The South Korean government is moving to restructure the country's generic drug industry, which has long relied on the domestic market and aggressive sales competition. The plan aims to reshape an industry crowded with small and mid-sized drugmakers producing similar medicines, and to strengthen export competitiveness by encouraging companies to grow in scale and build research and development capacity.
The Ministry of Health and Welfare said it held the third meeting of its public-private council on pharmaceutical innovation on the 14th at Sangyeonjae, a conference venue near Seoul Station, where participants discussed ways to strengthen the competitiveness of generic-focused drugmakers and turn them into exporters. Government officials, public agencies, industry representatives and outside experts attended.
Korea's generic drug industry has settled into a structure in which numerous drugmakers produce and sell similar medicines, supported by contract manufacturing and a system allowing companies to jointly conduct bioequivalence tests. Critics have said this leads to excessive sales competition, as companies focus on expanding sales of existing generics rather than investing in new drug development or research.
The government is reviewing measures to encourage generic drugmakers to build scale, secure the capacity to invest in R&D and develop expertise in specific fields. The aim is to move them away from a domestic-focused business model and expand their presence in overseas markets.
Participants also shared cases of generic industry restructuring abroad. Song In-myung, a professor at Kongju National University, presented restructuring policies pursued in China, India and Japan. Jeon Hwan-ju, a team leader at the Korea Health Industry Development Institute, analyzed the business models of domestic and foreign pharmaceutical and biotech companies and proposed growth strategies by company type.
The council also discussed stronger oversight of contract sales organizations (CSOs) that promote pharmaceutical products. Drawing on earlier reviews by a working-level group, participants examined ways to curb excessive sales competition in the marketing of generic drugs.
"For Korea's generic drug industry to move beyond price and sales competition in the domestic market and reach global markets, companies need a fundamental overhaul through greater scale and specialization," said Jeong Kyoung-shil, head of the ministry's Office of Healthcare Policy. "We will actively review regulatory improvements and support measures so that generic drugmakers can grow into exporters with R&D capabilities."
"Generics, along with incrementally modified new drugs and global new drugs, are an important springboard for overseas expansion," said Rho Yeon-hong, chairman of the Korea Pharmaceutical and Bio-Pharma Manufacturers Association. "We will work to help the industry strengthen quality competitiveness and R&D investment and reform itself from within."
The ministry said it plans to draw up measures to strengthen the competitiveness of the country's generic drug industry based on the discussions.