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KMID : 1170320080140010103
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Korean Journal of Health Economics and Policy
2008 Volume.14 No. 1 p.103 ~ p.125
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The Volume and the Price of Generic Drug Consumption in Korea Prescription Drug Market
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Shin Ju-Young
Choi Sang-Eun
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Abstract
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Korea National Health Insurance (KNHI) has spent almost 30% of total expenditure on the prescription drugs since 2000. Encouraging generic drug consumption is known as one way to save the drug cost. This paper aims to explore the volume and price of generic drug consumption in Korea prescription drug market and to investigate the determinants of generic market share. We identified the top 10 high-expenditure chemical entities of the prescription drug market during the period of 2001/01/01~2005/12/31. The rate of generic drug’s expenditure among top 10 sales drugs is consistently 50~60 % from 2001 to 2004, and over 70% on 2005. The volume to value ratio was 0.9~1.1 consistently, that meant the difference of generic price and original drug price was small. To analyze the determinants of generic market share, data on 857 drug products spanning twelve chemical entities were collected for the period of 01/01/2005 to 12/31/2005 from KNHI’s drug benefit database. Generic market share was positively correlated with product price (0.088, p<0.01) and negatively correlated with price difference (-.0.140, p<0.01). On the multivariable regression model, it was found that the product approval year was the most significant factor to affect generic market share: the early-approval product tended to be used more. Price difference was also significant factor to affect the generic market share. In conclusion, we found that Korea had mature generic market that meant the rate of generic usage is very high, comparing those of European countries. Nevertheless the usage of generics was not connected to cost-containment of pharmaceutical expenditure in KNHI
due to the high price of generics.
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KEYWORD
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generic, market share, determinant, volume to value ratio
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