Call to eliminate layers of government approval to speed growth

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Call to eliminate layers of government approval to speed growth

Korea’s biotechnology industry is being smothered by the numerous government branches responsible for overseeing the industry.

The Ministry of Science, ICT and Future Planning manages medical technology and brain science, while the Ministry of Trade, Industry and Energy takes care of the biochemical and biomedical device sectors. The Ministry of Environment and Ministry of Agriculture, Food and Rural Affairs also manages certain sectors of the industry.

“There is no system in this country that allows biotech companies to share their research results, and due to the lack of such a system, some companies often research or invest in the same topic,” an industry insider said.

Japan launched the Agency for Medical Research and Development to solve similar problems last year. Prior to its establishment, Japan’s bio-health industry was overseen by three different ministries - the Education, Culture, Sports, Science and Technology Ministry; the Health, Labor and Welfare Ministry; and the Economy, Trade and Industry Ministry.

Unfortunately, because of the various levels of responsibility, many local pharmaceutical companies end up competing against themselves, while bureaucrats look on with folded arms.

The Presidential Advisory Council on Science & Technology suggested that President Park Geun-hye consider establishing an independent government organization overseeing the local biotech industry in 2013. However, not much progress has been made since then.

Technology development in the biotech industry is essential since it is a “winner-take-all” kind of market.

If one company makes a new medicine, it has the right to sell it exclusively for 20 years until its patent expires. During that time, the pharmaceutical company can make an astronomical amount of money.

Pfizer launched hyperlipidemia treatments after spending more than 1 trillion won ($850 million) for 10 years. The company made 150 trillion won from the pill within 20 years of its launch.

There is another reason for Korea to focus on the biotechnology industry. In order for the industry to grow, it requires a large amount of investment in research and development, and training talented individuals.

“The biotech industry requires various kinds of scientific knowledge, including biology, chemistry and clinical knowledge,” said Kwon Young-keun, a biochemistry professor at Yonsei University. “Even though China is known for its copying ability in electronics, machinery and shipbuilding, the country will have a hard time doing the same thing in the biotech sector.

“Korea needs to advance as far as possible before China decides to jump into it and takes over the whole market.”

Government regulation reform is also necessary for local pharmaceutical companies to become global giants.

Currently, it takes a year for companies to receive approval from the government after going through 10 years of clinical tests. The government checks the safety and effectiveness of the product for 180 days and reviews it for another 90 days. Industry insiders wonder if the length of review is necessary.

This lengthy review process was mentioned in a ministerial conference last year, but no changes have been made.

There are calls for the government to change its policy on medicine. If the government lowers the price of new biologic drugs after a company has spent tremendous amounts of money on development, it cannot be sold at a higher price overseas.

“The government needs to make an environment where more companies are willing to invest their money on research and development,” an industry insider said. “You can get both good health and economic growth with one stone.”


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