Consistency of new drug pricing in Korea: Bridging variations among personnel in price negotiations

Abstract

Objectives: This study aims to explore the performance of price negotiations, over a period of 10 years, and identify individual variations in pricing that directly affect the consistency of pricing decisions. Methods: Existing literature and relative regulations were reviewed, and data provided by the National Health Insurance Service (NHIS) was analysed to evaluate the performance of price negotiations. To examine individual variations in pricing, hypothetical scenarios of four types of drugs were developed. These were subsequently given to the reviewers who have been actually conducting price negotiations at the NHIS. Results: Over the last decade, negotiations succeeded at a rate of 85.5 %, with a higher agreement rate in the more recent years. The reduction rate, via price negotiations, from the price approved for reimbursement by the Health Insurance Review and Assessment Service (HIRA), was 12.2 %. The survey results confirmed a significant individual variation in pricing. Especially, in the case of Drug N1, the higher-grade personnel and non-pharmacists tended to give higher prices with a significant difference. Conclusions: The individual variations that would greatly affect the financial results were confirmed when making decisions on price of new drugs. For the consistency of drug pricing, some measures to minimise the variation of reviewers' judgement are needed. (C) 2020 Published by Elsevier B.V.