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- 2026-04-23 23:47:46
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- Philips Korea's sales staggering…shift to service-centric
- by Hwang, byoung woo Apr 23, 2026 10:51am
- Philips Korea’s sales growth, which had been on a recovery trend since 2023, has stalled, with growth rates remaining in the 1% range.However, during the same period, operating profit increased significantly, showing an actual improvement in profitability. This is interpreted as the result of a shift in the sales mix, moving away from a hardware sales-centric structure toward services, including maintenance and software.Analysis suggests that amid intensifying competition in the large-scale medical equipment market, the future growth is shifting from hardware to software and solutions.Sales Growth 'Stalls,' Operating Profit 'ReboundsAccording to Philips Korea’s recently disclosed audit report, the company’s sales growth appears to have entered a period of stagnation.Specifically, sales, which recorded KRW 336.6 billion in 2021, decreased to KRW 316.1 billion in 2022 before rebounding to KRW 352.9 billion in 2023.Since then, however, sales reached KRW 361.6 billion in 2024 and KRW 364.6 billion in 2025, marking two consecutive years of growth limited to the 1% range following the 2023 rebound, maintaining a slowing growth.One of the primary reasons for this sales stagnation can be traced back to the large-scale business restructuring carried out in 2021. As of September 9, 2021, Philips Korea completed the divestment of its Domestic Appliances division, which was highly profitablePhilips Korea's 5-Year Sales & Operating Profit: BLUE-Sales, RED-Operating profit (source: audit report, unit: KRW 100 million)This was part of Philips’ global 'Selection and Concentration' strategy to focus on the healthcare B2B (business-to-business) sector.Considering that the Domestic Appliances division generated approximately KRW 41.8 billion in annual sales at the time, the separation of this core consumer cash cow is interpreted as a factor in the reduction of the company's overall scale.In contrast to the slowdown in top-line growth, profitability improved significantly. Philips Korea’s operating profit shifted from KRW 42.7 billion in 2021 to a loss of KRW -4.9 billion in 2022.After successfully returning to a surplus of KRW 1.8 billion in 2023, profit showed a recovery to KRW 7 billion in 2024, followed by KRW 36.4 billion in 2025, a more than five-fold improvement compared to the previous year.This indicates that focusing on internal stability and reorganizing the portfolio toward high-value-added businesses, rather than external expansion, has proven effective.Philips Diversifies the Profit Structure, Shift From Product Sales to 'Service'The primary reasons for the improvement in operating profit are cost reductions and lower selling, general, and administrative (SG&A) expenses.The cost of goods sold, which was KRW 270.7 billion in 2024, decreased to KRW 246.3 billion in 2025, and SG&A expenses also fell by approximately 2 billion KRW, from 83.8 billion KRW to KRW 81.8 billion. Essentially, while sales barely grew, profit rose by simultaneously reducing costs and expenses.Furthermore, the fact that the sales structure is increasing 'service sales,' which provides maintenance and software-linked solutions in addition to equipment delivery, appears to have influenced the improvement in profitability.Looking at Philips Korea’s sales structure by business segment (item), product sales decreased from KRW 242.9 billion in 2021 to KRW 219.6 billion in 2022, before recovering to ▲KRW 249.9 billion in 2023 and ▲KRW 254.6 billion in 2024.However, in 2025, product sales recorded KRW 253.6 billion, showing negative growth compared to the previous year.In contrast, service sales has been on a steady upward trajectory, with no negative growth. Service sales, which was KRW 93.7 billion in 2021, recorded KRW 96.5 billion in 2022, ▲KRW 102.9 billion in 2023 ▲KRW 106.9 billion in 2024 ▲KRW 110.9 billion in 2025.The share of service sales in total sales also expanded from 27.8% in 2021 to approximately 30.4% in 2025.Considering the characteristics of the Korean market, where replacement cycles for large medical equipment (MRI, CT, ultrasound, etc.) are long and large-scale orders following the establishment of new hospitals are limited, the expansion of service-oriented sales, such as software upgrades and Service Level Agreements (SLA) for pre-installed equipment, is analyzed to have played a key role in defending profitability.Philips is expanding its cooperation by signing smart hospital business agreements with major hospitals.Intensifying Imaging Competition… The Challenge of Growth DriversBecause of this, Philips Korea is also seeking a breakthrough by creating a digital healthcare environment centered on artificial intelligence (AI) technology.As global competitors such as Siemens Healthineers and GE HealthCare integrate AI solutions with hardware, Philips is moving to capture the early market.For example, Philips Korea is establishing smart hospital collaborations focused on AI-based