NHIS and Pharmaceutical Companies Reduce Prices of 181 Drugs... Annual Budget Savings of 35.2 Billion KRW

▲National Health Insurance Service

[Asia Economy Reporter Choi Dae-yeol] The prices of 181 pharmaceutical items with significantly increased health insurance claims last year have been reduced. It is expected to save nearly 35 billion KRW in health insurance finances.

On the 7th, the National Health Insurance Service (NHIS) announced that after negotiations over the past two months with the respective pharmaceutical companies based on usage and price linkage (Type D), they reached this agreement. The 'Type D' negotiation applies when the claim amount for a registered drug last year increased by more than 60% compared to 2018, or increased by more than 10% with an increase amount exceeding 5 billion KRW, without separate negotiations between the NHIS and the pharmaceutical companies.

The NHIS explained that this system, where pharmaceutical companies and the NHIS negotiate to lower drug prices to share financial risks, contributes to reducing health insurance expenditures. The agreed prices underwent review by the Health Insurance Policy Deliberation Committee, and the Minister of Health and Welfare decided and announced the upper limit prices, which were uniformly reduced as of the 1st of this month. The NHIS expects the annual financial savings to be approximately 35.2 billion KRW.

Kang Cheong-hee, Executive Director of Benefits at NHIS, stated, "We will continue to communicate and cooperate organically with pharmaceutical companies to strengthen post-price management functions and proactively manage drug expenditure."

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