We report and analyze the Korean physicians` recent general strike over the implementation of the Separation of Prescribing and Dispensing Practice (SPDP) in which more than 18,000 private clinics and 280 hospitals participated. Utilizing game-theoretic models of bargaining we explain why the Korean physicians were so succesfu1 in organizing intense collective action against the government and securing very favorable policy outcomes. In particular, we highlight the role of distributional conflict among social actors in shaping the details of institutional reform. The introduction of the SPDP was a necessary first step in the overall reform of health care system in Korea. However, the SPDP was perceived to be a serious threat to the economic viability of their profession by the vast majority of Korean physicians who had long been relied on the profits from selling medicines to compensate for the loss of income due to the low service fee under the previous health care system. The strong political coalition among heterogeneous physicians enabled them to organize an intense form of collective action, the general strike. Thus, physicians were successful not only in dragging the government to a bargaining table, but also winning in the bargaining and securing an outcome vastly favorable to them. On the other hand, the lack of an overall reform plan in the health care policy area, especially the finance of the National Health Insurance and the need for maintaining an image as a successful reform initiator, motivated the government to reach a quick resolution with the striking physicians.