improvements to ultrasound and imaging workflows.With the recent domestic medical environment emphasizing smart hospitals amid personnel shortages, Philips appears focused on embedding its portfolio, spanning diagnostic imaging·ultrasound·interventional procedure systems, into these systems.However, expanding the influence of diagnostic imaging equipment, which is the most fundamental driver of external growth, remains a challenge.In this context, Philips' next-generation spectral CT, the Verida system, which recently received U.S. Food and Drug Administration (FDA) clearance, could potentially provide a way forward.The core of Verida system is its spectral technology. While most CT scanners focus on providing structural information by imaging the human body at a single energy, spectral CT analyzes differences in tissue composition across multiple energy spectra.As it promotes clinical efficiency improvement rather than just simple image quality enhancement, there is potential for synergy with future smart hospital system construction.An official from the medical device industry stated, "While Philips Korea's new products and technological innovations, such as helium-free MRI and cardiac ultrasound, are receiving positive responses, hospital investment decisions are made on a mid-to-long-term basis due to the nature of the market," and added, "The impact of new products is more likely to be reflected in mid-to-long-term trends rather than short-term performance."
- Policy
- Will the DoctorNow Prevention Act pass the National Assembly?
- by Lee, Jeong-Hwan Apr 23, 2026 10:51am
- Whether the amendment to the Pharmaceutical Affairs Act, which prohibits non-face-to-face medical treatment platforms from operating as pharmaceutical wholesalers, can be tabled and passed during the final plenary session of the 22nd National Assembly, scheduled for the 23rd, is drawing significant attention.The bill, called the "Doctor Now Prevention Act," was originally expected to be processed in a plenary session last year alongside the amendment to the Medical Service Act to institutionalize non-face-to-face treatment. However, it has been pending for over five months due to opposition from some ruling and opposition party lawmakers, as well as the Ministry of SMEs and Startups, for the reason that it undermines the revenue-generating models of startups.On the 21st, the ruling and opposition parties agreed to holding a plenary session on the 23rd to wrap up the first half of the 22nd National Assembly ahead of the June 3 local elections.In particular, the ruling party has expressed its determination to process as many livelihood bills awaiting final disposal as possible at this closing point of the first-half session, citing that approximately 120 bills are currently pending in the plenary session.This is why all attention is on whether the inclusion of the Doctor Now Prevention Act to the Pharmaceutical Affairs Act can be tabled and passed during this plenary session.For now, the Democratic Party of Korea’s Policy Committee maintains the position that there is no reason for the bill not to be processed. Their view is that it is irrational and abnormal to delay the passage of the bill due to backlash from a specific company, especially after the bill already passed the committees, including the Health and Welfare Committee and the Legislation and Judiciary Committee, with bipartisan agreement.Furthermore, despite the strong determination of the Ministry of Health and Welfare to pass the bill, the leadership of the Democratic Party reportedly views it as unprecedented for a bill, which is only awaiting plenary processing following legitimate legislative procedures, to be suddenly modified because a related ministry, the Ministry of SMEs and Startups, raised a differing opinion, leading to inter-ministerial conflict.Nevertheless, the outlook for tabling and processing the Pharmaceutical Affairs Act amendment in the plenary session on the 23rd remains challenging. This is because the legislative opposition from lawmakers in 'Unicorn Farm,' a bipartisan research group for startups and ventures, remains intense, and internal party alignment has not been definitively settled.Consequently, the Ministry of Health and Welfare has been placed in a position where it can do nothing but wait for the National Assembly's decision. Even if a non-face-to-face treatment brokerage platform establishes and operates its own pharmaceutical wholesaler to generate revenue through management that carries a high risk of conflict of interest, the ministry has no choice but to remain a bystander.An official from the ruling party explained, "The Democratic Party’s Policy Committee views that a platform's operation of a wholesaler cannot be regarded as startup innovation or a legitimate revenue model, and thus believes it is necessary to pass the Pharmaceutical Affairs Act in its original form in the plenary session on the 23rd," and added, "This bill is also essential for the institutionalization of non-face-to-face treatment. However, the fact that some disagreements within the party remain is an issue that must be resolved promptly."
