South Korean Pharma Sector To Reach $24 Billion Value By 2020
By Liisa Vexler
The pharmaceutical industry in South Korea will continue to grow over the next six years, from $19.3 billion in 2013 to an anticipated $24.3 billion by 2020 says GlobalData, a research and consulting company. As a result of relatively easy access to health insurance, combined with more demand for healthcare services from an aging population, the market for pharmaceuticals in South Korea consistently broadens in concert with continued investment from multinational drugmakers. Since South Korea’s Free Trade agreement with the United States in 2007, multinational drug makers have become increasingly interested in South Korea.
“In order to boost private investment, the South Korean government chose to provide 44 pharma companies with special benefits, such as tax reduction and exemption, funding for research projects, and a delay in drug price cuts,” says Joshua Owide, Director of Healthcare Industry Dynamics at GlobalData. “Additionally, since signing the Free Trade Agreement with the US in 2007, South Korea has lowered its import tariffs, enhanced its regulatory transparency, and attracted investment from multinational pharmaceutical companies.”
In spite of this, South Korea plans to continue to focus on generic products to maintain a handle on expenditure and decelerate the rise in healthcare spending, potentially damaging profits for brands. The nation’s generic drug market has gone up in value from $3.5 billion in 2008 to approximately $4.9 billion last year, reports GlobalData.
“Since many drugs are set to lose their patents within the next five years, South Korea’s generics industry is only going to expand further during the coming decade,” explains Owide.
GlobalData’s latest report also predicts that the South Korean pharmaceutical industry will be bolstered by a variety of government programs in the near future, for example the Korean Small Business Innovation Research program. This initiative, along with others, aims to encourage research and development and ongoing growth in the pharmaceutical industry.