Korea operates one of the most tightly managed drug pricing systems in the Asia-Pacific region. Since adopting a “positive list system” in 2006, the country has required every new drug to prove its value before it can be listed on the National Health Insurance (NHI) formulary. This is a marked departure from the negative-list approach used previously, under which nearly all approved drugs were automatically reimbursed. Nearly two decades later, that system is undergoing a major overhaul as Korean regulators try to balance cost control with growing pressure to speed up patient access to innovative therapies.

The Agencies and Process

Drug reimbursement in Korea runs through a two-agency structure. The Health Insurance Review and Assessment Service (HIRA) evaluates a drug’s clinical and economic value through its Drug Reimbursement Evaluation Committee, which reviews cost-effectiveness data and comparative clinical evidence. The National Health Insurance Service (NHIS) then negotiates the actual reimbursement price with the manufacturer.

For most new drugs, this means a manufacturer must first secure Ministry of Food and Drug Safety (MFDS) marketing approval, then submit a pharmacoeconomic (PE) evaluation to HIRA demonstrating cost-effectiveness relative to existing treatments. If HIRA finds the drug cost-effective, the application moves to NHIS for price negotiation. Pricing is generally set either by demonstrated clinical superiority over comparator drugs or by a weighted-average approach benchmarked against similar products already on the market. Drugs that do not offer meaningful additional benefit are priced at or below existing alternatives.

Not every drug goes through the full PE pathway. Recognizing that formal cost-effectiveness studies can be difficult, Korea has allowed certain new cancer treatments and orphan drugs to bypass the PE evaluation requirement, subject to alternative review criteria. Drugs that are neither cancer treatments nor orphan drugs may be eligible for a price negotiation waiver. These two waiver systems have helped shorten review timelines for high-need products.

Manufacturers have another option for expensive drugs, especially cancer drugs – a Risk-Sharing Agreement. Instead of charging one fixed price, the manufacturer and NHIS agree to adjust the price based on how well the drug actually works once it is in use. This matters most for new drugs where it is challenging to prove value right away.

Falling Reimbursement and Access Delays

For years, industry groups and health policy researchers have flagged two related problems with the Korean drug reimbursement system. First, average reimbursed prices for new drugs have continued to trend downward. Second, the time from marketing approval to reimbursement listing has remained long, which is especially consequential for an aging population with rising demand for advanced, often expensive biologics, cell and gene therapies, and oncology drugs. HIRA itself has publicly acknowledged the strain this puts on access to high-cost drugs.

The 2026 Reform Package

In response to these concerns, Korean regulators are rolling out a set of structural reforms beginning in the second half of 2026, with additional phases through 2028 and beyond.

The first change is a new pricing system starting in June 2026. Many countries set their own drug prices partly by looking at what other countries officially charge (Korea is one of eight reference countries other markets watch). If Korea’s public price is low, other countries use that to push their own prices down too. Under the new system, Korea will let the public list price stay high – as high as other reference countries typically charge. However, the real price, the lower one that NHIS actually pays the manufacturer after negotiating, stays confidential. This way, other countries will not point to a low Korean price and demand the same discount.

The second is a “reimburse first, evaluate later” fast-track pathway for rare disease treatments. Previously, these drugs took an average of 18 months to reach reimbursement after regulatory approval, far slower than in peer markets like Japan and France. The centerpiece of the reform is a new fast-track pathway. It caps the reimbursement listing timeline for rare disease drugs at 100 days, down from as long as 240 days today, by simplifying both the reimbursement review and price negotiation steps. In exchange, authorities will lean more heavily on real-world evidence and outcome data to reassess these therapies after they reach the market.

Practical Implications for Foreign Drug Companies

For foreign pharmaceutical companies, these changes could make Korea a more attractive launch market, especially for high-value innovative drugs. Companies that enter early under the new flexible pricing system may also help set the pricing bar for competitors that follow. At the same time, companies should plan for stronger real-world evidence strategies, as post-market data will increasingly determine whether an expedited reimbursement decision sticks.