[Viewpoint]Korea’s ailing drug makersKorean drug companies are facing a harder time than ever. Having landed in Korea decades ago, numerous multinational enterprises occupy three-quarters of the local drug market.
Nowadays, drug companies are pouring new drugs into the health care arena from all over the world. Korea is no exception, but is still on the verge of a crisis.
Of a total 700 Korean drug companies, about 500 are actually manufacturing drugs. However, roughly ninety percent of these companies are small fry on the international market. The average annual sales of major Korean pharmaceutical companies range from $100 million to $600 million. The sum of annual sales of Dong-A, the top Korean drug maker, is about $600 million, just a hundredth that of Pfizer, the top global firm in the field.
The completion of a human genome project accelerated innovation in pharmaceutical manufacturing. Numerous drugs being developed are aiming at various molecular targets. Among them, imatinib (sold as Glivec or Gleevec) is a revolutionary drug that made a big bang at the very beginning of this century. The drug is called a global blockbuster, and more than $500 million worth of it has been sold.
Although Korean companies made best selling drugs like eupatilin (Stillen), udenafil (Zydena) and revaprazan (Revanex), no agent has sold more than $50 million worth.
The world’s top drug companies have not only manufactured blockbusters but have also absorbed other big companies in the sector. Mergers and acquisitions are very much in vogue among global companies as a corporate strategy in the cut-throat competition of the free market.
Trading licenses is another strategy. Following other global companies, several drug makers in Korea have begun to invest heavily in research and development and trade licenses. Hanmi Pharmaceutical Company, for example, has been investing as much as 10 to 15 percent of its sales in R&D for decades.
However, developing a new drug is a very difficult job requiring high technology, endurance, abundant financial resources and legal support. On average, it takes 15 years from the initial research to the marketing of the drug. It usually costs at least $10 million per drug. That is why major Korean drug companies are interested in drug copying or modification rather than creating entirely new medicines.
Despite many difficulties, several drug companies dared to go ahead and create new drugs, such as heptaplatin (Sunpla) by SK Chemical, belotecan (Camtobell) by Chongkeundang, paclitaxel polymer micelle (Genexol PM) by Samyang, holmium nitrate (Milican) by Donghwa, and gemifloxacin (Factive) by LG Life Science. These drugs were neither blockbusters nor were they approved by the U.S. Food and Drug Administration or the European Medicines Evaluation Agency, except for Factive, which was approved by the FDA.
Governmental support and protection is important in the promotion of new drug development. Former French President Jacques Chirac exercised active political influence over the M&A of Sanofi and Aventis, preventing both from merging with foreign companies. The Korean government also supports drug companies. Between 1998 and 2007, Korean drug companies were given $73 million for new drug projects.
Developing drugs for the global market is not an easy job. It is risky and expensive. It requires many steps including drug design, pre-clinical study, clinical trial and marketing. The most important and costly step is the clinical study, in which the new drug has to be proven superior, or at least not inferior, to conventional drugs. The Korean Cancer Study Group started promoting a multi-institutional clinical trial in Korea a decade ago. The approval of Sunpla, Camtobell or Genexol PM would have been impossible without cooperation between the academy and the industry.
Although it looks like a David and Goliath battle, there is no way out for Korean pharmaceutical companies but to fight global firms by developing new drugs. Several companies have already built the necessary high technology and have begun to screen promising drugs like phosphodiesterase-5 inhibitors, oxazolidinone antibiotics, recombinant FSH, anti-hepatitis B DNA vaccine, anti-HIV naked DNA vaccine, and many sustained release growth factors or hormones. These research products must undergo clinical trials, and cooperation between industry and universities is needed now more than ever.
Korea, as a natural resource-poor country, may have to benchmark Switzerland to become a pharmaceutical powerhouse.
The governmental policy of cutting drug prices or encouraging drug copying should be discontinued. Korean people must realize that drug companies are not charities but an interest group. For them to survive, relying on the market is the best policy.
Drug development is a total enterprise encompassing industry, institutions and government. Institutions and government should provide the infrastructure to help industry. The Ministry for Health, Welfare, and Family Affairs recently empowered the Korean National Enterprises for Clinical Trials to govern regional clinical trials, the training of personnel involved and development of clinical trial technology to meet the growing demand for high quality clinical trials offered by global companies as well domestic ones.
They appear to be heading in the right direction.
*The writer is a professor of medicine and director, Comprehensive Cancer Center, Inha University Hospital and School of Medicine.
with the Korea JoongAng Daily
To write comments, please log in to one of the accounts.
Standards Board Policy (0/250자)