Potential of Pharmaceutical Industry in Korea

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Potential of pharmaceutical industry in Korea

Korean pharmaceutical market passed the $21 billion mark in 2018. Its growth has been driven by leading Korean companies, which have been releasing new global drugs and achieving technology exports.

Current status of Korean pharmaceutical market

(unit: million dollar, %)

Category - 2014~2018, Year-on-year growth rate, CAGR (‘14~’18)
Category 2014 2015 2016 2017 2018 Year-on-year growth rate CAGR (‘14~’18)
Market size 18,396 16,963 18,712 19,508 21,004 7.70% 3.40%
Production 15,593 14,991 16,198 18,000 19,176 6.50% 5.30%
Exports 2,416 2,946 3,119 4,069 4,673 14.80% 17.90%
Imports 5,219 4,918 5,633 5,577 6,501 16.60% 5.60%
Trade balance △ 2,803 △ 1,972 △ 2,514 △ 1,508 △ 1,828 △ 21.2% △10.1%

Source: Press release by the Ministry of Food and Drug Safety (July 29 2019)

  • The 2018 sales revenue of the listed drug companies (125) is $18,172 million in total (7.5% up from the previous year), with Top 10’s revenue at $7,814 million (8.6%↑). * '18 sales revenue (based on consolidated financial statements) : (Yuhan Corporation) $1,362 million, (Korea Kolmar) $1,181 million, (GC Green Cross) $1,181 million, (Guangdong Pharmaceutical) $1,090 million, (Daewoong Pharmaceutical) $908 million, (Hanmi Pharm) $908 million

    4 domestic companies are among the top 150 pharmaceutical companies in the world based on prescription drug sales.

    * '18 prescription drug sales and global ranking (Evaluate 2019): Daewoong Pharmaceutical (111th, $ 844 million), Hanmi Pharmaceutical (119th, $ 773 million), Yuhan Corporation (122th, $ 762 million), Green Cross (139th, $ 563 million)
  • The Korean biologics market is valued around $2,026 million (2018), accounting for 10.2% of the entire pharmaceutical market, which is lower than the international level (28.2% in 2018).
    • Yet it has very high growth potential, with its production and export values rising greatly at a CAGR of 4.3% and 4.6% respectively, for the last five years (2014-2018).
    • In particular, the biopharmaceutical trade balance has been surplus for four consecutive years following 2015 year due to the increase in exports.
    • Biosimilars in particular are expected to become a next-generation growth engine as 15 of the 20 drugs approved in Korea were developed by Korean companies. * With the focus on biopharmaceutical pharmaceutical companies such as Samsung Biologics and Celltrion, the world's largest biopharmaceutical production facility is being built and in operation (production capacity of 560,000L, more than 70 companies)

Current status of Korean biopharmaceutical market

(unit: million dollar, %)

Category - 2014~2018, Year-on-year growth rate, CAGR (‘14~’18)
Category 2014 2015 2016 2017 2018 Year-on-year growth rate CAGR (‘14~’18)
Market size 1,885 1,449 1,577 1,974 2,026 2.60% 2.40%
Production 1,597 1,520 1,729 2,300 2,372 3.10% 4.30%
Exports 589 809 1,063 1,368 1,559 14.00% 4.60%
Imports 877 738 911 1,042 1,213 16.40% 3.30%
Trade balance △ 288 71 152 326 345 5.80% -

Source: Press release by the Ministry of Food and Drug Safety

Current status of Korean pharmaceutical companies

(Current status of businesses) 571 (72%) of 798 pharmaceutical companies in Korea reported production records for 2018, indicating an average production of 45 items per company.

(unit: number, %)

Category - 2014~2018, CAGR (‘14~’18)
Category 2014 2015 2016 2017 2018 CAGR (‘14~’18)
Number of manufacturers 851 782 845 806 798 △ 1.6
Manufacturers with production records 678 597 599 588 571 △ 4.2
Number of items total 29,218 25,890 26,397 26,293 25,939 △  2.9
Drug Product 18,357 17,907 18,546 19,291 19,239 1.18
Drug substance 10,861 7,983 7,851 7,002 6,700 △ 11.4
Number of sellers 23,261 24,693 25,862 24,951 26,233 3.1

Source: Press release by the Ministry of Food and Drug Safety

R&D investment of major Korean pharmaceutical companies

(Current status of R&D) Striving to enhance competitiveness to the level of advanced countries by launching new drugs developed in Korea in overseas markets through the continuous expansion of R&D investments

  • The total R&D investment by the pharmaceutical companies listed in Korea (125 companies) was $1,423 million in 2018, which accounts for 7.7% of the total sales.
    • The R&D investment by the top 10 companies was $787 million, which is more than half of the total amount of R&D investment by all the listed pharmaceutical companies, reaching 10.0% of the total sales.
    • The total R&D expenditure of domestic listed innovative pharmaceutical companies (37 companies) accounted for 74% of total listed companies and the proportion of R&D expenses was 9.3%.

