Health insurance drug costs in South Korea nearly reached 28 trillion won in 2024, and the proportion of drug spending out of total health insurance expenses has slightly increased, standing higher than the OECD average.
According to a report from the National Health Insurance Service, health insurance drug expenditures in South Korea reached nearly 28 trillion won in 2024, marking a 5.6% increase from the previous year's figure. The total health insurance expenses also saw a rise, with drug costs now comprising 23.8% of the overall spending, slightly up from 23.6% the year before. This increase reflects a broader trend in rising health care expenditure, which outpaces the OECD average in terms of pharmaceutical spending as a proportion of health care costs, indicating a potential issue with drug price competition and management in the country.
The report highlights that South Korea's pharmaceutical expenditure as a percentage of total health care spending is higher than the OECD average, which stood at 14.4%. Factors contributing to this increase include an aging population and structural issues affecting drug pricing and usage management. Notably, the top five therapeutic classes account for over 40% of total drug spending, predominantly on cancer treatments and other high-cost medications.
In response to these rising costs, the government is planning reforms to the health insurance drug pricing system. This includes potential price reductions for generic drugs. The upcoming meeting of the Health Insurance Policy Review Committee will address these reforms as part of efforts to secure the sustainability of health insurance finances amidst increasing medical expenditure and demographic challenges in South Korea.
