Policy Implications of Pharmaceutical Provisions in KORUS FTA on National Health Insurance Scheme
Policy Implications of Pharmaceutical Provisions in KORUS FTA on National Health Insurance Scheme
Pei-kan Yang
ABSTRACT: After concluding a bilateral free trade agreement with Australia (AUSFTA), the U.S. attempted for the second time, in negotiating an FTA with Korea (KORUS), to incorporate trade rules constraining the operation of domestic health insurance program of its trading partner. Unlike the AUSFTA, a separate chapter was spared to prescribe exclusively for pharmaceutical affairs in the KORUS FTA, which may have implications on the operation of Korea’s National Health Insurance program. With a survey of this pharmaceutical chapter in the KORUS FTA and the later-on amendment, this article aims to evaluate policy implications based on the textual and normative comparisons with relevant provisions under the AUSFTA (Annex 2C), the first FTA introducing unprecedented rules to regulate domestic healthcare program, i.e., the Pharmaceutical Benefit Scheme. This article reviews the significance of these provisions by comparing the differences between the KORUS and AUSFTAs, and finds that many pharmaceutical provisions in the KORUS FTA are more comprehensive in scope or more stringent in nature than those in the AUSFTA. These provisions, called Annex 2C-plus provisions have been considered to have either greater impacts on access to affordable medicines or deeper interference on the operation of NHI program in Korea. However, this article finds that the impacts may not be so great either because of the flexible wordings for discretionary implementation or the lacking of key elements of committed obligations. The real impacts may need to be dynamically assessed with the evolution of further implementation of Korea’s commitments in the revised agreement.

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