(unit: million dollar, %)

Category - 2014~2018
Category 2014 2015 2016 2017 2018
R&D investment Listed companies 932 975 1,152 1,394 1,423
Top 10 companies 510 557 712 798 787
Innovative Pharmaceutical Company 744 798 932 1,125 1,059
Ratio to sales Listed companies 7.0% 7.1% 7.8% 8.3% 7.7%
Top 10 companies 10.6% 10.2% 12.1% 11.1% 10.0%
Innovative Pharmaceutical Company 8.6% 8.6% 9.5% 10.7% 9.3%

Source: Press release by the Ministry of Food and Drug Safety

  • Due to the increase in the elderly population and chronic diseases, the biopharmaceutical industry, such as cell therapies and gene therapies, continues to expand due to the growing demand for medicines.
    • It is expected that the number of licenses will increase after the establishment of the conditional approval system with 15 items of domestic cell therapies approved by Sewon Cellontech's 'Condron' ('01') until '18. * It is a new permit system for cell therapy products for the treatment of life-threatening diseases or severe irreversible diseases (Press release by the Ministry of Food and Drug Safety, July 2016).
    • Currently, 7 in stem cell therapies of all items have been released worldwide, of which 4 are developed domestically. * (Pharmicell) Hearticellgram-AMI, (Medipost) Cartistem, (Antrogen) Cupistem, (Corestem) Neuronata-R

R&D investment of major Korean pharmaceutical companies

(Current status of new drug development) A total of 29 new drugs were developed as of December 2019 by these efforts of Korean pharmaceutical companies. * 1999-2014: 21 new Korean drugs were developed → 2015-2018: 8 new Korean drugs were developed.

Company, Product, Efficacy/Effectiveness, Approval Date
Company Product Efficacy/Effectiveness Approval Date
Crystal Genomics Inc. Acelex Capsule Treatment for osteoarthritis 05-Feb-15
DongWha Pharm. Co., Ltd. Zabolante tablet Antimicrobial agent (antibiotics) 20-Mar-15
Dong-A ST Co., Ltd. Sivextro tablet Antimicrobial agent (antibiotics) 17-Apr-15
Sivextro injection
Dong-A ST Co., Ltd. Suganon tablet Antidiabetic drug 02-Oct-15
Hanmi Pharmaceutical Co., Ltd. Olita tablet Cancer drug (lung cancer) 13-May-16
Ildong Pharmaceutical Co., Ltd. Besivo tablet Hepatitis B treatment 15-May-17
CJ Healthcare K-Cab Tab gastroesophageal reflux disease (GORD) 05-Jul-18

Current status of domestically-developed drugs in terms of approval at home and abroad

(Overseas market entry) Korean companies are creating high value-added through the expansion of their global market shares by launching domestically-developed new drugs in the global market and increasing licensing-out to overseas markets.

  • 15 Korean drugs have obtained approval in the US and EU since 2014, putting sales to developed markets into high gear.

    SK Biopharm independently proceeded to the third phase of clinical trials and released it to the United States following new drugs developed in Korea, such as XCOPRI (‘19), which was approved by the FDA.

Company , Trade Name (Manufacturer) Reference Drug, Efficacy / Effectiveness, Approved in Korea, Approved Overseas
Company  Trade Name (Manufacturer) Reference Drug Efficacy / Effectiveness Approved in Korea Approved Overseas
EMA FDA
Dong-A ST Co., Ltd. Sivextro* New drug Oxazolidinone antibiotic Apr-15 Mar-15 Jun-14
Daewoong PharmaceuticalCo. Ltd. Meropenem** Merrem (AstraZeneca) Carbapenem antibiotic Apr-10 - Dec-15
Nabota** Botulinum toxin(Allergan) Glabellar wrinkles Nov-13 - Jan-19
Celltrion Inc. Remsima* Remicade(Johnson & Johnson) Rheumatoid arthritis (RA), Jul-12 Aug-13 Apr-16
ulcerative colitis, etc.
Truxima* Rituxan (Roche) RA, chronic lymphocyticleukemia, non-Hodgkin’slymphoma, etc. Nov-16 Feb-17
Herzuma* Herceptin(Roche) Breast cancer Jan-14 Feb-18 Dec-18
Linezolid** Zyvox(Pfizer) Tuberculosis,Wide range of antibiotics - - Apr-19
TEMIXYS Zeffix (GSK),Viread (Gilead) AIDS - - Nov-18
Samsung BioepisCo., Ltd. Benepali (EU)*
Eticobo (US)*
Etoloce (Korea)*
Enbrel(Amgen) RA, psoriasis, etc. Sep-15 Jan-16 Apr-19
Flixabi (EU)*
Renflexis (US)*
Remaroche (Korea)*
Remicade
(Johnson & Johnson)
RA, ulcerative colitis, etc. May-16 May-16 Apr-17
Imraldi (EU)*
Hadlima (US)*
Adalloce (Korea)*
Humira(AbbVie) RA, Crohn's disease,inflammatory boweldiseases, etc. Sep-17 Aug-17 Jul-19
Ontruzant(EU)*
Samfenet (Korea)*
Herceptin(Roche) Breast cancer Nov-17 Nov-17 Jan-19
SK Chemicals AFSTYLA New biologic Antihemophilic drug - Jan-17 May-16
SK Biopharm Sunosi New drug Sleep disorder - - Mar-19
aceuticals XCOPRI® New drug Epilepsy - - Nov-19

