Global Market: South Korea

Population (24’): 52 million GDP per Capital (24’): $ 36,238.64

Life Expectancy: 83.43 yrs Currency: won

MedTech Maturity level: Mature

Population Dynamics: Aging, Low birth rate

Health System Structure

• Governance model: Universal health Single payer system (NHI)

• Coverage model: NHI about 97% of its population and the remaining 3% are covered by the Medical Aid program

Reimbursement Environment

• Reimbursement mechanisms: Reimbursement application should be submitted to MOHW or HIRA within 30days of MFDS approval (regulatory approval process). South Korea uses both fee‑for‑service and a Diagnosis‑Related Group (DRG) payment system, but the DRG model is applied only to seven specific disease groups. This narrow scope limits how broadly DRG‑based reimbursement can be used for medical devices. Reimbursement application dossier typically includes strong cost-effectiveness evidence, foreign and domestic utilization documents and supporting reports from literature and others. Note that any “first of its kind or without an existing code” device must go through HTA first before applying for reimbursement.

• HTA maturity: Mature- The National Evidence-based Healthcare Collaboration Agency (NECA). Via the nHTA, NECA categorizes medical technology to determine their eligibility for health insurance review. They do this by conducting a systematic review of safety and effectiveness of non-pharmaceutical technology.

  HIRA then reviews evidence submitted by manufacturers to assess the device’s value for reimbursement, and subsequently recommend a price to MOHW. For this evaluation HIRA looks at clinical, RWE and patient outcomes such as quality of life. Based on their assessment and reference pricing, HIRA will recommend a reimbursement price to MoHW.

  Innovative technology with limited supporting evidence could receive conditional approval with recognition for it’s potential value. During this period, additional evidence is gathered and the product may receives partial or no reimbursement.

  Note that throughout the product lifecycle, technologies undergo periodic reassessment to support efficient use of healthcare resources, strengthen the evidence base for demonstrated value, and verify safety and effectiveness outcomes that were not fully established at launch

• Pricing controls: Pricing and reimbursement are tightly managed by HIRA and NHIS, which regulate both through continuous assessment and reassessment of medical devices

• Time to reimbursement: Product reimbursment approval take about 6 months

• Reimbursement System: Functional category system

Value Drivers for Medical Technology

• Clinical and Economic evidence expectations: High. It is essential to demonstrate the device’s economic value through locally relevant budget impact and cost‑effectiveness analyses, and clinical evidence will play a key role in determining the appropriate reimbursement price

• Innovation appetite: High with an emphasis on Research and Development investments

• Local manufacturing incentives: The Korean government is extremely supportive of local manufactures looking to expand globally

Population & Demographic Baseline

• Population size: 52 million

• Age distribution: 20% aged 65+

• Healthcare spending per capital (23’): $5,350.07

Economic Standing

Past

• GDP growth patterns: moderate growth, averaging 2-3% annually

• Healthcare spending as % of GDP (16’): KRW 125.2 million, 7.7%

Present

• Current GDP and stability (26’): 1.961 trillion, expected to rebound to 1.8 - 1.9%

• Healthcare budget priorities: Key priorities include optimizing resource use, advancing preventative health strategies, and accelerating investment in next‑generation technologies.

Future

• Demographic pressure scenarios: Longer lifespans and declining births are increasing pressure on Korea’s healthcare budget

• Expected Policy changes: We expect continuous fiscal reforms measures to support age-related spending,workforce policy changes,a focus on healthcare resource allocation and reforms on raising additional revenue

Regional Opportunity & Risk Summary

• Market attractiveness drivers: Korea is a prime destination for US medical technology manufacturers. The commercial services in Korea will assist companies in connecting/ identifying local business partners.
  

• Key barriers to product entry:

  • A local partner: manufacturers looking to enter the Korean market require partnership with a local importer and or representative to manage medical technology approval and regulatory compliance

  • Approval: Beyond seeking reimbursement, there is a new Health Technology Assessment system and new regulation requiring device registration every 5yrs.
    

Strategic Market Entry Recommendations

• Build strong local partnerships. A capable importer or in‑country representative is essential, and an influential KOL can help drive premium reimbursement or support the creation of a new category

• Peer reviewed clinical and economic evidence that aligns with local contest. These outputs should showcase product clinical superiority over those already listed in for reimbursement

• While South Korea, Japan, and Taiwan rely on similar reimbursement mechanisms, each defines value differently. Stay alert to changes in alignment to inform your market access approach

IIn conclusion, South Korea remains a high value market for foreign manufacturers. Companies looking to enter this market should account for the government pricing and reimbursement policies and account for future cost containment measures.