First Impressions: Korean Pharma

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Multinational pharma company managers working abroad must adapt to new cultures and develop a deep understanding of local markets. Korea is no different; here three foreign country managers give their first impressions and insights into the Korean pharma market.

 

Nic Horridge, Roche

 

As a newcomer in the land of the morning calm, the last few months have been an interesting learning experience.

Nic Horridge, Roche Korea

 

Nic Horridge, president of Roche Korea has spent the last 14 years with the company, first as a product and marketing manager in the United Kingdom, and later moving into Roche’s international business unit with a focus on the Asia Pacific region. Horridge commented on the learning curve and partnership building necessary for doing business abroad: “As a newcomer in the land of the morning calm, the last few months have been an interesting learning experience. I have focused on trying to understand the local market dynamics, establishing connections with key stakeholders, and building trust with the local team. We are in the process of establishing a business strategy together with the leadership team in order to provide access to healthcare solutions for patients more quickly.”

Horridge shared his insights on pharma pricing in Korea and the challenges that come with low prices. “Regarding prices, we feel the reward for innovation could be improved: pharmaceutical prices for innovative medicines in Korea fall average around 60-70 percent of the OECD average. This is an issue because Korea is a well-developed country with a strong GDP. Obviously, low prices are an issue for all companies. Therefore, it is crucial to engage in constructive discussions between the industry and health authorities, putting patients’ interests first and ensuring we have a sustainable model in Korea.”

Read the full interview with Roche’s Nic Horridge here

 

Rana Azfar, Novo Nordisk

 

Everyone has equal rights and opportunities to access high-quality services.

Rana Azfar, Novo Nordisk

 

Novo Nordisk vice president and general manager Rana Azfar has led the company’s business operations in Korea for the last three years after previously serving as general manager in Pakistan. Azfar lauded Korea’s commitment to high-quality healthcare for all its citizens: “South Korea is a very developed market. As the 11th largest economy globally, it is easily on par with any developed European market. Consequently, the government has the capability to reimburse medications… While the hospitals and clinics are privately run, such as the Samsung hospital and the Seoul national hospital, the government is the sole healthcare insurance provider. Treatments and medicines in the clinics and hospitals are reimbursed to a certain degree, usually around 70 per cent, with 30 per cent out of pocket payments. There is little difference between the social and economic classes. Everyone has equal rights and opportunities to access high-quality services.” 

Azfar explained how the Korean healthcare model encourages providers to offer the best possible services, “This induces healthy competition amongst the hospitals and clinics within the market. Hospitals want to provide the best treatment to patients to become the provider of choice. In terms of management, the decentralization of the system reduces the bureaucratic burden for the government, who can shift their focus to overseeing, rather than delivering quality. Moreover, the prices for drugs, regardless of reimbursement, are controlled. Healthcare service prices, such as consultation fees are also set by the government. Private hospitals are not permitted to earn profits from the patient care or the drug prescription, but through added services that it can offer.”

He went on to highlight the efficiency in Korea’s healthcare system: “Moreover, the speed at which services are delivered in Korea is impressive. While there are waiting lists, once seen, the processes are very streamlined, with electronic prescriptions, and a completely digitalized system. Although these processes are also smooth in developed European nations, it is the speed at which they take place that differentiates South Korea.”

Read the full interview with Novo Nordisk’s Rana Afzar here

 

Paul Henry Huibers, Lilly

 

The health care system in Korea is very different, especially compared to where I was previously working in South America.

Paul Henry Huibers, Lilly Korea

 

Paul Henry Huibers, president of Lilly Korea recalls his transition to Korea, “I believe the most important asset I have gained is the ability to adapt to different cultures. The health care system in Korea is very different, especially compared to where I was previously working in South America.”

Huibers emphasized the challenges faced by pharma companies that want to innovate in a low-cost market: “The system here is very different and we have to understand that. From the Korean perspective as the buyers in the market, they are doing a commendable job, negotiating the lowest prices in the world. However, it does not incentivise local companies. Consider Japan over the years. Their local industry developed with very high prices as it became attractive to invest. This ecosystem has allowed Japan to develop multiple players that compete on the world stage. That is not the case here; the largest Korean pharma company sells $1 billion with R&D spending at perhaps 10-15 percent of that revenue. This makes it very difficult for a Korean company to reach a globally competitive position.”

Huibers continued to elaborate on reimbursement issues, “Another challenge in Korea is receiving drug reimbursement. Nevertheless, once it is reimbursed, Korea is a very good market from a volume perspective, because all Korean patients are covered under the national insurance system, meaning there is no limitation from an access perspective. Whereas Switzerland would be considered a low volume high price market, Korea could be characterized as a low-price high-volume market. Given the importance of reimbursement, the pricing reimbursement access capabilities need to be very strong so that negotiations with the government can be successful.”

Read the full interview with Lilly’s Paul Henry Huibers here

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