Health ministry targets generic drugmakers for export push

The health ministry said Wednesday it convened a public-private council in Seoul to push South Korea's generic drugmakers toward larger scale and export markets, as it sought to address an industry it described as fragmented and overly dependent on sales competition.

The third meeting of the Pharmaceutical Industry Innovation Public-Private Council, held at the Sangyeonjae Seoul Station branch, brought together government officials, public institutions, industry associations, companies and experts, the ministry said. The discussion focused on strengthening the competitiveness of generic-focused companies and converting them into exporters.

A system that allows contract manufacturing and joint bioequivalence testing has entrenched a large number of small pharmaceutical companies producing and selling similar products, the ministry said. Because individual firms have limited capacity to invest in research and development, they concentrate their resources on promoting generics, leading to excessive sales competition.

"For the domestic generic industry to move beyond price and sales competition in the home market and advance into the global market, companies need to improve their fundamentals through scale and specialization," said Jung Kyung-sil, head of the ministry's health care policy office.

Kongju National University professor Song In-myung presented reform cases from China, India and Japan, while Jeon Hwan-ju, a team leader at the Korea Health Industry Development Institute, analyzed business models and growth strategies by company type.

The council also discussed ways to tighten supervision of pharmaceutical sales agents, known as CSOs, building on the work of a working-level subcommittee formed to address excessive sales competition in generic drug promotion.

Noh Yeon-hong, chairman of the Korea Pharmaceutical and Bio-Pharma Manufacturers Association, said generics represent an important stepping stone for overseas expansion alongside improved new drugs and global blockbusters.

He added that the industry would strengthen quality competitiveness and R&D investment, and that the association would work closely with the government to raise the global competitiveness of Korean-made medicines.

Jung said the ministry would actively review institutional improvements and support measures so that generic companies can grow into exporters with R&D capabilities.

The ministry said it plans to use the council's discussions and recommendations in drawing up measures to develop the domestic generic drug sector.