Korean Drugmakers Reshape R&D as Price Cuts and Commercial Law Changes Loom

Korean drugmakers are reorganizing research and development around their headquarters and speeding up outside hiring and internal reshuffles as policy changes such as drug price cuts and revisions to the Commercial Act take shape. The moves are aimed at concentrating new-drug development and commercialization capabilities as profitability is expected to come under pressure.

According to the industry on the 14th, Ildong Pharmaceutical decided the previous day to merge its R&D subsidiary Unovia into the parent company. Ildong cited a changing business environment and rising uncertainty, the need to strengthen competitiveness and the goal of operational stability. The company said it will integrate R&D functions into headquarters to improve management efficiency in line with institutional changes, including implementation of a revamped drug-pricing system.

Unovia has led development of Ildong Pharmaceutical’s key pipeline. It has secured Phase 1 topline data for a GLP-1RA obesity drug candidate, and its P-CAB peptic ulcer treatment fadoprazan is in Phase 3 trials. Ildong said the reintegration will help speed technology licensing deals and commercialization.

Industry officials view the decision as more than routine restructuring, describing it as a strategic response to pricing pressure and a broader push to overhaul corporate governance. The government is pursuing a plan to lower the pricing formula for generic drugs from 53.55% to about 45%, increasing downside pressure on earnings. At the same time, revisions to the Commercial Act are expected to add burdens related to treasury shares and governance responses.

Across the pharmaceutical and biotech sector, companies are moving quickly on steps such as disposing of treasury shares, revising articles of incorporation and expanding independent directors. The revised Commercial Act includes a principle of mandatory cancellation of treasury shares, stronger board independence and changes to the structure for appointing audit committee members, affecting management strategies across the industry. 
 
Recruitment of outside specialists is also increasing. Ildong Pharmaceutical this month appointed Dr. Park Jae-hong as its new head of the R&D division. The company said Park will oversee Ildong’s overall R&D, including new-drug research and development, and that the hire will strengthen pipeline competitiveness and further raise R&D capabilities.

SK Bioscience also hired Ma Sang-ho, a vice president and an infectious-disease research project management specialist, as head of the Research Support Office within its Bio Research Division. The company said it plans to strengthen R&D project management and open innovation, and to build a support system covering the full cycle from research planning to regulatory responses and operation of nonclinical and clinical sample analysis (GCLP).

Yuyu Pharma hired Ryu Hyun-gi as head of its Development Division. Ryu has experience in development planning and business development after working at Kwangdong Pharmaceutical, Kyungnam Pharmaceutical, Korea Pharmbio and Hanwha Pharmaceutical. Yuyu said it aims to accelerate development of next-generation improved drugs and specialized formulations through the hire.

The market expects the trend to continue for the time being. “Reorganizations centered on talent that understands clinical trials, regulatory approvals and business development are now in full swing,” a pharmaceutical company official said. “For companies seeking a breakthrough through R&D investment and securing specialized talent, it could instead become an opportunity to reset strategy.”

Meanwhile, R&D spending in South Korea’s biohealth industry has continued to rise. According to the Korea Health Industry Development Institute’s “2025 Biohealth Industry Statistical Yearbook,” corporate R&D spending in the domestic biohealth industry increased from 3.4293 trillion won in 2020 to 4.4743 trillion won in 2024.