OBJECTIVES: The aims of this study were to estimate budget savings from using off-patented oncology medicines, and to inform decision makers how these savings could be used to fund improvement of affordability to new innovative cancer treatments in South Korea.

METHODS: A model was developed to calculate budget savings from utilizing off-patented cancer drugs in Korea in the next 5 years (2020-2024). This study selected oncology medicines with one or more valid product patents that will expire during 2020-2024 in Korea. Key input parameters in the model included market share of generics, market growth, and price level of originators and generics. To reflect the market dynamics after patent expiration, the trend of off-patented market was estimated using sales volume data from 2012 to 2018. The study assumed that the price of off-patented drugs decreased according to the price regulation set by the Korean Government and the off-patented market did not grow. Sensitivity analysis was performed to test uncertainty around model input parameters.

RESULTS: Twenty four oncology medicines which met selection criteria were identified. In the base case analysis following patent expiration of cancer drugs during 2020-2024, patent expiration of the original cancer drugs will lead to a reduction of ₩234,429 million ($203 million), representing 20% of cancer drug expenditures in the 5-year time horizon. These savings were ranged from ₩157,633 million ($136 million) to ₩434,523 million ($376 million) depending on the scenarios of the sensitivity analyses.

CONCLUSIONS: This study findings indicate that patent loss of cancer drugs will lead to 20% reduction of the spending on cancer drugs in the next 5 years in South Korea. These savings could be used as way of improving government affordability for offering an innovative advanced cancer drugs to 94,000 cancer patients through reallocating budget savings from patent expiration.