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KMID : 1170320210270040097
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Korean Journal of Health Economics and Policy
2021 Volume.27 No. 4 p.97 ~ p.130
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Effect of new drug entry type on drug list price and healthcare expenditure by disease
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Hwang So-Jung
Lee Tae-Jin
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Abstract
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As the entry of new medical technology is noted as one of the important phenomena in the healthcare sector, the impact of new drugs on healthcare sector needs to be assessed according to their types. In this study, in order to analyze the impact of entry of new drugs by disease, new drugs that have entered the list of the reimbursed drugs since 2011 are classified by their types of innovation: first-in-class ingredient with improved clinical benefit, first-in-class ingredient without improved clinical benefit, later-in-class ingredient with improved clinical benefit and later-in-class ingredient without improved clinical benefit and by necessity; essential drugs and non-essential drugs. And we performed analysis to evaluate the effect of new drugs entry on the frontier drug's list price, per capita health expenditures and per capita days of outpatient visits or hospitalization. The result indicates that entry of the first-in-class ingredient with improved clinical benefit causes per capita health expenditures to increase by 13.2% while entry of the later-in-class ingredient with improved clinical benefit reduces the frontier drug's list price by 1.29%, per capita health expenditures by 20.3%, and per capita days of outpatient visits or hospitalizations by 6.94%.
And the result also indicates that entry of the essential drug reduces the frontier drug's list price by 3.04%, per capita health expenditures by 18.5% and per capita days of outpatient visits or hospitalization by 6.94%. The finding of this study implies that the effect on the drug list price, health expenditures and number of days of outpatient visits or hospitalization could be different depending on the new drug's type of innovation and necessity. This suggests that we could identify the types of new drugs that wouldn't increase pharmaceutical costs and have a positive effect on healthcare sector.
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KEYWORD
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new drugs, innovative drugs, essential drugs, drug list price, healthcare expenditure
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