[Reporter’s View] Preserve the industry's willpower

state's regulations are withering the willpower that fuels the pharmaceutical industry

Even before the world was able to recover from the COVID-19 pandemic, a global economic recession has arrived to further the damage.

 

With the rise in the price of raw materials, the price of every single consumable including food such as flour, sugar, and cooking oil, as well as fuel, utility bills, etc.

 

have risen.

 

Every day, you can see a flood of articles that report “the price of noodles has risen” or that “eggs cost a fortune these days.” In the age of rising prices, only the price of pharmaceuticals seems to be on the decline.

 

In Korea, the price of pharmaceuticals is on a constant decline under strong state control.

 

The only exception was the price of cold medicine.

 

Their price was recently raised due to a surge in demand for cold medicine during the COVID-19 pandemic.

 

This premium pricing was proposed by the government as a ‘joker card’ to incentivize companies that were reluctant to manufacture more cold medicine due to concerns over deficits.

 

The increase, which was a mere KRW 40 raise from the previous KRW 50 to KRW 90, was a rare exception made under special circumstances.

 

Looking at the government’s recent policy direction, the prospects for pharmaceuticals are even dimmer.

 

More drugs will be subject to reimbursement reevaluations that had significantly affected domestic pharmaceutical companies.

 

Choline alfoscerate drugs have already taken a blow, and other ingredients including streptokinase, almagate, and avocado-soya have been subject to reevaluations and received reductions in their scope of reimbursements or price cuts.

 

These reevaluations are expected to continue on next year.

 

New drugs are not much better off, either.

 

The government recently announced plans to include Australia and Canada as drug price reference countries.

 

Australia is known to have one of the lowest drug prices among developed countries.

 

As the drug prices in Australia are similar to or lower than that of Korea, the industry had criticized how the government is seeking to add these countries to further lower the state’s pharmaceutical expenditures.

 

Industry concerns are rising on how if Australia is included as a drug price reference country, drug prices in Korea, which are already on the lower side in the global market, will be set even lower.

 

While manufacturing and distribution costs are all on the rise, it is clear that the price of end products, the medicines, will continue to fall in Korea.

 

Even the development of new drugs is not easy to carry out.

 

Biotechs specializing in new drug development have also been experiencing a series of hardships.

 

Investments dried up due to concerns over a prolonged economic downturn, and the listing has also become increasingly difficult.

 

CEOs of bio companies are worrying about their business in the coming year.

 

Clinical results do not come out right away, and they need to hold on to the depleting investment funds no matter what.

 

Most of them are in a position to worry about corporate survival.

 

Has the government already forgotten its big talk on how the pharmaceutical and bio-industry is the next-generation growth engine amid concerns over an economic recession?

 

With the government tightening up regulations on the industry contrary to its promise, the industry is grappling for survival in the narrowing market.

 

Despite the hardship, the industry had produced 35th and 36th homegrown new drugs and presented new candidates in the largest Asian oncology society meeting this year.

 

However, these achievements were only made by a select few large pharmaceutical companies, which goes to show how much more support will be needed to nurture the growth of the domestic pharmaceutical bio industry.

 

The ‘Impossible is Nothing’ campaign that became so popular with the World Cup described the importance of willpower.

 

However, in the case of the pharmaceutical and bio-industry, it is rather the government’s willingness to preserve the industry's willpower that’s so important.