Lessons from Korea’s pharmaceutical policy reform: the separation of medical institutions and pharmacies for outpatient care

Abstract

In Korea, until recently, both physicians and pharmacists were allowed to prescribe and dispense drugs for outpatient care. Along with other deep-rooted structural problems, this worked against the quality and efficiency of the health care system. To rectify this problem, the Korean government launched a drug policy reform in July 2000. However, the drug policy reform was more drastic than initially intended—driven by political factors, the reform ended up bringing about complete separation of medical institutions and pharmacies. Also, unlike in many other countries, Korea did not take a gradual approach, but instead, it implemented the reform all at once and nation-wide. As a result, the reform has faced criticism and protests, thereby generating unprecedented social turmoil and even strikes by physicians. Still, it is not clear what benefits Korea gained from this reform, when we look at the price which has had to be paid, including greater inconvenience, worsened access to medical care, increased drug spending, increased market share for multinational drug producers, and a greater deficit in the budget of the Korea’s national health insurance system. Based on Korea’s costly experience, we attempt to draw some policy implications for the future development of a better health care system.