Prior to 2012, the reimbursement criteria for osteoporosis medications has been criticized for its strict BMD indication and 6-month coverage period in Korea. The cost estimate of expanding coverage to clinically recommended level was 130 billion KRW. OBJECTIVES: To suggest a better estimate of budget impacts for osteoporosis drug therapy in Korea METHODS: A 5-year semi-annual Markov model focusing on the fracture-preventing effects of osteoporosis medications was constructed. Fracture-preventing effects of osteoporosis drugs were extracted from previous systematic reviews and the HIRA’s national health insurance claims database from 2006 to 2008 was used to estimate the probabilities and costs for modeling. Mortality rate at each stage was estimated from the literature and the Statistics Korea. The Korean National Health and Nutrition Examination Survey data and Korean FRAX tool were utilized to calculate the population at each stage. The scenarios of reimbursement criteria expansion were composed of BMD T-score, coverage period, and including high-fracture-risk patients with osteopenia. RESULTS: Reimbursement coverage expansion is expected to increase budget input, but the increase gradually decrease over time. If the reimbursement criteria is expanded to T-score≤-2.5,  coverage period increased to 1 year, but excluding high-fracture-risk osteopenia, then about 450 billion KRW is required for osteoporosis drug acquisition for 5 years along with 120 billion KRW saving for fracture treatment costs compared to the existing criteria. Considering both expansion costs and fracture costs, the reduction in fracture costs partially offsets the expanded coverage of osteoporosis drugs. In summary, 87 billion KRW was estimated for the first year budget impact and it gradually decreases to about 50 billion KRW in the fifth year. CONCLUSIONS: This budget impact analysis considering both increase in osteoporosis drug cost and saved fracture cost shows the total health insurance budget impact is lower than the previously suggested amount.