Pricing and reimbursement policy for new orphan drugs in South Korea: focused on patient accessibility and budget impact

ABSTRACT

Background

This study aims to analyze the policy and its effects as they apply to new orphan drug (OD) and the budget impact after reimbursement listing in South Korean National Health Insurance (NHI).

Methods

We analyzed 198 new drugs listed by South Korea’s NHI from July 2007 to March 2017. A comparison of the time to listing for ODs and non-orphan drugs (NODs) was conducted via the Mann–Whitney U test. The budget impact of ODs was analyzed by the NHI claim data from the listing date of new drugs until 31 December 2018.

Results

An analysis of the time shows that the period (median) for NOD (13.2 months) was shorter than for OD (17.4 months) (Mann–Whitney U test: p = 0.018). The annualized budget impact of OD was 4,967,049 US$/year and that of NOD was 7,800,924 US$/year. Additionally, the percentage of oncology orphan drugs in the total pharmaceutical expenditure was 1.1%; as such, the percentage of non-oncology orphan drug was only 0.9%.

Conclusions

There has been no significant evidence for patient accessibility improvement regarding new ODs. The proportion of ODs in South Korea’s NHI total pharmaceutical expenditure is not high and the proportion of ODs among new drugs is even lower.

KEYWORDS:

• Patient accessibility
• orphan drug
• rare disease
• national health insurance
• pricing
• reimbursement
• budget impact

Abbreviations

OD: Orphan Drug; NHI: National Health Insurance; NOD: Non-Orphan Drug; OOD: Oncology Orphan Drug; R&D: Research and Development; HTA: Health Technology Assessments; ERP: External Reference Price; QALY: Quality-Adjusted Life Year; ICER: Incremental Cost-Effectiveness Ratio; P&R: Pricing and Reimbursement; WAP: Weighted Average Price; NHIS: National Health Insurance Service; RSA: Risk Sharing Agreement; PE: Pharmaco-Economic; NOOD: Non-Oncology Orphan Drug; NOND: Non-orphan Oncology Drug (NOND); OTH: others; HIRA: Health Insurance Review and Assessment Service

Acknowledgment

This research was supported by the Chung-Ang University Research Grants in 2021.

Declaration of interest

The authors have no relevant affiliations or financial involvement with any organization or entity with a financial interest in or financial conflict with the subject matter or materials discussed in the manuscript. This includes employment, consultancies, honoraria, stock ownership or options, expert testimony, grants or patents received or pending, or royalties.

Reviewer disclosures

Peer reviewers on this manuscript have no relevant financial or other relationships to disclose.

Author contributions

SL Yoo contributed to the study design, data collection, statistical analysis, manuscript development and review under the guidance of JH Lee. JH Lee supervised the entirety of the study right from study designing, data collection and analysis, and manuscript editing to manuscript submission. All the authors have read and approved the final version of the manuscript.

Availability of data and materials

The datasets during and/or analyzed during the current study are available from the corresponding author on reasonable request.

Additional information

Funding

This paper was not funded.