Background: The South Korean government instituted a new policy, the separation of prescribing and dispensing (SPD) of medications, on July 1, 2000, to provide greater differentiation between the roles of physicians and pharmacists than had historically existed in South Korea. It was hoped that this policy would promote the rational use of medications and reduce medication expenditures, which accounted for approximately 30% of the total health care expenditures before the implementation of SPD.
Objective: The purpose of this study was to assess the effects of SPD on drug market share and expenditures for branded and generic medications by comparing the use of and expenditures for peptic-ulcer medications before and after the implementation of SPD.
Methods: Data on expenditures and quantity of use in January and December 2000 (in terms of defined daily dose [DDD]) of peptic-ulcer medications were obtained from the Korean National Health Insurance claims database. These data were derived using a 3-stage probability sample of prescription data from medical clinics in South Korea.
Results: The number of prescription drug claims for peptic-ulcer drugs increased by 13.9% after the introduction of SPD. Medication expenditures increased by 98.4% for peptic-ulcer medications. The use of more expensive drugs and branded products, even when generic products were available, accounted for most of this increase. In particular, the use of branded ranitidine 150 mg (measured by DDD) increased from 6.3% of the market share before SPD to 27.6% of the market share after the implementation of SPD.
Conclusions: The implementation of SPD increased both prescription drug claims and expenditures for peptic-ulcer medications. A principal factor contributing to the increase in expenditures was the use of branded medications.