies

11. Free Trade Agreements
11.1 US
11.2 EU

1.1 Basic demographic and healthcare statistics
1.2 Financial status of NHI, 2000-2009  
2.1 Clinical trials approved by KFDA, 1999-2009
2.2 KFDA process for approval of new drug
2.3 Prescription drug sales, local companies vs multinationals 2007-10
2.4 Prescription drug sales by origin of prescription 2007-10
2.5 International roll-out of new drugs reimbursed in Korea, 2003-05
2.6 Top-10 manufacturers by Rx sales by channel, 2010
2.7 Trends in pharmaceutical expenditure under NHI, 2002-09
3.1 Number A7 countries reimbursing drugs applying for Korean NHI listing
4.1 Clinical- and cost-effectiveness re-examination road map
5.1 Reimbursement listing success rates, pre- and post-DERP
5.2 Pricing and reimbursement history of Glivec in Korea, 2001-10
7.1 Patient co-payment rates

3.1 Initial reimbursement pricing procedure

Glossary of Abbreviations and Acronyms

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