The Ministry of Food and Drug Safety (MFDS) has decided to limit the number of pharmaceutical companies that can participate in a joint bioequivalence test for development of generic drugs in a bid to put the domestic generics market in order.
Currently, small pharmaceutical companies can jointly carry out a bioequivalence test in developing generic drugs. There is no limit in the number of companies that can join hands for a joint bioequivalence test. This system has resulted in a large number of companies developing the same generic drugs simultaneously as the cost of taking a bioequivalence test is low.
To address this problem, the ministry has decided to introduce a “1 + 3” system, which limits the number of participants in a joint bioequivalence test to three per original drug. The ministry considered abolishing the system altogether now, but decided to set a three-year grace period to give small pharmaceutical companies time to adapt to the planned change. The “1 + 3” system will go into effect one year after the relevant regulation is revised in June or July this year.
If the joint bioequivalence test system is abolished, each pharmaceutical company will be required to finance a bioequivalence test on its own. This is likely to trigger a restructuring of the industry, as a considerable number of small and medium-sized pharmaceutical companies are expected to leave the market.
At a meeting with pharmaceutical company CEOs on Feb. 27, Minister Ryu Young-jin said, "We will strengthen the competitiveness of the domestic pharmaceutical industry by preventing massive development of generics. We will limit the number of products in a bioequivalence test for three years and completely abolish the system afterwards."
The “1 + 3” system was proposed by Won Hee-mok, president of the Korea Biopharmaceutical and Bio-pharma Manufacturers Association.
The government allowed multiple companies to jointly conduct a bioequivalence test in 2011. The deregulation caused the number of generic drugs to surge. Critics began to raise their voices to restrict the bioequivalence system after the discovery of carcinogens in valsartan, which is a raw material used in hypertension treatment. As more than 100 domestic generics have been found to have used valsartan, a growing number of people called for abolition of the joint bioequivalence test.
The government hopes that the revised bioequivalence system helps to improve the competitiveness of the pharmaceutical industry as it will force companies to focus on R&D on their flagship drugs.
After presenting its plan to overhaul the bioequivalence test system, the MFDS announced good news for the industry. The MFDS will introduce priority counseling and expedited screening for priority medicines, such as rare and incurable disease treatments, and expand the scope of non-clinical trial data of non-OECD countries that would be recognized as valid to support the development of new drugs by domestic pharmaceutical companies.