Public-private Partnership for Development of Pharmaceutical Industry Contributing to Global Health

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Korea aspiring to transforming itself into one of the top seven pharmaceutical powerhouses

Korea has designated the pharmaceutical industry as one of the future growth engines, In order to foster the industry, the Korean government has been placing emphasis on enhancing growth potential through far-reaching policy measures, ranging from technology innovation to promoting market transparency, boosting global competitiveness of companies, and establishing infrastructure for sustainable development, Moreover, with knowledge and capacity mustered, the government, industry, medical society, and academic community are devoting themselves to make a leap forward into global markets. Under the circumstance where the Korean population has been aging rapidly, the Korean government has keen interest in the pharmaceutical industry, which serves as a foundation for the quality of life of the public, The government introduced “Accreditation of Innovative Pharmaceutical Company” in 2012, and will reinforce its efforts to support the industry every year with a view to reinventing the nation into one of the top seven pharmaceutical titans.

Introduction of Promotion and Support of Innovative Pharmaceutical Company

What Company Can Be an Innovative Pharmaceutical Company?

Special Act on Pharmaceutical Industry Promotion and Support (enacted in March 2011) serves as the legal foundation to designate innovative pharmaceutical companies verified to possess high R&D capacity for new drug development and to be globally competitive, Those companies are expected to play a leading role in developing the domestic pharmaceutical industry into a future growth engine.
In particular, ‘innovative pharmaceutical company’ is the government’s ambitious pharmaceutical industry fostering policy adopted as a concept that refers to a company that has been recognized as having superior capability in new drug development as well as overseas expansion based on the ‘Special Act on Fostering and Supporting the Pharmaceutical Industry’. To scope with the rapid changes in the environment surrounding the pharmaceutical industry, such as during price cuts and effect of the Korea-US FTA, the Ministry of Health and Welfare aims to support the ‘innovative pharmaceutical company’ with research, development and overseas advancement capability as the core of ‘2012 Pharmaceutical Industry Competitiveness Enhancement Plan’, which was arranged together with the related ministries in January 2012, to foster Specialized Pharma which is specialized in specific medical conditions, Global Genenric Pharma which does mass production of generics, or Global Major Pharma which is at the level of advanced multinational corporations. This is a big sketch that government has envisioned.
Above all, ‘innovative pharmaceutical company’ was accepted as a very honorable medal to select the companies that play a leading role in fostering domestic pharmaceutical industry as future growth engine industry. Moreover, ‘innovative pharmaceutical company’ will be the scale to read the will of the government to cultivate the pharmaceutical industry in the future since it is the only carrots proposed by the government, which has consistently been in whipping, including the introduction of the rebate dual punishment system and implementation of the batch drug price cut.

What are the Criteria for Selecting an Innovative Pharmaceutical Company?

In order to be selected as an innovative pharmaceutical company, it was necessary to have a research and development investment or facilities of a certain scale or more. Inother words, the R&D expenditure relative to average gross drug salws in the last 3 years has had to meet the requirements as follows: 1) companies with an annual sales of more than KRW 100 billion would have a R&D cost of at least 5%, 2) companies with less that KRW 100 biliion would have a R&D cost of more that 7% or an absolute amount of more than KRW 5 billion, and 3) for US or EU GMP facilities, a R&D cost relative to sales would be at least 3%.

Accreditation Process

The Accreditation Screening Committee conducted written and verbal evaluations on candidate pharmaceutical firms which met the requirements (Article 2 of the Enforcement Decree of the Special Act: investment volume over a certain level), In the evaluations, the committee assessed candidate companies based on specific requirements, such as R&D performance in the past, company’s capacity, vision and investment plan, ethical business practice, etc, The results of the evaluations delivered by the screening committee were finalized after the review carried out by the Committee for Pharmaceutical Industry Promotion and Support, which is chaired by the Minister of Health and Welfare.

Composition of Designated Innovative Pharmaceutical Companies

  • General pharma firms [31]: 31 leading firms that have marked high scores in terms of R&D investment as well as researchers, manufacturing facilities, patent and license-out, and overseas market advancing plus ten SMEs that have built on expertise in specialized areas such as development of incrementally modified drugs
  • Bio venture companies [9]: firms with relatively low sales but highly competitive technology and creative business models
  • Multinational pharma firms [4]: one local company of an MNC considered outstanding in terms of R&D investment (in early clinical trials), local production performance, overseas market advancing, etc.

List of Companies Certified as Innovative Pharmaceutical Companies [44]

Category, Name of Company
Category Name of Company
General pharma firms [31] Boryung Pharm, Bukwang Pharm, Celltrion, Chong Kun Dang Pharm, Dae Hwa Pharm, Daewon Pharm, Daewoong Pharm, GC Pharma, Handok, Hanlim Pharm, Hanmi Pharm, HK inno.N, Huons, Hyundai Pharm, Ildong Pharm, Isu Abxis, JW Pharm, Kolma Korea, Korea United Pharm, Kuhnil Pharm, LG Chem, Pharma Research Products, Pharmicell, Samjin Pharm, Samyang BioPharm, Shin Poong Pharm, SK Chemicals, ST Pharm, Taejoon Pharm, Yuhan, Yungjin Pharm
Bio venture companies [9] ABL Bio, Alteogen, BC World Pharm, Corestem, CrystalGenomics, Genexine, Helixmith, Medytox, Tego Science
Multinational pharma firms [4] AstraZeneca Korea, Janssen Korea, Korea Otsuka Pharm, Sanofi-Aventis Korea