Do cost containment policies save money and influence physicians' prescribing behavior? Lessons from South Korea's drug policy for diabetes medication

Objective We evaluate the effects of drug price reduction policy on pharmaceutical expenditure and prescription patterns in diabetes medication. Design An interrupted time series study design using generalized estimating equations. Setting This study used National Health Insurance claim data from 2010 to 2013. Participants A total of 68 127 diabetes patients and 12 465 hospitals. Intervention(s) The drug price reduction policy. Main Outcome Measures The primary outcome is pharmaceutical expenditure and prescription rate. To evaluate changes in prescription rate, we measured prescription rates such a brand-name drug and drug price reduction rate. Results Although the drug price reduction policy associated with decreased pharmaceutical expenditure (-13.22%, P < 0.0001), the trend (-0.01%, P = 0.9201) did not change significantly compared with the pre-intervention period. In addition, the trends in the monthly prescription rate of brand-name drugs decreased (-0.14%, P = 0.0091), while the immediate change was an increase (5.72%, P < 0.0001). Regardless of the drug reduction rate, the prescription rate after the introduction of the drug price reduction policy decreased compared with the pre-intervention period, and this decline was significant for reduction rates of 0% (-2.74%, P < 0.0001) and 10% (-0.13%, P = 0.0018). Conclusions Our results provide evidence of the effects of the drug price reduction policy on pharmaceutical expenditure and prescription patterns. This policy did not affect the prescribing behavior of healthcare providers and did not increase the use of drugs not subject to this policy. Although this study did not observe changes in the cost of pharmaceuticals after the introduction of the drug price reduction policy, further research is needed on the long-term changes in such costs.