The Role of Economic Evidence in Drug Reimbursement: South Korea

This study investigates the factors that were considered in drug reimbursement decision making in South Korea and the role of the economic evidence in it. All recommendations made by the pharmaceutical benefit coverage assessment committee (PBCAC) as of April 2012 have been reviewed and analyzed to identify the relative importance of economic evidence. The data was retrieved from minutes of PBCAC and related documents prepared for the meeting. In case the information included in the minutes was unclear, official inquiries were filed to HIRA. HIRA requires the full economic evaluation data for the drug which is improved in terms of effectiveness relative to its comparators. A total of 32 cases have been admitted as a result of their superiority over comparators, and provided the information of cost per life years gained or cost per QALYs gained. We found that the drug is highly likely to be recommended to list in case the ICER is less than 22 million won/QALY. For three exceptional cases rejected, the committee considered the submitted ratio as too uncertain to support its value for money. Some drugs were accepted, considering the severity of disease or the availability of alternative therapies, even if their ICER was higher than the other cases. Cost-effectiveness is a critical factor in reimbursement decision making, but the roll of full economic evaluations is limited as there are not many drugs that are superior in efficacy to existing alternatives. In that case, a price comparison is sufficient and most of them have been submitted at a lower price than the alternative drugs.