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South Korea Pharmaceuticals and Healthcare Report Q1 2011
Business Monitor International, Nov 2010, Pages: 105
South Korea Pharmaceuticals and Healthcare Report provides industry professionals and strategists, corporate analysts, pharmaceutical associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on South Korea's pharmaceuticals and healthcare industry.
South Korea has a highly developed and growing economy, which is reflected in BMI’s forecast for the country’s pharmaceutical market. Drug market expenditure is forecast to reach almost KRW19,327bn (US$19.33bn) at consumer prices in 2014 (with a forecast CAGR of 7.1% in local currency terms), supported by an aging population with rising demand for drugs as well as the planned liberalisation of the health insurance sector. By 2019, pharmaceutical expenditure is expected to have reached KRW26,500bn (US$26.50bn).
Changes to South Korea’s medicine pricing and purchasing regime were announced in the first half of 2010. The government is planning to reduce maximum drug prices by 15-25% over the three years starting from October 2010. BMI expects that increased volume consumption will offset much of these negative pricing pressures. However, if volume growth fails to materialise, market values could be affected more severely.
BMI would describe South Korea as a transitional pharmaceutical market. Characteristic of an emerging market, combined sales of prescription drugs and OTC medicines are forecast to post high single-digit CAGRs over the next five years. However, the operating environment is similar to that seen in traditional markets.
South Korea’s pharmaceutical business environment was ranked third in the Asia Pacific region in Q111. The country’s pharmaceutical BER score has increased from 67.0 in Q410 to 67.9 in Q111, placing it seven points clear of fourth-placed China. In terms of both ‘rewards’ and ‘risks’ indicators, South Korea is rated amongst the most attractive markets in the region.
Local industry has traditionally focused on generics. However, several domestic players including Chong Kun Dang have been looking to branch into originator drugs, supported by the country’s strong research and development (R&D) infrastructure.
In October 2010, South Korean consumer electronics manufacturer Samsung Electronics revealed its intention to purchase a controlling stake in local medical device company Medison. At the same time, some medical device manufacturers are expanding into other pharmaceutical and medical fields. For example, in October 2009, South Korean Arigene acquired US-based biotechnology firm Trimeris for US$81mn. The US company is developing therapeutic agents for the treatment of viral diseases.
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