- Policy
- CPAC agrees on designating GLP-1 obesity drugs as medicines of concern
- by Lee, Tak-Sun Apr 23, 2026 10:50am
- The majority of members of the Central Pharmaceutical Affairs Council agreed on the need to designate GLP-1 obesity treatments as 'drugs of concern for misuse or abuse.' There were also reactions suggesting that the designation is expected to raise awareness among the public who may not recognize these as prescription-only medications.According to the minutes released on the 21st regarding the meeting held by the Central Pharmaceutical Affairs Council (CPAC) on ‘Validity of Designating GLP-1 Class Obesity Treatments as Medicines of Concern for Misuse or Abuse,’ committee members unanimously agreed that the designation is appropriate to curb indiscriminate use by patients and the sharing of misinformation online.As a result of the meeting, all 9 attending members voted in favor of the designation, and the motion was passed. The CPAC members assessed the current situation where GLP-1 class treatments are being misused by the general public despite being prescription-only drugs as serious.One member stated, “The designation can provide a reminder to the public that these are prescription drugs,” supporting the designation.Another member pointed out, “We need a mechanism to eradicate inappropriate behaviors, such as the sharing of reviews on platforms like YouTube describing how people ‘splitting’ expensive medications.”The fact that the need for this designation has been consistently raised by the media and the National Assembly, as well as the need for equity with other medications, were cited as key grounds for the decision. One of the key regulatory measures of this designation is restricting handling in pharmacies located in areas exempt from the prescription–dispensing separation system, specifically blocking purchases without prescriptions.Committee members viewed prescription restrictions in these exempt areas as necessary to prevent cases where the drugs are prescribed to inappropriate groups, such as pregnant women or children.One committee member emphasized that “pharmaceutical companies are unlikely to suffer significant losses from this designation,” stressing that the public interest outweighs the administrative burden of the regulation.The designation includes liraglutide (Saxenda), semaglutide (Wegovy), and tirzepatide (Mounjaro).In particular, the MFDS explained that ‘Mounjaro,’ which is used to treat both diabetes and obesity, is subject to the ‘drug of concern for misuse or abuse’ designation because it includes an obesity indication.However, some committee members added, “We are concerned that designating these drugs as ‘drugs of concern for misuse or abuse’ may create a negative perception of the medication in a situation where obesity should be treated as a disease.”Based on the results of this review, the MFDS plans to require the phrase ‘drug of concern for misuse or abuse’ to be printed on the packaging of GLP-1-based obesity treatments and to strengthen oversight to ensure they cannot be sold without a prescription, even in exception areas.
- Policy
- Kanarbzet, Sogroya newly reimbursed next month
- by Lee, Jeong-Hwan Apr 23, 2026 10:50am
- Boryung Pharmaceutical’s triple-combination drug for hypertension and dyslipidemia, ‘Kanarbzet Tab,’ will be newly reimbursed from next monthBoryung Pharmaceutical’s triple-combination drug for hypertension and dyslipidemia, ‘Kanarbzet Tab,’ and Novo Nordisk Pharmaceutical’s long-acting growth hormone ‘Sogroya’ will be newly listed for reimbursement next month (May).Viatris Isoptin Inj, Epic Cholestyramine Powder, and Senra 5-HTP, supplied through the Korea Orphan & Essential Drug Center, will also newly obtain reimbursement.Ono Pharmaceutical’s Opdivo Inj(120 mg) and the autoinjector formulation of GSK’s Nucala will be newly listed for reimbursement, while Daewon Pharmaceutical’s Pelubi and Janssen’s Erleada will have their reimbursement price ceilings reduced.LG Chem’s Zemidapa, which had been scheduled for a price reduction, will retain its current price.On the 21st, the Ministry of Health and Welfare partially revised and issued the “Drug Reimbursement List and Reimbursement Price Ceiling Table” containing these changes.Boryung’s Kanarbzet Tab, a combination of the antihypertensive drug Kanarb (containing fimasartan) and the hyperlipidemia drugs atorvastatin and ezetimibe, will be priced at KRW 1,644 per tablet for the 30/10/10 mg formulation, the 30/20/10-milligram formulation is KRW 1,646, the 60/10/10-milligram formulation is KRW 1,753, and the 60/20/10-milligram formulation is KRW 1,755.Sogroya Prefilled Pen 15mg/1.5ml will be listed for reimbursement at KRW 277,624 per pen, and Opdivo Injection 120mg at KRW 1,318,822 per vial.The price of Viatris Isoptin 5 mg Inj is set at KRW 3,491 per 2 ml vial, Epic Cholestyramine Powder for Susp at KRW 1,604 per 4 g packet, and Cenra 5-HTP 100 mg Cap at 2KRW 790 per capsule. The price of the Nucala autoinjector is set at KRW 1.28 million per pen, the same as the existing injectable formulation.Among already listed drugs, Pelubi Tab and Pelubi SR Tab will have their reimbursement ceilings reduced by 46.7% and 23.0%, respectively, on the 1st of next month. Among these, the reimbursement ceiling for Pelubi SR Tab will be further reduced by 23.5% starting August 1.The reimbursement ceiling for Janssen’s Erleada Tab will also be reduced by 29.3% on the 1st of next month, while Kyowa Kirin’s Orkedia Tab 1 mg and 2 mg will each be reduced by 2.0%.Kolon Pharmaceutical’s Kotuss 50 mg will be reduced by 0.4%, and Chong Kun Dang’s Dilatrend SR 32 mg by 0.1%Meanwhile, Zemidapa Tab, which had been scheduled for a 15.5% reduction next month, will maintain its current ceiling, and the reduction will be postponed to May 1 next year.
