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KMID : 1170320100160020017
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Korean Journal of Health Economics and Policy
2010 Volume.16 No. 2 p.17 ~ p.37
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Issues with Orphan Drug Pricing in South Korea
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Kwon Hye-Young
Yang Bong-Min
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Abstract
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Orphan drugs to treat rare diseases constitute a unique market structure, with strong monopoly at the producer side. The various characteristics embedded with orphan drugs create an environment which often in conflict with health policy goals of a health care system. For example in Korea, conflicts between the orphan drug producers and the public insurer generated the problem of drug supply refusal in recent years. Facing this as a health policy issue, this study examines diverse aspects involved surrounding orphan drug pricing and supply in the Korean context. In particular, ultraorphan drugs, orphan drugs with higher need of patient protection from insurer perspective, are susceptible to breakdown of price negotiations. The end result of negotiation breakdown takes the form of supply refusal, due mainly to supplier’s dissatisfaction with the proposed reimbursement price by the insurer. Moreover, for the health system’s perspective, funding high priced ultraorphan drugs within a limited public insurance budget often implies a painful trade-off, that many patients with more common diseases may have to forego highly cost-beneficial treatments. Facing all kinds of social and economic issues involved, this study investigates related concerns with the pricing and supply of orphan drugs first, and then a number of health policy options are offered within the Korean public health context.
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KEYWORD
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Orphan drug, Ultraorphan drug, Supply refusal, Price negotiation
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