KANTAR HEALTH BLOG

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Think You Know Korea?

by Junghwa Lee | Nov 8, 2018

With Korea offering all of its residents health insurance through the National Health Insurance (NHI) system, smart and diligent management of healthcare costs is required by the NHI Corporation to keep that system healthy. Multi-national companies looking to do business in Korea must be prepared to demonstrate the value of their medicines and develop an effective market access strategy to allow Korean patients to benefit from their medicines.

An Aging Population

Korea today is faced with an aging population, where chronic diseases such as diabetes and hypertension, along with a variety of cancers, are prevalent and problematic. The pervasiveness of chronic disease is also steadily increasing due to longer patient lifespans. From a pharmaco-economics perspective, this will cause healthcare costs to rise even further. However, pharma companies can take steps to lessen the economic burden, such as carefully examining potential opportunities in generic and bio medicines.

Key Challenges

With 100 percent of patients covered by the NHI system, and most prescribed medicines subject to NHI reimbursement, adherence to government regulations and inspections is a critical component of success. Pharmaceutical company executives aiming to do business in Korea must take several key steps, including:

  • Preparing evidence as to why their medicine should be covered by the NHI reimbursement system. This includes carefully preparing all supporting materials and evidence.
  • Paying close attention to price negotiations. If a medicine is not approved by the government, companies will want to know the acceptable price from a patient and physician perspective for the non-reimbursement sale of the medicine.
  • Developing a dependence strategy to counter patent expiration. This, as well as a price cut of at least 20 percent, will be critical components of continued success.

Pharma companies will also need to take note of who the key target doctors are for specific diseases and treatments. For many diseases, key opinion leaders (KOLs) wield tremendous power on treatment decisions and this influence is amplified through word-of-mouth. For some rare diseases, there are only a few doctors who make treatment decisions, which makes maintaining positive relationships with these physicians critical for market penetration.

Finally, with Korea's NHI system firmly in place, the government holds substantial power in reviewing the prices and negotiating the costs of medicines. Pharma companies should consider specific reimbursement strategies, such as risk sharing programs, to gain a competitive advantage on the competition.

Looking Forward

The Korean government is trying to further expand medicine reimbursement coverage. However, current financial resources are not enough to satisfy demand and it’s expected that the budget for reimbursement will be exhausted in the near future. This will put further price pressure on pharmaceutical companies to create top-notch pricing strategies. In addition, with life expectancies increasing and older generations holding more monetary power, greater attention to segmentation will be required. With older patients expecting a higher quality-of-life, opportunities will exist to target population segments with custom product messaging.

To maximize commercial effectiveness in Korea, Kantar Health offers a variety of proprietary tools and resources to identify and assess longitudinal trends, real world research insights and patient attitudes. For more information, please be sure to check out Kantar Health's latest Edge of Insight report, Inside the Growth Markets, where Kantar Health takes an in-depth look at today's most attractive healthcare growth markets – China, Brazil, India, Korea, Taiwan, and Central and Eastern Europe – and details what steps pharma companies can take to optimize commercial success.

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