- Policy
- INN Prescribing Bill may be excluded from April subcommittee
- by Lee, Jeong-Hwan Apr 22, 2026 08:54am
- The Health and Welfare Committee of the National Assembly has decided to hold a legislative subcommittee meeting on the 28th. However, as the ruling and opposition parties have agreed not to table bills under debates, the legislation that would partially mandate International Nonproprietary Name (INN) prescribing by physicians is expected to be excluded from the review agenda.The bill, a national task for the Lee Jae Myung administration and proposed by members of the ruling Democratic Party of Korea, is strongly opposed by the medical community. Furthermore, lawmakers from the main opposition People Power Party maintain a stance of cautious review or outright opposition. Consequently, the likelihood of reaching a bipartisan agreement to include the bill in this month's subcommittee has diminishedIf the bill is excluded this month, after failing to gain a review opportunity last month due to medical community resistance, the INN Prescribing Bill is expected to be considered during the subcommittee meetings held after the June 3 local elections.On the 20th, the executive secretaries of the Health and Welfare Committee agreed to hold the 1st and 2nd Legislative Subcommittees on the 28th. The plan involves reviewing bills under the jurisdiction of the 1st subcommittee in the morning and the 2nd subcommittee in the afternoon. On the following day, the 29th, a Petition Subcommittee will be held, followed by a plenary session to process the bills passed by the subcommittees.The executive secretaries have requested that individual members' offices submit the bills they wish to have reviewed. While the final agenda is determined through bipartisan consultation, the agreement to prioritize 'non-controversial bills' makes it highly likely that the bill mandating INN prescribing for national essential drugs and medicines in unstable supply, a major point of interest in the healthcare sector, will be excluded for the second consecutive month.The proposed amendments to the Medical Service Act and the Pharmaceutical Affairs Act, introduced by Rep. Jang Jong-tae and Rep. Kim Yun of the Democratic Party, would legally mandate physicians to use active ingredient names rather than brand names when prescribing national essential medicines or drugs with unstable supply.While the legislation aims to address social inconveniences, such as patients "pharmacy hopping" due to long-term drug supply instability, the medical community remains adamantly opposed. Kim Taek-Woo, president of the Korea Medical Association (KMA), has repeatedly stated that if the INN Prescribing Bill is tabled, the KMA will gather physicians nationwide for outdoor protests.Since the People Power Party sympathizes with the medical community's opposition, a bipartisan agreement is unlikely even if the Democratic Party requests a review.Furthermore, as this month's subcommittee is condensed into a single day for both the 1st and 2nd subcommittees, unlike the usual practice of dedicating a full day to each, the probability of tabling a highly contentious bill like INN prescribing is even lower.An official from a member's office on the Health and Welfare Committee explained, "We are currently at the stage of selecting bills for review as requested by each office. Since this subcommittee is being held just a month before the June 3 local elections, both parties have agreed to table and process only non-controversial bills."The official added, "The INN prescribing bill is an issue with significant disagreement, including opposition from doctors, making it difficult to include in this subcommittee's agenda. If it is not reviewed this time, it will likely only be possible after the National Assembly is formed in the second half of the year following the local elections."
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