South Korea Health Policy Updates – May 2023

Published May 30, 2023

Sang-Soo Lee, PhD, MBA, Sr. Director, Government Affairs and Market Access, Medtronic Korea, and Head of Center of Expertise (COE), Government Affairs and Market Access, Medtronic Asia Pacific, Seoul, South Korea

1. KIHASA Published “Study on Value-Based Payment Development for Patient-Centered Health Care System”

On February 23, 2023, ‘Korea Institute for Health and Social Affairs (KIHASA)’ announced the results of the study on value-based payment development for the patient-centered health care system.[1] Traditionally, Korea’s healthcare system has been developed in a provider-centered way to effectively respond to acute diseases. However, with the recent increase in chronic diseases, the importance of a patient-centered healthcare cooperation system is emphasized, and the model of such a system can be designed in various ways depending on the target population and related services. Thus, this study aims to present three case models of the patient-centered healthcare cooperation system and propose a value-based reward system suitable for each model. In addition, to attract providers and patients to participate in the healthcare cooperation system and improve acceptance of the new system, this study proposed improvement tasks for the compensation system of providers and healthcare system users including patients.

2. Digital therapeutics for cognitive behavior therapy for chronic insomnia approved for use in Korea

On March 30, 2023, the Ministry of Health and Welfare (MoHW) published “safety and efficacy assessment results of new health technologies (notice number 2023-57)”.[2]  Among the new health technologies announced, “cognitive behavior therapy for chronic insomnia using digital therapeutics” was included. The digital therapeutics technology announced this time is a technology to improve the symptoms of insomnia, targeting chronic insomnia patients whose symptoms have continued for more than 3 months. The Cognitive Behavioral Therapy for Insomnia (CBT-I) protocol - stimulus control therapy, sleep restriction therapy, sleep habit education therapy, relaxation technique and cognitive therapy - applied mobile medical app prescribed by the physician induces cognitive and behavioral changes in patients by providing insomnia education and real-time feedback and behavioral intervention programs for 6 to 9 weeks. This innovative health technology is permitted to be used from June 1, 2023 to May 31, 2026, and re-assessment will be conducted within 7 days after the end of the period of use. This innovative health technology will be implemented at medical institutions that have been notified by the president of the National Evidence-based Healthcare and Collaborating Agency (NECA) to use the technology by the applicant for the innovative health technology assessment. Psychiatrists at these implementation institutions can use this technology.

 3. HIRA Announced a Plan for “A Study on Improving the System of Waiving Drug Economic Evaluation Evidence Submissions”

On February 22, 2023, the Health Insurance Review and Assessment Service (HIRA) announced a plan for “a study on improving the system of waiving drug economic evaluation evidence submissions”.[3] Drugs with excellent therapeutic and economic value are selected through the 'Positive List System' and listed on the National Health Insurance (NHI). Clinical usefulness, cost-effectiveness such as economic evaluation results, and impact on NHI finances are comprehensively considered when evaluating the eligibility for medical care benefit. Apart from cost-effectiveness verification, other circumstances can also support positive listing, including structural limitations in producing required evidence to improve patient access of anticancer drugs or rare disease treatments, or the submission of economic evaluation evidence is waived. Recently, as expensive new drugs, including one-shot treatments such as Kymriah (360 million Korean won (276,923 USD per dose) and Zolgensma (2 billion Korean won (1.54 million USD\ per dose), have been listed without submitting economic evaluation evidence, the needs and concerns for appropriateness of application criteria and follow-up management have been raised. Accordingly, “measures to improve patient access to expensive drugs for severe diseases and strengthen reimbursement management” were reported to the 16th National Health Insurance Policy Deliberation Committee (NHIPDC) in 2022 (July 20, 2022). As it is scheduled to be reflected in the 2nd ‘National Health Insurance Comprehensive Plan’ (2024-2028), it is necessary to come up with rational improvement measures for waiving economic evaluation that can secure patient access and sustainability of NHI simultaneously. The contents of the research revealed by HIRA are as follows:

1) Principles and guiding steps for waiving economic evaluation evidence submission

  • Evaluating the effectiveness of the current system for waiving the submission of economic evaluation evidence
  1. Review of operation progress such as background introduction and revision of the system for waiving the submission of economic evaluation evidence, review of previous studies related to the system and related regulations
  2. Evaluation of effects before and after the introduction of the waiver system (new drug listing rate and duration, cost-effectiveness evaluation method, etc.)
  3. Status of items listed without submission of economic evaluation evidence, progress of expansion of reimbursement criteria after listing, investigation of economic evaluation results in foreign countries, and budget impact analysis through NHI claims data analysis
  • Investigating the landscape of foreign countries' treatment of drugs that are difficult to prove as being cost-effective through economic evaluation
  1. Investigation of domestic economic evaluation submission waiver system and similar system operation cases
  2. Investigation of drug listing and follow-up management system for drugs that are difficult to prove cost effectiveness through economic evaluation
  3.  Investigation of follow-up management methods (performance-based evaluation, financial-based evaluation, etc.) and information collection status (form, method, and operation, etc.)
  • Developing a new and improved system for waiving the submission of economic evaluation evidence
  1. Gathering opinions through interviews with a group of experts targeting various stakeholders (patient advocacy group, medical community, pharmaceutical industry, academia, government, etc.) related to drug listing in NHI
  2. Analyzing strengths and weaknesses of the system
  3. Recommending improvements to meet the operational purpose of the system: review of effectiveness, efficiency, equity between diseases or drugs, prerequisite tasks, etc.

2) Suggestion of a Korean-style management process for drugs that are difficult to prove as being cost effective at the time of listing

Management process upon listing in NHI:

-    Applicable targets: Suggest the priority of criteria requirements, the scope of documents that need review, the type of risk sharing system that needs to be applied, etc.

-    Evaluation amount: Considering the low transparency of foreign drug prices due to the implementation of the risk sharing system, etc., a reasonable baseline for the evaluation amount is presented.

Management process after listing in NHI:

-    Management direction: Review of improvement of the current system (re-evaluation of the expiration of the risk-sharing arrangement, cost-effectiveness evaluation upon expanding the scope of reimbursement, performance-based risk-sharing system per patient, etc.), validation of cost-effectiveness after listing (clinical trial follow-up results, data collection, and evaluation results in foreign countries, etc.) and presentation of specific methodology for evaluation

-    Drug price management: Suggest a mechanism for managing the evaluation amount at the time of listing

3) Expected effect

It is anticipated that the above plan will lead to improved patient access to new drugs and help secure financial soundness of the NHI.





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