The Effects of Cost Containment and Price Policies on Pharmaceutical Expenditure in South Korea

Woohyeon Kim, Heejo Koo, Hye Jae Lee, Euna Han

Research output: Contribution to journalArticlepeer-review

1 Citation (Scopus)


Background: Policy-makers have proposed and implemented various cost-containment policies for drug prices and quantities to regulate rising pharmaceutical spending. Our study focused on a major change in pricing policy and several incentive schemes for curbing pharmaceutical expenditure growth during the 2010s in Korea. Methods: We constructed the longitudinal dataset from 2008-2017 for 12 904 clinics to track the prescriber behavior before and after the implemented policies. Applying an interrupted time series model, we analyzed changes in trends in overall monthly drug expenditure and antibiotic drug expenditure per prescription for outpatient claims diagnosed with three major diseases before and after the policies’ implementation. Results: Significant price reductions and incentives for more efficient drug prescriptions resulted in an immediate decrease in monthly drug expenditures in clinics. However, we found attenuated effects over the long run. The top-spending clinics showed the highest rate of increase in drug costs. Conclusion: Future policy interventions can maximize their effects by targeting high-spending providers.

Original languageEnglish
Pages (from-to)2198-2207
Number of pages10
JournalInternational Journal of Health Policy and Management
Issue number10
Publication statusPublished - 2022 Oct

Bibliographical note

Funding Information:
Research support from the Korea Institute of Public Finance is gratefully acknowledged. The content is solely the responsibility of the authors and does not necessarily represent the official view of the Korea Institute of Public Finance. The Korea Institute of Public Finance was not involved in the preparation and submission of this manuscript.

Publisher Copyright:
© 2022 The Author(s).

All Science Journal Classification (ASJC) codes

  • Leadership and Management
  • Health(social science)
  • Health Policy
  • Management, Monitoring, Policy and Law
  • Health Information Management


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