Korea can excel in clinical trials
The top manager of the Germany-based multinational pharmaceutical company’s Korean unit also said he hopes that the government will listen more carefully to concerns by pharmaceutical firms over the push to lower drug prices. He expressed fear that the excessive focus on price cuts will discourage research and development for innovations in the industry. Reinke, 58, sat down for an interview with the JoongAng Daily this week, where he discussed a variety of topics.
On Wednesday, Reinke was granted honorary citizenship in Seoul by the city government for his contributions to the country’s culture and pharmaceutical industry development. He ranks as the first top executive of a multinational pharmaceutical company in Korea to receive that honor.
Excerpts from the interview follow.
Q. What are the characteristics of the Korean pharmaceutical market, and what is the most popular product here?
A. Korea is the world’s 12th-biggest pharmaceutical market. It is also a leading country in clinical trials, so we are doing our clinical trials here in Korea also for the Philippines and Taiwan. It’s because Korean hospitals and universities have an infrastructure of the same standards as those of European countries and excellent research data. And the government is willing to support clinical trials.
Korea is also a fast-changing market. I have been working in the Korean pharmaceutical industry for the past 12 years, seeing the lifestyle of Koreans change to a large extent. Such changes, including westernized eating styles, have brought to Korea an increase in chronic diseases such as diabetes and high blood pressure, like Europe. This means that demand for treatment of those diseases and innovative new drugs is increasing.
Sales of ethical drugs [drugs that are available only with written instructions from a doctor to a pharmacist] represent 80 percent of our sales. We are also increasing our investment in over-the-counter drugs [drugs that may be sold to a customer without a prescription].
What is BI’s level of investment in research and development in Korea?
As I said, Korea has good conditions for clinical trials in the aspect of hospital infrastructure and research data. In terms of disease control, Korean medical institutions boast advanced medical technology as well as well-trained medical staff.
BIK has conducted or is scheduled to conduct 34 clinical trials this year with an investment of 22 billion won ($18.38 billion). When I first arrived in Korea, the number of clinical tests was limited. But the clinical test field has dramatically developed, giving good educational opportunities for universities and doctors. Furthermore, the development will allow patients to get innovative drugs faster and easier.
Is BI also planning other investments in Korea, such as mergers and acquisitions?
With changes in the pharmaceutical industry, co-promotions with local companies have been a trend in recent years - not only for BIK but also for other multinational companies. We are always open to discussions for technical alliance or acquisition if we find a good Korean company or product.
Forty years ago, BI started its business in Korea as a joint venture (with the Korean company Baiksu Pharmaceutical Co.). In 2007, we acquired a 100 percent stake of the Korean unit. We have successfully settled in the market due to friendly and strong support from our partner.
Have you experienced any difficulties due to the unique business culture between pharmaceutical companies and hospitals in Korea?
Multinational pharmaceutical companies have faced difficulties due to such issues. BI created its code of conduct, signed by myself, and we are conservative in doing business (with hospitals), remaining in accordance with regulations. I know that the Fair Trade Commission conducted investigations on some local and multinational pharmaceutical companies, but BIK has not been involved in such cases.
Any other suggestions for the Korean market?
A lot of discussions about drug pricing policy are taking place in the government, and I have concerns about the direction of the discussions. Prices of patented drugs in Korea are equal to only 40 percent of those in A-9 countries, on average. Prices of patented drugs even in the Philippines are higher than those in Korea. Prices of those drugs were reduced by 35 percent after implementation of the Drug Expenditure Rationalization Plan. If the government focuses only on lowering prices, this will have a negative effect on the supply of innovative medicine as well as in R&D investment. We support the position of the government, but I believe a fair evaluation should be made in reducing drug prices. In negotiating drug prices, both sides need to communicate in a transparent manner.
By Moon So-young [symoon@joongang.co.kr]
with the Korea JoongAng Daily
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