Korea is reliable in the field of active pharmaceuticals ingredient (API) manufacturing and supplying, having developed quality processes in their extensive partnerships with multinational companies. They currently produce high-quality ingredients in the domestic market, adhering to cGMP regulations. As the market experiences growth, Korea may be interested in sourcing high quality APIs abroad, which is a potential market for India to enter.
Indian pharm companies can view Korea only for APIs. Here is no scope to export formulations because the country is way ahead in this manufacturing process, said industry experts. This is despite the growing prominence of Korea as a manufacturing hub in the Asia Pacific region.
The leading companies in Korea are Donga A Pharma and Daewoong Pharma. API is already happening. But finished dosage forms would be difficult, GG Gurudatta, CEO, Estima Pharma.
“There are about 400 pharma companies in Korea. Because of Korea’s Health Insurance policy which was introduced three years ago, many pharmaceutical companies are not doing good in their local market itself. In such cases, importing would be difficult. However, if any company is having niche product, then companies in Korea will look to import. However, at present, many Korean companies are looking for exports from Korea to African continent, Europe and US as well, added Gurudatta.
The pharmaceutical industry, which plays a pivotal role in economic growth and quality healthcare, is gearing up to boost to meet the government's objective, according to KRPIA, the regulatory authority of Korea.
Korea is a market for active pharmaceutical ingredients and not for formulations. There are hardly very few companies in India which evince interest in Korea. If at all they do they go through agents, said Sriram V Iyer, CEO, Valuegen Pharma Pvt. Ltd.
According to Gurudatta, so long Korean pharma companies were facing a tough competition in the domestic market. This is because of the national insurance policy which was introduced couple of years back. Due to this, survival in the domestic market has become difficult. Hence concentrating on export market has become imminent for Korean pharma companies. None of the Korean pharma companies have joint venture partnership with companies in the European Union. They do not have required connectivity in the European market. Apart from this, pharma companies do not have full-fledged quality systems which will meet European or USFDA requirements. Language is also seen as big barrier to trade. Considering these, Korean FDA has announced to join PICS scheme with effect from July 1, 2014. All the pharma companies need to adopt to PICS quality systems which are equivalent to European standards. But, in order to do this, the present human capital does not have enough knowledge and capability to incorporate the PICS systems. Hence, KFDA gave one year time from till July 1, 2014 to its pharma companies to adhere to this regulation. Now it would be much easier to export to Korea but too early to comment.
The API market in Korea by type is categorised into innovative API and generic API. The innovative APIs segment accounted for same share as that of the generic API market in 2015. Patent protection of innovative APIs and higher prices compared to their generic equivalent are major factors driving the market growth for this segment. The API market, by type of manufacturer, is segmented into captive and merchant manufacturers. The captive manufacturers segment accounted for major share of the total API market. The API market is expected to be dominated by captive manufacturers in 2015; however, it is slowly losing its share to contract manufacturers, owing to the complexity and high expenses associated with in-house manufacturing of API as well as the increased competition from emerging contract manufacturers.
As for the Korean pharmaceuticals industry, during the past 30 years there has been marvelous advancement in new drug research and development; market launched 32 new drugs approved by the Korean regulatory agency (KFDA), US-FDA approved two drugs, world's first monoclonal antibody biosimilar, around 15 IND-approved (by US FDA, EMA) new drug candidates, 100 out-licenced (to 26 countries) new drug candidates & technologies. Korea has already launched more than 150 finished APIs in overseas market including the US and EU. The market for generic merchant API is expected to witness higher growth attributed to increasing healthcare costs, government emphasis on generics for reducing healthcare costs, and decreasing pipelines of global pharmaceutical products.
Recently the Korean government (the ministry of health & welfare) in accordance with the provisions of the Act for supporting & raising pharmaceuticals industry has designated 44 Korean pharmaceuticals companies including one foreign-based company as Korea innovative pharmaceuticals company to provide special benefits in tax reduction & exemption, preferential governmental research funding, postponement of drug price cutting down and so on in order to promote R&D investment in APIs and formulations to support sustainable growth. More than anything else this means that the government guide and urge the industry to be innovative to become the leading industry in global market through the designation of innovative pharmaceuticals companies to be appealed to the whole pharmaceuticals industry as role-model. Korean government has also been supporting tremendous governmental fund to new drug & API R&D areas since 1987 .
Biotech APIs are estimated to account for smaller share of the market as the use of biotechnology in pharmaceuticals industry is a relatively new concept, and is still in the infancy state. However, it is expected to show high growth owing to the boom in biotechnology industry worldwide and advances in manufacturing and processing techniques of biopharmaceuticals coupled with increasing demand for the treatment of cancer and diabetes.