MOHW·KHIDI to focus on fostering innovative pharma companies

Yim Kang-seop "Will foster global entries of domestic medicine by reform of the certification system"

KHIDI "To realize the goal of becoming one of the global top 5 pharmaceutical and bio-health powerhouses, we will systemically foster innovative pharmaceutical companies"

The Ministry of Health and Welfare (MOHW) and the Korea Health Industry Development Institute (KHIDI) have set fostering of 'Innovative Pharmaceutical Companies' as a primary focus for the New Year. 

As the executive government bodies overseeing Innovative Pharmaceutical Companies, the MOHW and KHIDI plan to fully utilize the certification system for Innovative Pharmaceutical Companies as a core engine for the global expansion of the domestic pharmaceutical and bio-industry.

These are the details from the New Year's policy directions announced by the MOHW Pharmaceutical and Bio-Pharma Industry Division on the 15th, as well as the major business report from KHIDI.

Currently, the Innovative Pharmaceutical Company certification system is facing a shift. The core of the government's drug price system reform plan, which it announced will be implemented this year, involves significantly differentiating drug price preference rates based on whether a company holds the Innovative Pharmaceutical Company certification. The MOHW is preparing to improve the certification system to address controversies over its practical effectiveness.

In this context, the MOHW and KHIDI have expressed their determination to leverage innovative pharmaceutical companies to advance the domestic pharmaceutical industry.

First, Yim Kang-seop, Head of the Division of Health Industry Policy at the MOHW, plans to lead the structural improvement of the domestic industry through the reorganization of the certification system.

Since the certification status is linked to the drug price reform plan, which determines the preferential price ratios for pharmaceutical companies, the reorganization aims to provide companies with specific signals regarding innovation.

Yim explained, "Over the past 10 years, innovative pharmaceutical companies have contributed to some extent in shifting the domestic industry ecosystem toward a focus on new drugs. However, even among the 48 certified companies, a significant number still rely on generics, accounting for more than 40% of their sales. We must objectively acknowledge that some companies are becoming complacent with generics."

Yim further emphasized, "We will strengthen systems so that innovative pharmaceutical companies can drive changes across the entire industrial ecosystem. We are engaged in sophisticated, strategic deliberation to ensure the drug pricing system functions as a mechanism that drives innovation, new drug development, and global expansion. We will enhance performance through the certification system reform."

KHIDI also stated its goal of actively fostering the pharmaceutical industry to realize the Lee Jae Myung administration's national task of becoming one of the global top 5 pharmaceutical and bio-health powerhouses.

First, KHIDI will support the National Bio-Innovation Committee, a governmental governance body, to provide more professional and systematic support for bio-health policies, and will establish statistics-based policies to respond to AI and new technology environments.

Additionally, KHIDI will take full responsibility for managing the expanded healthcare R&D budget of KRW 1.2 trillion.

KHIDI plans to focus on strengthening industry competitiveness by identifying policies that systematically cultivate innovative pharmaceutical companies.

Hong Heon-Woo, KHIDI's Director of Planning, announced, "We will systematically foster innovative pharmaceutical companies and pursue global expansion through linked support from AI-based advanced medical device R&D to commercialization," adding, "KHIDI's plan includes striving to achieve KRW 2 trillion in healthcare R&D by 2030 and promoting strategic R&D investment centered on promising technologies by discovering representative technologies that citizens can experience."