Potential of Pharmaceutical Industry in Korea

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Potential of pharmaceutical industry in Korea

Aging populations and growing interest in health and welfare continue to drive up the demand for innovative drugs across the world. Globally, R&D spending in the pharmaceutical industry was higher than any other industry (pharmaceutical and bio ranked No. 1 with 150 billion dollars(2015)), indicating that the future industrial structure is shifting from IT to pharmaceutical business.

Pharmaceutical Industry in Korea

In Korean, the value of drugs manufactured in Korea was KRW 18.8 trillion in 2016. The annual average growth rate for the past five years was 4.6 percent. In addition, the size of the pharmaceutical market was KRW 21.7 trillion in 2016.

Size and Market Trends in Pharmaceutical Industry in Korea (Unit: KRW Trillion, %)

Category Production Export Import Balance Market size
2012 157,140 23,409 58,535 35,126 192,266
2013 163,761 23,306 52,789 29,483 193,244
2014 164,194 25,442 54,952 29,510 193,704
2015 169,696 33,348 56,016 22,668 192,364
2016 188,061 36,209 65,404 29,195 217,256
YOY 10.8% 8.6% 16.8% - 12.9%
CAGR('12~'16) 4.6% 11.5% 2.8% - 3.1%
Note
  1. Pharmaceutical products include finished products, narcotic drugs, ultra narcotic, psychotropic substance and drug substance
  2. Numbers in export and import categories are calculated in Korean won and converted US dollar by using annual average exchange rate at Bank of Korea
  3. Market Size = Production - Export + Import
Source
  • Pharmaceutical Industry Statistics, Korea Pharmaceutical Manufacturers Association
  • Facts & Survey Report, Korea Pharmaceutical Traders Association,
  • Korea Health Industry Statistics System

Based on its technological competitiveness and quality drugs, the pharmaceutical industry in Korea has taken a stride in strengthening its ability to develop innovative drugs in a short period of time, including R&D, clinical trials and drug manufacturing. Impressive growth made in the last few years suggests that Korea based pharmaceutical companies are ready to take a leap forward as global players.

[R&D] Development of innovative medicines and strong pipelines across various therapeutic areas

The local pharmaceutical industry began manufacturing both finished products and drug substances in the 1960s, and developed new processes in the 1980s. Following the early phase of drug development in the late 1980s, Korean pharmaceutical industry began to develop innovative drugs in the 2000s. Since then, Korean pharmaceutical industry has been successfully developing one of the most innovative and incrementally modified drugs. Since the introduction of the chemical compound patent system in 1987, the number of innovative drugs introduced in the country has also increased at a very fast pace. Korea has seen development of innovative drugs across various therapeutic areas, from “"Sunpla Injection,”" a treatment for stomach cancer developed by SK Pharmaceuticals in 1999 to “"Invossa”" a treatment for osteoarthritis of the knee developed by Kolon Life Science in 2017. So far, Korean pharmaceutical companies have developed therapies in an array of areas including oncology, antibacterial, gastritis, respiratory infections, duodenal ulcer, diabetic foot ulcer, erectile dysfunction, hepatitis B and hypertension.


Launch of innovative drugs (total of 26)

[Manufacturing] High level of competitiveness and ability to generate rich pipelines of innovative drugs

Pharmaceutical companies in Korea have been working to ensure that their drug manufacturing facilities meet rigorous global standards. To reflect global trends, the guidelines on Good Manufacturing Practices(GMP) changed from dosage forms to prior approval of individual items in 2008. As the guidelines shifted from management of dosage forms to that of individual items based on a step-by-step process through 2010, the quality assurance system for domestically manufactured drugs reached a global level. In addition, Korea has the ability to conduct drug R&D for compounds and commercial technologies, including organic synthesis, agents and global clinical trials. This ability was gained through development of generics and incrementally modified drugs. Korea is also a leader in the pharmaceutical biological technology area. With fruitful results from R&D including development of the world’'s first stem cell therapy and xenotransplantation of pancreatic ducts, Korea is in an advantageous position to be a leader in promising future industries. The level of therapeutic technologies in cardiac surgery and management, and cervical cancer in Korea is the best among other OECD countries, according to OECD Health Data 2009. Korea pharmaceutical industry is shifting its focus from the domestic market to the global market, and the world now pays attention to Korean pharmas as successful partners.

Korean Pharmaceutical Market KRW 22 Trillion(‘16)

  • 1.8% of the World Market(13th)
  • Around 3.1% Average Annual Growth('12~'16)
  • Only 25% MNC dominated (reimbursement price based, '12)
  • 599 manufacturers(353 for finished drugs)

New Drug Release Competency

  • 29 New Drugs, 82 IMD products approved
  • 2~3 New drugs coming out to the market every year

Top Class Bio-Pharma Competency

  • High quality bio products (1st stem cell therapy, 1st biosimilar approved, 21 biosimilar clinical trials undergoing)
  • Stem cell (Clinical trials 2nd, Patent 4th, # of Researcher 5th, SCI Papers 8th in the world)
  • Stable supply of Vaccines
    • Self supply for essential vaccines (self-reliance ratio of vaccines 46%, '16)
    • 5 premium vaccines in Clinical Trials (Phase 1, (PCV, HPV, Rotavirus, Herpes zoster, Cholera))

New Drug Release Competency

  • Total government healthcare R&D : $400M
  • Total government pharm. R&D : $250M
  • Total MoHW pharm. R&D : $130M

Clinical Trial Capability

  • Seoul, the capital of South Korea, ranks 1st for iindustry sponsored clinical trials among all cities worldwide('17)
  • Korea ranked 6th in the world for industry-sponsored clinical trials('17)

World Class GMP &DDS Technology

  • cGMP &EU GMP standard facilities
  • Innovative Drug Delivery Systems
    Film-type Viagra and patch-type Alzheimer's and Parkinson’s drugs
    developed, etc

High Growth in Export

  • '12~'16, 10.7% CAGR for Drug Export
    • US $3,120M export('16)

World Class GMP &DDS Technology

  • Joining PIC/S (’4) and ICH ('16)
  • 23 WHO PQ products(vaccine) developed (’7)
  • Joint worldwide marketing of K-pharma developed drugs with MNCs
    • Boryung’ Kanarb® for hypertension (Fimasartan)
    • Celltrion’ Remsima Inj. (Inflixmab)
    • Hanmi’ Amosartan® for hypertension and
    • Esomezol® for esophageal reflux disease
    • JW’ 3 chamber IV solution
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