The long-simmering debate over “Generic Name Prescription,” a policy where doctors prescribe a medication by its active ingredient, or International Nonproprietary Name (INN), rather than a specific brand name, has been reignited in South Korea. The recent remark by Minister of Health and Welfare, Jeong Eun-kyung, suggesting the government is “considering measures to allow generic name prescriptions to a certain extent,” has thrust the contentious issue back into the national spotlight. While the standard practice in Korea remains brand-name prescribing, this potential shift is sparking intense debate, pitting the promise of significant cost reduction and patient autonomy against serious concerns over drug safety and the stability of the domestic pharmaceutical industry.
The case for change, expanding choice and cutting costs
Proponents argue that transitioning to generic name prescriptions is a necessary step towards a more cost-efficient and patient-centered healthcare system. The primary appeal lies in financial savings. When a prescription specifies only the active ingredient, pharmacists are free to select from multiple equivalent generic products. This competition forces drug manufacturers to lower prices, directly benefiting the national health insurance fund and the patient. Data from the Health Insurance Review & Assessment Service supports this, indicating that prices can drop by up to 40% compared to the original brand when five or more generics compete in the market. Beyond lowering costs, a system that encourages fair competition also provides opportunities for small and mid-sized pharmaceutical companies to enter the market, stimulating innovation and contributing to the long-term development of the domestic pharmaceutical industry. For patients with chronic illnesses requiring long-term medication, this reduction is crucial for improving treatment adherence and therapeutic outcomes.
Furthermore, the system empowers the patient by giving them the right to choose a product based on price or brand convenience at the pharmacy, moving away from dispensing policies dictated by specific hospitals or pharmaceutical companies. It also enhances drug safety by clarifying the active ingredients a patient is taking, helping to prevent the unintentional duplication of medication, a risk posed by the proliferation of many brand names for the same compound.
Safety concerns and industry stability
Opponents, chiefly drawn from the medical community and the pharmaceutical industry, raise red flags centered on patient safety and the economic fallout for domestic drug development. The foremost concern is patient safety and the issue of bioequivalence (BE). While all generics must pass rigorous BE testing to prove they deliver the same amount of active ingredient to the bloodstream as the original drug, physicians caution that statistical equivalence is not always clinical equivalence. Differences in excipients, formulation, or minor variations in absorption rates can lead to clinical variations in efficacy or side effects for certain sensitive patients. This risk is particularly acute for Narrow Therapeutic Index drugs and complex extended-release formulations, where even slight differences in drug release speed can have severe consequences. Opponents argue that requiring a doctor to select a specific brand ensures they choose a product precisely tailored to the patient’s clinical characteristics.
Economically, the pharmaceutical industry warns that a mandate for fierce price competition will undermine R&D investment. Many small and mid-sized Korean drug makers rely on the profits from early-entry generics to fund their research and maintain operations. Aggressively driving down generic prices could destabilize this revenue stream, leading to an overall decline in domestic pharmaceutical innovation, a concern previously noted in other markets that mandated similar policies. In addition, opponents worry about the difficulty of assigning legal liability for side effects if the pharmacist, not the physician, makes the final product selection.
Lessons from abroad, the need for customized safeguards
International experience shows that success depends not only on adopting policies, but first on ensuring strong safety policies, accompanied by robust complementary measures. Countries that have successfully embraced generic prescribing maintain critical safety valves. The United Kingdom, with its high generic prescription rate, still permits brand-name prescribing for specialized products like extended-release drugs where safety is paramount. Germany employs a “pharmaceutical concerns” system, granting pharmacists the right to refuse generic substitution if clinical justification warrants it. Meanwhile, Japan has broadened generic use alongside systems like the “Pharmaceutical Adverse Reaction Relief System” to ensure patients receive compensation for side effects. Furthermore, legal precedents like the U.S. Supreme Court rulings in PLIVA v. Mensing (2011) and Mutual Pharmaceutical Co. v. Bartlett (2013), which limit the liability of generic manufacturers by upholding the federal mandate that their labels must be identical to the brand-name product, provide important legal reference points for South Korea as it grapples with defining accountability.
The proposal for generic name prescriptions embodies a complex trade-off: cost efficiency and patient empowerment versus drug safety and industry viability. The government’s renewed interest highlights the urgent need for structural reform to secure the sustainability of the national health insurance system. However, a successful outcome requires moving beyond the current conflict between physicians and pharmacists. It demands a rational consensus that prioritizes public health. The key to successful implementation in South Korea lies in developing a customized national model, one that likely introduces the policy selectively while simultaneously establishing clear safety exception clauses for complex medications and a transparent legal framework for liability and patient compensation. The challenge now is whether stakeholders can collaboratively devise practical solutions that serve patient interests without sacrificing the quality and safety of healthcare.