OBJECTIVES: : To evaluate the impacts of two pharmaceutical cost containment policies-financial incentive for physicians to reduce their prescription drug expenditures and lump-sum drug price cut implemented in Oct. 2010 and Apr. 2012 respectively- on prescription drug expenditures from 2009 to 2012 in the national health insurance system of Korea. METHODS: Claims data for outpatient services in a random sample of 1,625 clinics were drawn from the national health insurance database between 2009 and 2012. Segmented regression analyses of interrupted time series were used to evaluate changes in prescription drug expenditures and non-drug expenditures per claim for selected common diseases – gastric ulcer & gastro-oesophageal reflux disease (adults), acute upper respiratory infection (URI) (adults/children), and acute lower respiratory infection (LRI) (adults/children). RESULTS: : Prescription drug expenditures increased immediately after the implementation of financial incentive program in gastric ulcer & gastro-oesophageal reflux disease and LRI in adults. Monthly trends of prescription drug expenditures significantly decreased after the policy in all diseases analyzed. Lump-sum drug price cut suddenly dropped prescription drug expenditures. However, monthly trends of drug expenditures significantly increased after that. Neither of the two policies has changed the level or trend of non-drug expenditures. CONCLUSIONS: : Financial incentive to physicians for reducing prescription drug costs was associated with decreased trends of prescription drug expenditures without increasing non-drug expenditures. Drug price cut led to instant reductions of prescription drug expenditures, however, it increased the monthly trends of prescription drug expenditures after the sudden reduction. The differential effects of two policies provide implications for pharmaceutical cost containment strategies in health insurance system.