Factors Contributing to Increases in Prescription Drug Expenditures Borne by National Health Insurance in South Korea

PURPOSE: Rapid growth of prescription drug expenditures is a problem in South Korea. The objective of this study was to assess the contributions of four variables (therapeutic choice, drug-mix, original use, and price changes) to increases in drug expenditures paid by the National Health Insurance (NHI) in Korea. MATERIALS AND METHODS: A retrospective cohort study was conducted between January 1, 2008 and June 30, 2012 utilizing data from the NHI Claims Database of the Health Insurance Review and Assessment Service. The number of target drug types for final analysis was 13959. To analyze the growth rates of drug expenditures, this study used Fisher ideal index and the Laspeyres and Paasche indexes. RESULTS: With the exception of 2012, therapeutic choice contributed to about 40–60% of the increase in drug expenditures every year, while drug-mix contributed to another 30–40%. CONCLUSION: The rapid growth in prescription drug expenditure was found to be largely due to drug-mix and therapeutic choice over time. Original use had little impact on drug spending.