The Korean government plans to reduce by half the current one and a half years of time required for examination and approval of new biopharmaceutical products.
The government will announce its innovation strategy to foster the biotech and healthcare sector this week. The plan will include a 2 trillion won investment in R&D in 2019, relaxation of KOSDAQ listing conditions for biotech and healthcare companies, improvement of exit processes for investors, expansion of the scope of technologies eligible for R&D tax credit, and development of the Osong national industrial complex.
The global healthcare market is booming due to rapid population aging and the Fourth Industrial Revolution. In this context, President Moon Jae-in named the bio-health industry as one of the three promising future industries along with system semiconductor and future car industries.
Market research firm Markets and Markets said that the global healthcare market is expected to grow at an average annual rate of 4 percent to 5 percent and reach US$11.5 trillion by 2020. However, the size of the Korean healthcare industry is still small. In the pharmaceutical industry alone, the global market size reached US$1,104 billion as of 2016, but Korea accounted for US$15.8 billion, which is only 1.4 percent.
To cultivate the bio-health industry as a growth engine as powerful as the semiconductor industry, the government decided to increase the workforce for new medicine screening process at the Ministry of Food and Drug Safety, thereby reducing the approval and review period. At present, the number of cases per one employee in charge of reviewing and evaluating new drug applications in Korea is six times higher than that in the United States. The number of biomedical device examinations done by one examiner is 11 times as many.
Government-level of R&D investment in the bio-health industry is expected to increase to 2 trillion won annually. The government also decided to increase tax support for new technologies in the biotechnology and pharmaceutical fields. An industry official said, "The total amount of R&D investment in the pharmaceutical industry combined with the private sector was less than 2 trillion won per year in 2017. The R&D investment should be further expanded at the national level."
The government plans to ease the requirement to maintain listing on the KOSDAQ in light of the characteristics of the bio-pharmaceutical industry. Considering that drug clinical trials take an average of six to seven years, a KOSDAQ listed biopharmaceutical company will be exempted from designation as an issue for administration for up to seven years. Currently, if annual sales after listing are less than 3 billion won or if there is an operating loss for four consecutive years, it is designated as an issue for administration.