New Drug Expenditure by Therapeutic Area in South Korea: International Comparison and Policy Implications

Background: Pharmaceutical expenditures serve as key indicators of healthcare system efficiency, innovation, and sustainability. South Korea has implemented policies such as the economic evaluation exemption (EEE) and risk-sharing agreements (RSAs) to balance cost control and access to innovative therapies. However, discrepancies persist in the distribution of expenditures across therapeutic areas, raising concerns about alignment with public health needs. Methods: This retrospective observational study analyzed pharmaceutical expenditures in South Korea from 2007 to 2022, focusing on new chemical entities (NCEs). Data sources included the IQVIA MIDAS Global Database, the WHO Global Burden of Disease (GBD) database, and South Korea’s national health insurance records. Expenditure patterns were benchmarked against OECD and A8 countries using disability-adjusted life years (DALYs) and other healthcare metrics to assess the relationship between spending and disease burden. Results: By 2022, South Korea had introduced 276 NCEs, demonstrating progress, but still lagging the OECD average. NCE expenditure increased from 10.0% to 16.0% of total pharmaceutical spending between 2017 and 2022, whereas A8 countries’ share rose from 26.2% to 48.1%. While oncology expenditures were proportionate to disease burden, spending on chronic diseases such as musculoskeletal and cardiovascular conditions remained relatively low compared to their DALY contributions. Conclusions: Although South Korea has strengthened its investment in pharmaceutical innovation, disparities in expenditure distribution persist. Refining policies to enhance resource allocation for chronic diseases and expanding the RSA framework beyond oncology could improve equity and sustainability. Adopting international best practices—such as indication-based pricing and funding mechanisms for high-cost therapies—may further support optimal pharmaceutical expenditure management.