[Reporter’s View] Decreased vaccine funding during endemic

Can we still expect it to be effective?

K-bio and Vaccine Fund No.3 is soon to be launched.

 

Considering the recent contraction of the investment market, the entire amount of KRW 40 billion of investment money from the government and the government-run bank has been invested, regardless of the formation size.

 

Once the initial formation of KRW 70 billion is raised, early investment will be possible.

 

In August 2022, the Ministry of Health and Welfare (MOHW) announced the establishment of the K-Bio and Vaccine Fund as part of the government’s policy commitments.

 

The MOHW stated that it had invested KRW 50 billion and KRW 100 billion each in two funds, with additional investments of KRW 100 billion from the government-run banks (Korea Development Bank, Korea Eximbank, and Industrial Bank of Korea) and KRW 300 billion of private capital.

 

These funds will be used to support companies that engage in vaccine development.

 

However, the investment amount in the fund has gradually decreased.

 

Few companies invest in funds due to a frozen private investment market.

 

While the government raised KRW 261.6 billion through the K-Bio and Vaccine Funds No.1 and No.2, the investment size has now reduced to KRW 70 billion in No.3.

 

In fact, this trend is not irrelevant to the end of the COVID-19 pandemic.

 

In 2022, various Korean pharmaceutical and biotech companies like GC Biopharma, Ilyang Pharmaceutical, Genexine, and Shin Poong Pharm challenged the COVID-19 vaccine and treatment.

 

However, with the shift of COVID-19 to the endemic phase, many of them either suspended clinical trials or withdrew development plans.

 

With the waning interest from the government, the pharmaceutical and biotech industry, and citizens, the presence of the vaccine fund is now in question.

 

The size of the vaccine fund is also raising concerns.

 

Industry experts argue that an investment size of trillions of Korean won is necessary to develop new domestically developed drugs.

 

However, the government reduced the fund’s size to KRW 1 trillion.

 

Since the fund has not reached KRW 1 trillion, it is anticipated that Fund No.3 is expected to end with the formation of less than KRW 100 billion.

 

When combining the sizes of Funds No.1, No.2, and No.3, the total is less than KRW 500 billion.

 

In particular, the current fund size of KRW 300 billion is insufficient to support even late-phase clinical trials for a single pharmaceutical and biotech company.

 

Many companies that develop new drugs domestically are abandoning development due to the high costs involved in phases 2 and 3.

 

Most companies are unable to progress to phase 2 clinical trials.

 

In the end, it may be difficult for President Yoon Suk Yeol to secure the vaccine and treatment technology to prepare for the Next Pandemic, as he has advocated since his inauguration.

 

The vaccine fund is now non-commital due to the COVID-19 endemic and insufficient funds.

 

There is a prevailing sentiment in the industry that instead of having high expectations for policies, the focus is on the government designating biotech as a promising industry and showing interest and support.

 

Despite the heavy impact of the COVID-19 pandemic on Korean citizens, the government’s efforts to secure vaccines and treatment are waning with the announcement of the endemic.

 

Doubts are emerging about whether the government plans to increase vaccine funds if infectious diseases like COVID-19 occur again.

 

During this period, there are concerns regarding the course of government policies.