The pharmaceutical sector encompasses substances that cure, treat, prevent, or diagnose diseases. These include small molecules and biologics, often called drugs, medications, or medicines. Both prescription and over-the-counter (OTC) options are considered. Depending on regional regulations, these products can be accessed through pharmacies, hospitals, doctors, and other outlets.
Tracing its roots back to the late 1800s, Korea’s contemporary pharmaceutical scene has a sturdy 110-year foundation. The introduction of the product patent system in 1987 led Korean firms to engage in comprehensive R&D activities. Over the past three decades, these companies have surged forward, committed to majorly contributing to global pharmaceutical breakthroughs for communal health.
South Korea is establishing itself as a pivotal hub in Northeast Asia and a leading figure in global health innovation. Over the last ten years, the global pharmaceutical and biotech sectors have recognized Korea’s capacity for novel drug R&D.
The importance of South Korea’s pharmaceutical domain is evident, valued at about 29.9 trillion South Korean won in 2022. That same year, pharmaceutical expenditure made up roughly 1.7% of the country’s GDP, with per capita spending on the rise. Moreover, the exportation of pharmaceutical goods from Korea saw a significant upturn during the Covid-19 outbreak.
Pharmaceutical production in Korea has seen substantial growth, from around 13.8 billion South Korean won in 2012 to nearly 25.6 million won in 2022. This uptick aligns with the rise in producing both OTC and prescription drugs, with the latter forming over 80% of the production value consistently.
A vast network of over 24.3 thousand pharmacies makes up about 83% of pharmaceutical distributors in the nation. Data from the Ministry of Health and Welfare reveal a 30.9% rise in healthcare exports in the first half of the year, compared to the previous one.
Pharmaceutical exports surpassed US$ eight billion in 2022. Despite this being an improvement from a decade ago, it remains below the peak seen during 2020 and 2021.
The Korean pharmaceutical sector actively provided medical supplies amid the Covid-19 crisis, with test kits standing out.
Pharmaceutical imports have also surged, with export growth helping close the gap between imports and exports.
The sector is expanding as the government launches initiatives to raise awareness about cancer and chronic disease care. For example, the Korean Breast Cancer Society will host the Global Breast Cancer Conference 2023, slated for April 2023, expected to increase demand for cancer treatments and vaccines.
In recent decades, Korea’s pharmaceutical field has seen remarkable strides in novel drug research and development, with 33 new market drugs approved by MFDS, two USFDA-approved drugs, and roughly 15 IND-approved drug candidates, including the world’s first monoclonal antibody biosimilar. About 200 out-licensed methods in 30 countries and 300 launched drugs and APIs underscore this progress.
The success of Korea’s pharmaceutical innovation stems from dedicated R&D investments, a robust R&D ecosystem, and significant government backing.
This research infrastructure focuses on stimulating innovation and includes laws like the 2011 Act for supporting industry growth through innovation, substantial R&D funding, and essential infrastructure development.
Rising players in the pharma sector target diverse chronic diseases while adopting collaborative tactics, acquisitions, and product launches to boost market prospects.
For instance, in February 2022, Pharma Korea Co. Ltd received MFDS approval for Opdivo (nivolumab) intravenous infusion for several treatments.
Market Insights
- The sector thrives due to an aging population, high chronic disease rates, and healthcare modernization.
- Innovations in precision medicine and biotechnology are shaping the future.
- Government efforts to enhance drug affordability and access are catalysts for growth.
- Collaborations between pharmaceutical firms and academic bodies drive innovation.
Dynamic Life Sciences Sector
South Korea has spotlighted life sciences and biotech as primary development areas. A surge in biotech is driven by public and private investment and prolific R&D.
With a cutting-edge infrastructure, supportive government policies, and robust research capacity, South Korea has emerged as a key player globally. In recent years, the country has witnessed increased domestic and international investments across biotechnology, pharmaceuticals, medical devices, and healthcare.
The country presents numerous opportunities for entrepreneurs, investors, and multinationals to explore and benefit from this thriving market. Thanks to advanced research and intellectual capability, the life sciences industry has enjoyed notable growth.
A well-established network of research institutes, universities, and private enterprises drives forward scientific and technological progress. The government’s role in fostering an inviting business environment and R&D initiatives has propelled the inception of breakthrough technologies.
In February 2023, the government articulated five key objectives to generate new bio-health markets:
- Innovation in healthcare services.
- Strengthening bio-health exports.
- Enhancing R&D in tech convergence, including AI.
- Cultivating talent and supporting emerging businesses.
- Ensuring relevant legal frameworks and infrastructure.
Several factors fuel rapid growth in the life sciences investment:
- A skilled and educated workforce with a focus on STEM ensures a constant talent influx.
- Advanced research infrastructure supports scientific progress and commercialization.
Governmental backing plays a pivotal role, with numerous funding programs like the Bio-Venture Support offering resources to budding start-ups.
South Korea’s life sciences sector is set to expand further. With strong research prowess, governmental support, and an enticing business climate, it is an attractive investment locale for companies in biotechnology, pharmaceuticals, and healthcare services.
As global demand for emerging medical technologies rises, South Korea’s life sciences industry stands ready to meet it. With a focus on fields such as regenerative medicine, precision therapies, and genetic engineering, the country is likely to discover advancements that herald commercial success.
Conclusion
In conclusion, the Korean pharmaceutical sector is set for sustained growth and enhanced global prominence. With strengths in biotechnology, biosimilars, and advanced drug systems, South Korea is a significant global pharmaceutical entity. Regulatory changes and state backing have bolstered the sector, fostering competition and invention. Looking ahead, emphasis on R&D, partnerships, and markets will likely propel its development and stature in the near future.