Report on Health Insurance (1)
Money paid for pharmaceutical products out of the national health insurance program increased strikingly in 2005, to W7,228.9 billion from W4,180.4 billion in 2001. That is 2.1 times a greater increase than in other Organisation of Economic Cooperation and Development (OECD) nations. Could it be that Koreans like drugs too much? The biggest problem is there is a serious hole in the system for managing pharmaceutical prices. Here the Hankyoreh considers the reasons prices are rising and issues related to the illegal "lobbying" activities of pharmaceutical companies. The experts share the opinion that the biggest problem is the way prices are determined. The government and the National Health Insurance Corporation share this view as well. Are prices decided properly? In the case of innovative new drugs like the anti-cancer medicine Gleevec, the price is decided based upon that of seven advanced nations, the U.S., Japan, France, Germany, England, Italy and Switzerland. The problem is whether the price in those nations is appropriate. Prices decided by a book?American prices are not what are used locally. It is a price in name only, recorded in something called a "Red Book." Naturally, the market price is lower. That being the case, many observers suggest that the U.S. should be excluded from the seven nations. No provision for using inexpensive locally produced versions Currently the system decides the price of copied products in the order by which they appear, and not according to effectiveness. When a domestic company develops a local version of a pharmaceutical product, its price is less than that of the original. The problem is that until the drug is copied five times using same ingredients, the price has to be under 80 percent of the original, even if one among them is actually more effective. Therefore, pharmaceutical firms focus on marketing instead of quality improvement through research and development. The system promotes excessive drug use Internal Ministry of Health and Welfare documents cite a "steep increase in pharmaceutical use" as one of the key reasons that more national health insurance money is being paid for drugs. An ageing population, one that suffers from high blood pressure or diabetes, is an important reason, but it cannot explain the phenomenon. Even after the legally stipulated prohibition on overlapping areas of the medical and pharmaceutical professions, there remain various other problems, such as an unfair supply system and a mindset among members of the public that makes people overly dependent on drugs for maintaining their health. Kim Yang-jung, Hankyoreh medical expert himtrain@hani.co.kr
