South Korea Pharmaceutical Market Valued USD 20 Billion in 2012, Says GBI Research
31 May 2013 • by Natalie Aster
South Korea’s pharmaceuticals market was valued at $20 billion in 2012, growing from $14.5 billion in 2006 at a Compound Annual Growth Rate (CAGR) of 5.5%. The industry experienced slower year-on-year growth in 2009 and 2010 due to decreased raw material production. It is expected to grow at a CAGR of 7.6% to reach $31.1 billion in 2018. An increase in insurance coverage, the country’s aging population and favorable government initiatives are expected to drive the industry’s growth in the future.
According to the report “South Korea Pharmaceutical Market Outlook 2013” by GBI Research, in 2011, the Ministry of Health and Welfare (MOHW) announced that it would cut prices of some 7,500 registered drugs by 14% to control spending on drugs in the National Health Insurance (NHI) scheme by 2012. The drugs exempt from these price reductions were:
Essential medicines, such as those included in the country’s drug shortage prevention program
Drugs manufactured by innovative pharmaceutical companies and produced by chemical synthesis
Medicines produced by fewer than three companies
A medicine priced lower than others with the same efficacy
South Korea Pharmaceutical Market Outlook 2013
Published: May, 2013
Price: US$ 3,500.00
The revisions have changed the pricing mechanism for new medicines from external reference pricing to negotiations between the National Health Insurance Corporation (NHIC) and pharmaceutical manufacturers, taking into account price–volume discounts. For medicines listed prior to January 1, 2012, prices were to be reassessed according to the revised pricing policy.
South Korea can be considered a pioneer in the field of stem cell therapy. The country has approved products for indications such as Acute Myocardial Infarction (Hearticellgram – AMI), knee cartilage injury (Cartistem), and Crohn’s disease anal fistula (Cupistem). The country is rapidly developing the field of stem cell therapy and boasts a robust pipeline that witnesses active participation from pharmaceutical companies. South Korea stands among the top leaders in stem cell research across the globe. This has been made possible by strong government support and increased funding as stem cell research is considered the next growth engine for the economy. MOHW announced an investment of KRW33 billion ($33m) as its stem cell R&D budget of 2012, four times the amount invested in 2011. The increased investment is to be utilized in the commercialization of R&D to check the safety and efficacy of these treatment technologies. Previously, money had only been invested in basic research.
The South Korean government has set 22% of the global share in biosimilars as a target until 2020. To achieve this, the Korea Food and Drug Administration (KFDA) introduced regulatory guidelines for biosimilars in 2009 and the government created an $80m Biomedical Fund in the same year to provide financial assistance to local biotech companies for biosimilars R&D. The South Korean government is actively involved in the entire lifecycle of biosimilars. With an investment of $5 billion, the government has shaped the cities of Osong and Daegu to act as production hubs with high technical expertise.
More information can be found in the report “South Korea Pharmaceutical Market Outlook 2013” by GBI Research.
To order the report or ask for sample pages contact [email protected]