Do Free Trade Agreements Matter to Drug Lag? Recent Evidence From Korea After the Korea–U.S. Free Trade Agreement

Abstract

The KORUS FTA includes various clauses on marketing approval of new medicines and their reimbursement decisions. We aim to capture the availability of new medicines, to measure drug lags for new medicines, and to demonstrate the effect of the KORUS FTA on the timely availability of new medicines in the Korean market. We selected new drug applications approved in the United States between 2007 and 2015, calculated the drug lag, which was defined as the time difference between the date of regulatory approval in the United States and in Korea, and constructed a logistic and Cox model to capture the effect of the variables of interest on the availability and drug lag of new medicines in the Korean market. The FDA in the United States approved 160 NDAs between 2007 and 2015. The KORUS FTA does not increase the availability of new medicines or shorten the drug lag of new medicines. However, the presence of the manufacturer in Korea was significantly related to the availability and drug lag in the Korean market. It is noteworthy that the presence of the manufacturer, which is a kind of by-product of free trade in pharmaceuticals, affected drug lag.