SOUTH KOREA Law and Practice Contributed by: Keum Nang Park, Eileen Jaiyoung Shin, Jeonghoon Hong and Soo Yeon Park, Lee & Ko
8.2 Price Levels of Pharmaceuticals or Medical Devices For drugs, foreign prices may be referenced in the negotiation of the drug’s maximum reim- bursement price. In general, the economic eval- uation for pharmaceuticals takes precedence over such external price referencing in determin- ing the price of drugs. Foreign prices have direct effect only when deciding the price of drugs whose economic evaluation can be exempted under relevant pricing regulations. Meanwhile, in the case of pricing of medical devices (ie, pricing of the device or the medi- cal service that utilises such a device), foreign prices are not referenced but the import price or the price of listed products with similar function are considered. 8.3 Pharmaceuticals and Medical Devices: Reimbursement From Public Funds A substantial part of the costs of pharmaceu- ticals and medical services (using medical devices) is covered by the national health insur- ance scheme. However, even when covered by the national health insurance scheme, the full amount is not paid by the health insurance, as the patient is responsible for the applicable co- pay amount. Rules on the Standards of National Health Insur- ance Medical Benefits, and the Standards for Decision or Adjustment on Drugs define the items not subject to reimbursement. Such items include procedures, drugs, or treatment materi- als that are performed or used in cases where there is no hindrance to work or daily life, are not intended to improve essential bodily functions, or are preventative treatments not directly aimed at treating diseases or injuries.
of National Health Insurance Medical Benefits, and the Standards for Decision or Adjustment on Activity and Medical Materials for Treatment, etc. The MOHW, the Health Insurance Review and Assessment Service (HIRA) and national healthcare insurance system (NHIS) control the price of pharmaceuticals and medical devices. Prices for the majority of medical services pro- vided and pharmaceuticals sold in Korea are reimbursed by the Korean NHIS, and most legal residents of Korea are insured by NHIS. NHIS classifies the items subject to reimbursement into the following categories: pharmaceutical products, therapeutic procedures, and treat- ment materials. Here, treatment materials refer to consumable medical devices used in thera- peutic procedures. If a medical service or a pharmaceutical prod- uct is covered by NHIS, a patient cannot be charged more than the co-payment amount corresponding to the maximum reimbursement price published by the MOHW. If a medical ser- vice or pharmaceutical is not covered by NHIS, the healthcare provider is free to determine the price of such product or service. For pharmaceuticals and medical services to be reimbursed, the HIRA and the MOHW determine whether to reimburse the costs for medical ser- vices or pharmaceuticals after evaluating clinical efficacy, cost-effectiveness, and other factors. Regarding medical devices covered by the NHIS, the device may be subject to its own maximum reimbursement price, or the cost of the medical device may be included in the maximum reim- bursement price for the relevant medical service that utilises such a device.
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