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Korean Pharmaceuticals Industry Needs Deregulation, Tax Supports
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Korean Pharmaceuticals Industry Needs Deregulation, Tax Supports
  • By Jung Min-hee
  • February 22, 2016, 01:45
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Korea’ s Ministry of Food and Drug Safety holds great debate on biopharmaceuticals regulations improvement at the SK Chemicals headquarters in Pangyo, Gyeonggi Province, on Feb. 19.
Korea’ s Ministry of Food and Drug Safety holds great debate on biopharmaceuticals regulations improvement at the SK Chemicals headquarters in Pangyo, Gyeonggi Province, on Feb. 19.

 

In a bid to make the pharmaceutical and biotechnology industries as new growth engine, domestic companies say that the Korean government should implement aggressive supporting policies, including tax benefits, as well as deregulation.

During a meeting hosted by the Ministry of Food and Drug Safety (MFDS) in the morning and the afternoon on Feb. 19 to improve regulations in the pharmaceutical and biotechnology sector, domestic firms said they need the government’s support desperately in order to achieve the government’s plan to become the world's seventh largest pharmaceutical powerhouse by 2020 and the world's seventh largest bio-health powerhouse by 2017.

At the meeting for “medicine regulations improvement” held at the Plaza hotel in Sogong-dong, Seoul, in the morning, Daewoong Pharmaceutical Vice President Lee Bong-yong said, “We ask the government to remove overlapping work in the process of approval so that it can reduce the development period and help early decision making.”

Yoo Hyun-sook, senior executive director at Huons, said, “We need quick approvals for innovative new drugs.” The U.S. Food and Drug Administration also runs the quick approval system for patients suffering from serious and deadly diseases when a new drug shows better efficacy than existing treatments in an earlier clinical trial. Once the quick approval system for innovative new drugs is introduced, domestic pharmaceutical companies can push into the global market faster and improve the competency for new drug development, added Yoo.

Hanmi Pharmaceutical CEO Lee Kwan-soon said, “The government should come up with the long-term policies, including the extension of tax reduction, rather than one-time support. It should extend the tax deduction to costs for phase III clinical trials and investments in production facilities for clinical trials.”

On the day, the MFDS announced to push for legislation of a “special act for medicine permission support” to expand patients’ opportunities for treatment, and registration of “the EU's white list”, which allows companies to export raw material medicine to the EU member states without supply information.

At the meeting for “biopharmaceticals regulations improvement” held at the SK Chemicals headquarters in Pangyo in the afternoon on the same day, domestic companies asked the ministry to increase tax supports and supports for vaccine clinical trials.

Samsung BioLogics President & CEO Kim Tae-han said, “Until now, regulations on biopharmaceuticals have greatly improved. However, problems cannot be addressed with deregulations alone.” Kim added that blue-chip biotechnology companies are exempt from corporation income tax for 15 years in Singapore and have low corporation tax rates in Ireland. Recently, the Korean government has decided to extend the period of tax reduction for investments in medicine production facilities from the end of this year to the end of 2019, and domestic firms are asking to increase such tax supports, said Kim.

Korea’s gross domestic product (GDP) amounts to some 2,000 trillion won (US$1.62 trillion), while the country’s biopharmaceutical industry totals less than 20 trillion won (US$16.22 billion). In a bid to make such an industry as the nation’s new growth engine, the government should not only ease regulations but also provide practical supports, including tax benefits.

SK Chemicals CEO Han Byung-ro suggested administrative supports for vaccine clinical trials. Han said, “In order to dominate the vaccine market, the government should quickly examine and support development. Currently, the nation’s self-sufficiency rate of vaccine stands at 15 to 20 percent. When a pandemic hits the country, the government may have to leave the safety of the people with foreign countries.”