As medical technology keeps progressing, new medicines keep flooding into the market, among them an increasing number of drugs with significant therapeutic benefit in treating rare diseases and serious conditions like cancer. High-priced specialty medicines, including orphan drugs and anticancer agents, are expected to take up an increasing share of the global pharmaceutical market, from 30 percent in 2016 to 35 percent in 20211. These specialty drugs will account for a smaller, but still substantial, share of about 20 percent in the pharmaceutical market in Korea in 2021. Many of the new drugs that have been developed of late, high-priced as they represent technological advances over old ones, are likely to place a growing burden on the national pharmaceutical budget. In the US, as a 2015 Lancet article2 notes, the price of new cancer drugs is five-to-ten times higher than it was 15 years ago, with all cancer drugs approved in 2014 being priced at a hefty USD120,000 or above for one-year treatment. In Korea, most of such premium-priced new drugs have been approved with high reimbursement rates. The prices and reimbursement levels of drugs are determined based in general on listing agreements and price negotiation. However, reimbursement decisions concerning the rising number of high-priced new drugs often involve non-standard arrangements such as risk-sharing and exemption from economic evaluation, making regulatory decision-making increasingly difficult.