South Korea's pharmaceutical and biopharmaceutical industries are recognized for their technological capabilities, but the underlying industrial infrastructure remains a challenge. As China leverages its capital, clinical trial capabilities, and commercialization strengths to penetrate the global market, analysts suggest that South Korea must improve its overall ecosystem.
According to the Korea Bio Association's Bio Economy Research Center, as of this year, South Korea has 3,259 new drug pipelines, ranking third globally after the United States (11,662) and China (7,141). The number of R&D-focused bio ventures is also among the highest in the OECD.
Industry experts note that technological prowess and industrial competitiveness are separate issues. While China has built an ecosystem that connects clinical trials, production, and commercialization through a vast domestic market, government support, and substantial capital, South Korea's individual technologies are world-class, but the links needed to develop these into global blockbuster drugs are weak.
In particular, there is a lack of platforms for bio-focused venture capital (VC), contract research and development manufacturing organizations (CRDMO), and mergers and acquisitions (M&A). Jeong Yoon-taek, head of the Pharmaceutical Industry Strategy Research Institute, stated, "Establishing strategic partnerships that can respond to global clinical and regulatory challenges and enhancing the overall ecosystem's capacity is an urgent task."
China was not always an innovation powerhouse in pharmaceuticals. In 2015, over 95% of approved drugs were generics, but continuous investment and expansion of industrial infrastructure have transformed its landscape. A notable example is Hansoh Pharmaceutical, which, after going public in 2000, invested in R&D for 14 years before obtaining approval for its self-developed drug. The proportion of R&D investment increased from about 5% of revenue to as much as 30%. It later succeeded in commercializing the late-stage gastric cancer treatment 'Apatinib' and the immuno-oncology drug 'Camrelizumab.'
This transformation was not solely due to individual company investments. In the early 2000s, the Chinese government implemented policies to support experts in the scientific field, leading to the return of Chinese scientists working abroad and the growth of the contract research organization (CRO) market. The combination of CROs with global clinical experience, VC, and government support has fostered an ecosystem that connects technology development to commercialization.
According to GlobalData, cited by the American Pharmaceutical Association, Phase 1 clinical trials in China are, on average, seven months faster and 30-50% cheaper than in the U.S. In January of this year, China surpassed the U.S. and Europe in the number of global drug approvals, and the number of new drug developments entering clinical trials in 2024 is also expected to exceed that of the U.S.
The government is focusing on building an innovation ecosystem that connects 'core technology - technology startups - investment - technology exports - new drug development.' The industry believes that establishing a structure that connects technological capabilities to the global market will determine competitiveness.
Hwang Joo-ri, head of external cooperation at the Korea Bio Association, remarked, "Korean bio has already passed the stage of doubting its technological capabilities. We need to create a structure that allows talent, capital, and commercialization know-how with global market experience to flow into and accumulate within the domestic ecosystem."
* This article has been translated by AI.
Copyright ⓒ Aju Press All rights reserved.