Determinants of Growth in Prescription Drug Spending Using 2010-2019 Health Insurance Claims Data

Background: Despite policies to manage prescription drug spending and ensure accessibility, prescription drug spending has continued to increase in South Korea. Using nationwide claims data, this study analyzed trends in total pharmaceutical expenditures and pharmaceutical expenditures by drug classification. Methods: We conducted a retrospective population-based study using the Korean National Health Insurance claims database from January 2010 through December 2019. Pharmaceuticals were categorized as new drugs, continued drugs, and abandoned drugs. Prescription drug spending was calculated using the components of price and quantity for individual products in successive two-year periods, to obviate the need to consider changes over time. Results: Total pharmaceutical expenditures increased by 54.2% from 2010 to 2019 (from USD 11.3 billion to USD 17.4 billion). The average annual growth rate was 4.9% overall (the 4% rate for continued drugs was decomposed into -3.5% for the price of drugs, 8.0% for the quantity of drugs, and -0.5% for mixed effects, a measure of changes in drug treatment patterns). The trends were generally consistent. Particularly sharp increases in expenditures were found for groups L (antineoplastic and immunomodulating agents), C (cardiovascular system drugs), and A (alimentary tract and metabolism drugs). Conclusions: Since increased prescription drug spending was primarily driven by an increase in the quantity of drugs used, consumer-focused policies to reduce drug use are necessary.