[Reporter's View] A key to the virtuous cycle of open innovation

Recently, collaboration between global pharmaceutical companies and Korean biotech companies has expanded beyond technology in-licensing to joint research and development, platform technologies, and early-stage asset discovery.   

The partnership landscape is shifting, moving away from its historical focus on late-stage clinical assets that had already undergone substantial validation toward increasingly diversified collaborative models.

Eli Lilly recently in-licensed a GLP-2-based novel drug candidate from Hanmi Pharmaceutical. Last year, the company also signed licensing agreements with domestic biotech firms for novel drug candidates, including ABL Bio, Rznomics, and OliX.

Multiple global pharmaceutical giants, including MSD, Roche, Pfizer, Novartis, Bayer, AstraZeneca, and Amgen, are also expanding joint research initiatives and promising biotech discovery programs in South Korea.  

This shift indicates that domestic biotech companies' technological capabilities are gaining significant recognition globally.

Global pharmaceutical companies review numerous candidate molecules and platform technologies every year. They make investment decisions only after comprehensively assessing R&D probability of success, clinical competitiveness, and commercial viability. While a technology transfer or co-development agreement does not automatically guarantee the ultimate success of a novel drug, it at least signifies that the technology has secured an opportunity to validate its competitiveness in the global market.

The South Korean government is also emphasizing open innovation as a core pillar of its biotech industry growth strategy. The objective is to enhance the probability of success in developing innovative new drugs by blending domestic R&D capabilities with the development and commercialization expertise of global pharmaceutical companies. 

Even if a technology discovered by a domestic company is advanced into a novel drug through collaboration with a global pharmaceutical company, it faces evaluations focused on clinical utility and cost-effectiveness when entering the Korean market.

This is a reasonable principle. National health insurance finances are finite, and marketing authorizations and reimbursement decisions must be adjudicated on the basis of objective evidence. A product cannot receive preferential treatment simply because it was developed by a specific company or within a particular country.  

However, given that the government is actively pursuing open innovation and nurturing the biotech industry as a key national strategy, discussions are necessary on how to evaluate the value of innovation generated by the domestic R&D ecosystem within the current institutional framework.  

When a technology discovered by a domestic firm proves its competitiveness in the global market through collaboration with a multinational pharmaceutical company, careful consideration is necessary as to whether it is appropriate to view the achievement as parallel to other imported novel drugs.

In fact, several domestic technologies successfully entered global standard-of-care treatment areas through partnerships with global pharma, considerable time remains before domestic patients can tangibly experience those benefits. This is because the process of settling globally recognized innovation within local clinical practices requires clearing an entirely separate set of regulatory and pricing hurdles.

Of course, this does not imply that marketing authorization or reimbursement criteria should be relaxed. The core principle of cost-effectiveness and clinical value must be rigidly maintained.

However, if the state is politically incentivizing the vitalization of open innovation and the promotion of the bio-industry, discussions must simultaneously take place on how to adequately reflect the value of the innovation generated through that very process.

There are clear limitations to evaluating the outcomes of open innovation solely by total contract size for technology exports or by the volume of upfront payments. The virtuous cycle is truly completed only when innovation discovered domestically undergoes global development and ultimately returns to contribute to the treatment of patients in South Korea.

The government labels the biotech sector as a future growth engine. Global pharmaceutical companies are also competing to seek out the technologies of South Korean enterprises. Now is the time to take a step beyond merely exporting technology and deliberate on structural frameworks that ensure these achievements extend seamlessly to the Korean market and patients.