Korea is fast becoming a big player in the pharmaceutical industry, especially within the biotech arena. With 4% of the total pipelines in the world, the country is showing strong R&D capabilities and fierce ambitions for growth.
Korea is now the 3rd largest pharma region in Asia, with a forecasted growth from $18.6 billion in 2016 to an estimated $20.4 billion in 2020.
The surge in international companies keen to partner with Korean entities is a reflection of the country’s thriving domestic biopharmaceutical market, which over the last five years has seen a compound annual growth rate (CAGR) of 9%.
According to data from the Ministry of Health and Welfare, South Korea’s exports of products in the healthcare sector surged 30.9 percent in the first half from last year.
Exports of drugs, medical devices, and cosmetics amounted to $7.1 billion (7.8 trillion won) in the first half, up almost 31 percent from the same period last year. Drug exports alone, meanwhile, amounted to $2.2 billion in the first half, up 33 percent from the previous year. Major export items in finished drugs included biological medicines (immunity-related items), which sold $820 million and accounted for 36.8 percent of the exports of finished pharmaceuticals. Korean vaccines sold $80 million overseas, and botulinum toxins, also $80 million.
South Korea’s medical device market is also flourishing fast. Shipments of medical devices grew 13.3 percent year-on-year to reach $1.66 billion in the first half.
Korean innovation is one to watch
With over 900 new medicines under development, Korean companies now boast ownership of a full 4% of global drug development pipelines.
As of 2017, Korea has developed 29 new drugs since the countries first locally developed medicine in 1999, the Sunpla Injection for the treatment of cancer.
Of the 29 new medicines, a total of 8 new drugs have been approved by the US FDA and 9 new drugs have also been approved by EMA as of March, 2018. Notably, Korea’s Hearticellgram-AMI (Pharmicell) is the world’s first stem-cell therapy product to gain approval for marketing.
Governmental initiatives driving growth
Some innovative government initiatives have been big contributors to this growth, such as the implementation of the Incheon Free Economic Zone. Korea Free Economic Zones (KFEZ) have been designed to strengthen national competition for businesses in the country. The goal of the zones is essentially to transform these areas into hubs for international business, logistics, leisure and tourism and to catapult Korea into the top 3 most performing Asian economies.
The United States–Korea Free Trade Agreement (KORUS FTA) that has been in place since 2007 has also facilitated strong investment from multinational companies.
And then there is Bio-Vision 2016, a government initiative (started in 2006) established to propel the development of Korean biotechnology over a 10-year period up until 2016.
It would appear that the country is excelling in this area, topping the Bloomberg Innovation Index for the 5th year in a row – largely due to the biopharmaceutical work that Korea is becoming known for.