Outpatient Rx mkt growth slows amid reimbursement curbs and price cuts

Q1 outpatient prescription market reaches KRW 5.3484 trillion… third-largest ever

Lowest Q1 growth rate in five years since 2021

New technologies expand market, but price cuts and reimbursement restrictions suppress growth

The outpatient prescription market has shown steady performance this year. Analysts attribute this to a steady stream of flu patients and the expansion of insurance coverage for medications utilizing new technologies, such as oral anticancer drugs, which have spurred growth in the outpatient prescription market. However, the growth rate has slowed compared to previous years, partly due to reimbursement restrictions and drug price cuts.

According to the pharmaceutical research institution UBIST on the 29th, the outpatient prescription market reached KRW 5.3484 trillion in Q1, a 3.5% increase year-on-year. This marks the third-largest quarterly market size on record, following Q3 and Q4 last year.

Quarterly outpatient prescription volume (Unit: KRW 100 million, Source: UBIST)

The outpatient prescription market has steadily expanded over time, growing 40.1% over five years from KRW 3.8173 trillion in Q1 2021.

Following the COVID-19 endemic transition, persistent influenza and respiratory illness cases have sustained market growth. The Korea Disease Control and Prevention Agency reported that influenza alerts were issued continuously from January through last month, exceeding the epidemic threshold. For six months starting from Week 40 of last year (September 29–October 5), the incidence rate exceeded the seasonal epidemic threshold for the 2025–2026 season, 9.1 cases per 10,000 people.

Proportion of Influenza-like Illness patient rates for the 2025–2026 season (Unit: Persons; Source: Korea Disease Control and Prevention Agency).

Even without extraordinary factors like pandemics, the outpatient market is structurally set to grow due to aging populations and increasing chronic disease prevalence.

Recently, expanded insurance coverage for innovative therapies has further driven market growth.

For instance, AstraZeneca’s anticancer drug Tagrisso recorded KRW 54.2 billion in outpatient prescriptions in Q1, a 26.2% increase year-on-year. Tagrisso is used for EGFR-mutated metastatic non-small cell lung cancer (NSCLC). Since 2024, its reimbursement has expanded alongside Yuhan’s Leclaza for first-line treatment of certain mutation-positive NSCLC.

Although anticancer drugs are typically used more in inpatient settings, Tagrisso’s oral formulation has significantly boosted outpatient prescriptions. Its outpatient sales more than doubled from KRW 22.7 billion in Q1 2023 to current levels. Leclaza also saw Q1 prescriptions reach KRW 19.1 billion, more than tripling in three years.

However, Q1 growth appears to have slowed somewhat compared to previous years. This marks the lowest growth rate in five years, following a 2.9% year-over-year increase in prescription sales in Q1 of 2021. The outpatient prescription market grew by 10.9% year-over-year in Q1 2022 and expanded by 9.9% in Q1 2023. In Q1 2024 and last year, the market grew by 5.5% and 5.3% year-on-year, respectively. The strong upward trend continued as infectious disease patients continued to emerge amid the COVID-19 pandemic and endemic phase.

Government drug pricing policies are cited as a major factor. Repeated reimbursement restrictions and price cuts have dampened market expansion.

For example, the brain function enhancer choline alfoscerate market shrank from KRW 146.2 billion in Q1 last year to KRW 103 billion this year, a 29.5% drop in one year.

Since September 21st, the patient co-insurance rate has increased from 30% to 80% for non-diagnosed patients, sharply reducing prescriptions. In Q4 last year, the prescription market for choline preparations stood at KRW 103.7 billion, a 29.9% decrease from the previous quarter’s KRW 147.9 billion, and remained at a similar level in Q1 this year. This means that over the past six months, the prescription market for choline preparations has shrunk by more than KRW 90 billion due to the reimbursement cut.

In Q1, the outpatient prescription market for mugwort extract-based drugs stood at KRW 25.3 billion, a 18.7% decrease year-on-year. Mugwort extract-based drugs are natural medicines made from mugwort and are used to improve gastric mucosal lesions, bleeding, redness, and swelling associated with acute and chronic gastritis. Following the government’s reimbursement reevaluation, the insurance price ceiling for 74 types of mugwort extract-based medicines was reduced by an average of 14.3% starting in February, causing the prescription market to contract.

Unexpected variables also impact the market. The COVID-19 drug Paxlovid recorded KRW 47.7 billion in prescription sales in Q3 last year, but this figure shrank to KRW 2.1 billion in Q1 this year. Paxlovid is primarily prescribed to high-risk patients at risk of severe progression. Initially, the government purchased and supplied it free of charge, but in June 2024, the government halted the supply of new batches, shifting to regular prescriptions through general medical institutions.

With the decision on Paxlovid’s health insurance reimbursement in October 2024, it officially entered the prescription market. The reimbursement price was set at KRW 941,940, with a 5% co-insurance rate. Due to the fluctuating number of COVID-19 patients and Paxlovid’s high price, there was significant variation in prescription volume. Paxlovid’s prescription sales of KRW 47.7 billion in Q3 last year accounted for 0.9% of total outpatient prescription sales.