Medical Device Reimbursement Coverage and Pricing Rules in Korea: Current Practice and Issues with Access to Innovation

Abstract

The development of health funding policy in Korea has followed the country’s rapid economic development, with a comprehensive National Health Insurance (NHI) system in place by 1989. The funding of medical devices has followed this progression, with incorporation into the NHI reimbursement system in 2000 (several years later than pharmaceuticals), but important issues affecting patient access remain. Although the effect of devices on the NHI budget is relatively modest (only about 4%), because of concerns about NHI sustainability, attention has increasingly been paid to their management and funding. Unlike pharmaceuticals, however, it has been quite challenging to develop clear and fair criteria for reimbursement coverage and pricing of medical devices. The two key and longstanding issues around the reimbursement of medical devices in Korea are how to expedite market entry of improved or innovative medical devices at appropriate prices, and how to satisfactorily lower the reimbursement levels of older devices, thereby making headroom for new technologies to be reimbursed. Despite protracted discussions over the last decade, industry and government have been unable to reach full agreement. There has been some progress (e.g., introduction of the Value Appraisal and the Revaluation Systems), but there remains urgent need for productive discussion and consensus between government and industry regarding reasonable funding rules, transparency, and clarity in the reimbursement pricing process for medical devices.