Before the recent pharmaceutical reform in Korea that mandates the separation of drug prescribing and dispensing, physicians and pharmacists both prescribed and dispensed drugs, resulting in the overuse and misuse of drugs. The pharmaceutical reform attempts to change the provider's economic incentives by eliminating the providers' profit from drugs that have been a major source of their income. It also influences the pharmaceutical industry that has thrived on offering high margins to physicians rather than on producing high-quality drugs. However, physician strikes forced the government to modify some critical elements of the reform package and to raise medical fees substantially to compensate for the income loss of physicians. Lack of a strategic plan of implementation, failure to appreciate the change in the paradigm of health policy process, and failure to convince consumers of the benefits of the reform, are the major reasons that the historic reform of the separation of drug prescribing and dispensing has resulted in greater social cost than expected.