Source: Korea Health Industry Development Institute (KHIDI)
(The * mark for the trade name indicates biosimilars, and ** mark for the trade name indicates generic medicine.)

License agreements signed by Korean pharmaceutical companies in 2019

Large-scale license agreements with global pharmaceutical companies are accelerating exports of technologies developed by Korean pharmaceutical companies. A total of 13 worth maximum $7,181 million in 2019

Contract date, Company, Product, Exported to, Partner, Contract Value
Contract date Company Product Exported to Partner Contract Value
Jan Yuhan Corporation Non-alcoholic steatohepatitis new drugcandidate US Gilead Sciences, Inc. $785 million
Green Cross Hunterase (Hunter’s syndrome) China CANBridge Private
Pharmaceutical
TiumBio. NCE401 (Idiopathic pulmonary fibrosis) Italy Chiesi Farmaceutici $74 million
Feb SK Biopharmaceuticals Cenobamate (Epilepsy) Swiss Arvelle Therapeutics $530 million
Mar OliX Pharmaceuticals OLX301A (Macular degeneration) France Thea Open Innovation $65 million
LegoChem Biosciences, Inc. Antibody-Drug Conjugate ConjuALL™ US Millennium $404 million
April Green Cross Hunterase ICV Japan Clinigen K.K. Private
July Bridge BBT-877 (Idiopathic Germany Boehringer Ingelheim $1,230 million
Biotherapeutics, Inc. pulmonary fibrosis)
Yuhan Corporation YH25724 (Non-alcoholic Fatty Hepatitis) Germany Boehringer Ingelheim $870 million
Oct JW Pharmaceutical Corp. URC102 (Gout treatment) China Nanjing Simcere
Dongyuan
Pharmaceutical
$70 million
Nov Quratis QTP101 (TB vaccine) Indonesia PT Bio Farma $984 million
GI Innovation GI-101(Dual Fusion Immune Cancer Drug) China Nanjing Simcere
Dongyuan
Pharmaceutical
$796 million
Dec Alteogen, Inc. ALT-B4(Human hyaluronidase) - One of the top 10
global pharmaceutical
companies
$1,373 million

Source: IR data of the companies

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.

[Pipeline] 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 “K-CAP” a treatment for gastroesophageal acid reflux developed by CJ Healthcare in 2018. 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)

(Clinical Trials) Clinical trials grew dramatically from both qualitative and quantitative perspectives

  • Already on a clear growth track with its high level of clinical trial capabilities and reliable data, Korea is emerging as a core clinical trial destination in the pharmaceutical market in Asia. Korea-based 22 major healthcare organizations, including Seoul National University Hospital, Samsung Seoul Medical Center and Asan Medical Center, have won global certifications for their clinical study environment helping the country to build a clinical infrastructure on a global level. With this advanced infrastructure, Korea ranked 7th in the world for global clinical trial protocol market share in 2018, moving one level down from the 6th at the previous year. The number of domestic clinical trials came to 679 in 2018, up nearly 3.2% compared to 658 in 2017. Its share in global clinical trials decreased from 3.51% in 2017 to 3.39% in 2018.
  • The number of multinational regional clinical trials (MRCTs) conducted by multinational pharmaceutical companies in Korea has also increased sharply since the country introduced International Conference on Harmonization Good Clinical Practice (ICH GCP) in 2000. Especially, Pfizer formed a partnership with Korea as part of its global clinical program in 2008, selecting 4 of its 9 global Core Research Sites (CRSs) in Korea.
  • The ongoing “Smart Clinical Trial Platform’ program that involves major 7 hospitals is expected to contribute to achieving higher clinical trial efficiency of Korea under the assumption that the platform technologies to be developed through this program are widely adopted by Korean hospitals. Active use of the EMR data in conducting feasibilities and matching patients with the complex inclusion/exclusion criteria would greatly improve efficiency together with a more streamlined and transparent clinical trial authorization process by Korean health authorities (Reference: Chee DH. Korean clinical trials: its current status, future prospects, and enabling environment. Transl Clin Pharmacol. 2019;27(4):115-118).

[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.