South Korea is situated on the periphery of the global pharmaceutical industry map. The global drug market reached US$1.1 trillion (1,244 trillion won) as of last year, the South Korean market stood at 21.7 trillion won (US$19.19 billion), accounting for a 0.012 percent of the total. There are no South Korean pharmaceutical companies ranked among the global top 50 as they have failed to achieve economies of scale due to such a small domestic market.
However, that doesn’t mean only gloomy indicators exist. There are hopeful signs as well. South Korea’s medicine exports had grown by 55 percent in four years from 2.34 trillion won (US$2.07 billion) in 2012 to 3.62 trillion won (US$3.2 billion) last year. The figures in the first half of this year also reached 1.9 trillion won (US$1.68 billion), up 6.9 percent from a year earlier. As domestic drug makers have succeeded in developing a new drug one after another by expanding research and development (R&D) investment, export of technologies are on the rise. In particular, they stand out in the biomedicine market. A considerable amount of pharmaceutical products are about to be approved and licensed to sell while conducting global clinical trials. Some say that South Korea can go mainstream in the global market in the era of biomedicine, though it fell behind in the era of synthetic drugs in the past.
In the 1980s, domestic pharmaceutical companies only focused on producing complete products and localizing raw material medicines. It was unthinkable for them to develop a new drug that takes an enormous amount of R&D investment costs at that time. Entering the 1990s, they made an effort to develop a new product and began to show results. Starting with SK Chemicals Co.'s Sunpla injection, an anti-cancer medication that earned the title as Korea's first homegrown drug in 1993, there are 29 new locally developed products, including Kolon Life Science Inc.’s Invossa which was licensed to sell this year. To be sure, there are products that went out of production and show sluggish sales in the global market. However, it is encouraging that domestic firms have developed 1.7 new products every year. Notably, six new homegrown drugs received approval in 2015 alone.
In general, pharmaceutical products that sell more than 10 billion won (US$8.84 million) a year are considered a blockbuster. Five new drugs developed in South Korea come up to the standards. Boryung Pharmaceuticals Co.’s high blood pressure drug “Kanarb” recorded 10 billion won (US$8.84 million) in sales as soon as it was first released in 2011 and posted 44.5 billion won (US$39.35 million) in sales last year. Kanarb is currently licensed to sell in 10 out of 13 Central and South American countries and has signed an export contract worth US$414 million (467.78 billion won) with 51 countries around the world, including 10 African countries. In addition, LG Chemical Ltd.’s anti-diabetics drug “Zemiglo,” Il-Yang Pharmaceutical Co.’s reflux esophagitis drug “Noltec,” Chong Kun Dang Pharmaceutical Corp.’s anti-diabetics drug “Duvie” and Hanmi Pharmaceutical Co.’s lung cancer drug “Olita” are ringing up over 10 billion won 8.84 million) a year.
An increasing number of domestic drug manufacturers are exporting not only complete products but also technology of new drug candidate after development. Hanmi Pharmaceutical have exported technology of seven new drug candidates, such as Rolontis, a candidate material for anti-neutrophil treatments developed in 2012 and HM95573, a small molecule pan-RAF inhibitor for the treatment of solid tumors. As the company’s Poziotinib, a MEK-targeted cancer treatment which was licensed out by U.S.-based Spectrum Pharmaceuticals in 2015, showed a superior efficacy in non-small-cell lung cancer and breast cancer patients in a phase-2 clinical trial, it is highly likely to be commercialized and come into the market.
There are businesses that boost exports in a specialized sector like vaccine, intravenous fluid and nutrient tonic. Green Cross won a US$37 million (41.63 billion won) flu vaccine order through participation in a bid to supply vaccines for the Pan American Health Organization (PAHO), an international health organization under the World Health Organization (WHO), in March this year, ranking first in terms of market share in the international organization procurement market in the flu and varicella vaccine sector. The company’s exports had more than doubled from 81.4 billion won (US$72.28 million) in 2011 to 203.8 billion won (US$180.98 million) in 2016.
JW Pharmaceutical Corp. is targeting the global market with its infusion of nutrient. The company developed WINUF, a third-generation infusion of nutrient containing omega-3 fatty acid, in 2013 and signed the biggest export contract ever with global leading intravenous fluid producer Baxter based in the U.S. When JW Pharmaceutical sells WINUF in the global market from 2019 in earnest, the company is expected to turn over 100 billion won (US$88.76 million) a year.
Donga-ST Co.’s Bacchus is the best selling product in the global market. The company first exported Bacchus in 1981 and sold 63.2 billion won (US$56.12 million) worth of the product in the global market last year alone with its huge popularity in Cambodia, Myanmar and Brazil and the Philippines. Donga-ST posted 146.9 billion won (US$130.39 million) in export in not only general pharmaceuticals but also bio and material pharmaceuticals sectors last year.
Daewoong Pharmaceuticals Co. signed a contract with Swiss-based multinational drug distributor Abbott last year to export hyperlipidemia treatment “Pitavastatin,” targeting the global market. Pitavastatin has been sold in Thailand from June this year and will go on sale in the Philippines from the end of the year. The company’s Nabota, a botulinum toxin-type formula, has applied for a license to sell in the U.S. and Europe for the first time in the domestic industry.
Recently, South Korean pharmaceutical exports have driven by biomedicines. According to the Ministry of Food and Drug Safety (MFDS), biomedicine productions stood at 2.01 trillion won (US$1.78 billion) last year, surpassing the 2 trillion won (US$1.78 billion) mark for the first time. Its exports recorded at 1.23 trillion won (US$1.1 billion), exceeding 1 trillion won (US$888.02 million) for the first time as well. Bio drugs accounted for as much as 34 percent of the total drug exports.
Particularly, biosimilars has put up a good show. Pharmaceutical exports grew in the first half of this year, boosted by biosimilars. Biosimilars took up 24.6 percent of the total pharmaceutical exports during the January-June period this year. One in four exported medicines is a biosimlar product.
Celltrion Healthcare Co.’s biosimilar Remsima ranked first in terms of bio pharmaceutical exports last year. The sales of Remsima reached US$636 million (737.7 billion won) last year, up 44.7 percent from a year ago. The figure accounted for nearly 60 percent of total bio drug exports. Celltrion has exported US$515 million (579.47 billion won) worth of biosimilars until the third quarter this year. It has shown a 44 percent rise in exports compare to the previous year and most of them come from Remsima. The company gained marketing approval for Truxima, its self-developed biosimilar to global blockbuster anti-cancer drug “Rituxan” by F. Hoffmann-La Roche Ltd., in February this year and has filed an application seeking marketing approval for its breast cancer treatment “Herzuma” from the U.S. and Europe.
Samsung BioLogics Co., which produces biosimilar drugs under consignment by major pharmaceutical companies such as Bristol-Myers Squibb (BMS) and Roche, had approximately 300 billion won (US$266.48 million won) in sales and turned over 170.9 billion won (US$151.8 million) in the first half of this year. Since all the products manufactured by Samsung BioLogics are sold in other countries, sales figures equal exports. Samsung Bioepis Co., a subsidiary of Samsung BioLogics, saw the sales of its self-developed autoimmune disorder drug “Benepali (Brenzys in South Korea)” reach US$253.2 million (280 billion won) in Europe as of the third quarter, doubling the yearly sales of US$100.6 million (113.26 billion won) last year. Samsung Bioepis received marketing approval for its autoimmune disorder treatment biosimiar “SB5 (product name Imraldi)” in Europe in August, making inroads into the global market.