"Joint bioequivalence licensing system is driving abundant generics"

Director Lee Jae Hyun (Professor at Sungkyunkwan University College of Pharmacy) says, "If original and first drugs are only branded, INN issues will go away"

"Establishing policies to recruit top-tier physicians in the actual development of new drugs must be considered"

"Old manufacturer-centered Pharmaceutical Act should be broken down to Basic Act·Biopharmaceutical Act·Advanced Biologics Act"

Director Lee Jae Hyun

While the government announced plans to divert from the multi-item generic structure and improve the pharmaceutical industry’s trend by focusing on new drugs through drug pricing reforms, criticism has emerged that there is a need to innovate by diagnosing blind spots in the "approval system" beyond pricing alone.

In Korea, it has been pointed out that the so-called '1+3 system,' under which the government grants marketing authorization for generics based on a single joint bioequivalence (BE) study conducted by one contract manufacturer and up to three consigned pharmaceutical companies, must be discarded.

Furthermore, it has been suggested that, for the long-term development of the domestic pharmaceutical industry, the government must make a policy decision to allow South Korea's world-class clinical physician workforce to enter new drug development.

In an interview on the 29th at the Sungkyunkwan University Center for Pharmaceutical Regulatory Sciences in Yeongdeungpo, Seoul, Director Lee Jae Hyun (Professor at Sungkyunkwan University College of Pharmacy) emphasized, "Why we are seeing hundreds of generics for a single active ingredient today is not due to high drug prices, but because of the joint bioequivalence licensing system."

Regarding the '1+3 system,' which grants generic marketing authorization even to companies that did not conduct in-house BE tests but instead outsourced them to a contract manufacturer, Lee evaluated it as a "policy with no global precedent."

Lee questioned whether a company can truly be called a "pharmaceutical company" if it simply purchases BE test data conducted by others, obtains authorization for identical twin generics, and profits by releasing them to the market after merely changing the brand name and packaging.

Lee noted, "Although it was reduced to '1+3' (from the previous unlimited structure), the concept of joint BE licensing is preposterous. Even a '1+1' system, where only one consigned license is granted per contract manufacturer, makes no sense. Lee stated, "This is the fundamental cause of generic proliferation, which undermines the fundamentals of regulatory science. Why do drugs with identical shapes, ingredients, and dosages have different manufacturers, brand names, and packaging?"

Lee emphasized, "If one set of BE data exists, marketing authorization should be granted only to that specific pharmaceutical company. As long as this joint BE licensing system remains in place, a structure in which generic substitution is hindered, and generics proliferate, will persist. We should not allow companies to outsource production just by hanging up a 'pharmaceutical company' sign. We must abolish these mismanaged licensing and joint BE policies."

Lee explained, "If the licensing policy is corrected, drug price management can also be designed much more rationally. A policy could be designed that grants 'branded generic' rights only to the original and the first generic, while all other generics are authorized as 'no-brand generics' using the ingredient name rather than a brand name," adding, "Policies to increase generic utilization could become possible, and the controversy over INN (International Nonproprietary Name) prescribing would disappear, as the product name itself would be authorized as the ingredient name."

Director Lee also believes that to develop Korea-Blockbuster new drugs, Korea’s abundant clinical physician workforce must be funneled into new drug development, where basic science is essential.

While the stages of new drug development include discovery, demonstrating efficacy and safety through clinical trials, and obtaining marketing authorization, Lee suggests establishing policies to recruit physicians, one of Korea's greatest strengths, in the actual development of new drugs.

Director Lee suggested, "New drugs are not developed by government pricing policies or pharmaceutical companies. They emerge from the advancement of a country's life sciences and the continuous increase in research on new drug substances," adding, "I believe the cultivation of talent for developing new drugs ultimately lies in the utilization of the physician workforce. Implementing administration that actively utilizes Korea's globally powerful resource in the clinical trial field is the shortcut to becoming a powerhouse in new drugs."

Lee stated, "We must allow doctors to engage in new drug activities through policies such as designating university hospitals as new drug development centers, providing military service benefits to participating doctors, and expanding national-level support for new drug ventures and startups within those institutions. It is difficult to develop new drugs solely within the pharmaceutical industry or regulatory science. A policy decision is needed to use doctors as the foundation for blockbuster new drugs."

Lee added, "Furthermore, we need to consider amending the outdated Pharmaceutical Affairs Act. Korea's Pharmaceutical Affairs Act has not been changed from a generic-centered legal structure since the 1950s. While a pharmaceutical company is defined as one that manufactures and produces drugs, there is no system where a new drug developer can receive product approval as a pharmaceutical company."

Lee concluded, "We need to create a Pharmaceutical Affairs Act to manage pharmaceutical personnel, have a Drug Safety Management Act handle synthetic drugs and new drug approvals, and separate biological products from synthetic drugs through a "Biopharmaceutical Act" or an "Advanced Biologics Act," adding, "This is a matter that requires a shift in the government's regulatory paradigm. It is time to consider shifting the manufacturer-centered Pharmaceutical Affairs Act into a basic act and separately operating laws for drug distribution management, synthetic drug licensing, and biological products."