Work

New Drug Expenditure by Therapeutic Area in South Korea: International Comparison and Policy Implications

Year: 2025

Type: article

Abstract: Background Pharmaceutical expenditures play a pivotal role in healthcare systems, serving as indicators of innovation, equity, and fiscal sustainability. In South Korea, policies such as the Economic Evaluation Exemption (EEE) and Risk-Sharing Agreements (RSAs) aim to enhance access to innovative therapies. At the same time, these policies address rising healthcare costs. However, disparities in expenditure allocation across therapeutic areas persist. Methods This retrospective observational study analyzes pharmaceutical expenditures in South Korea from 2007 to 2022, focusing on new chemical entities (NCEs). Data were sourced from the IQVIA MIDAS Global Database, WHO Global Burden of Disease (GBD) database, and South Korea’s National Health Insurance records. Expenditure patterns were benchmarked against OECD and A8 countries using metrics such as Disability-Adjusted Life Years (DALYs, a metric combining years lost due to premature death and disability) Results South Korea introduced 276 NCEs by 2022, representing significant growth but remaining below the OECD average. NCE expenditure increased from 10.0% to 16.0% of total pharmaceutical spending between 2017 and 2022, while the A8 average rose from 26.2% to 48.1%. Despite high oncology expenditure aligning with disease burden, chronic diseases—such as musculoskeletal and cardiovascular conditions—were underfunded relative to their DALYs. Conclusions South Korea has made notable progress in aligning pharmaceutical spending with public health priorities, particularly in oncology. However, further policy refinements are needed to optimize resource allocation for chronic diseases and achieve equitable, sustainable healthcare outcomes. Expanding RSA frameworks and adopting global best practices—such as increased transparency in expenditure allocation—could address existing gaps more effectively.

Source: Healthcare

DOI: 10.3390/healthcare13050468

Authors: Seung-Rae Yu, Sooyoung Choi

Institutions: Dongduk Women's University, University of Florida Health, University of Florida

Language: English

Topic: Pharmaceutical Economics and Policy

Subfield: Economics and Econometrics

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDG: Good health and well-being

Open Access status: gold

Estimated APC paid: $3,258