Will the new social distancing benefit the prescription mkt?

Korea will ease social distancing rules including private gathering restrictions from July

Outpatient prescription sales in May down 2.4% YoY… downward trend continues from April

Increased outdoor activity · vaccination raises expectation for market rebound

New social distancing rules will be applied from next month.

 

The restrictions set on private gatherings will be eased, and the operating hours of multi-use facilities will also be extended.

 

The pharmaceutical industry has its eyes on whether the outpatient prescription market, which has contracted due to a decrease in outdoor activities, will take a turn for the better under the new regulations.

 

According to the pharmaceutical research institution UBIST on the 21st, outpatient prescription in May this year was around 1.15 trillion won, down 1.1% YoY.

 

This is a 10.4% fall compared to the market’s performance in May 2 years ago.

 

This downward trend has been continuing since last month, as outpatient prescription in April was also reduced by 0.3% YoY to record 1.18 trillion won.

 

The accumulated outpatient prescription in May this year was 5.91 trillion won, down 2.4% from the same period of the previous year.

 

The aggregate prescription sales in May were 5.91 trillion won, down 2.4% YoY.

 

The prescription market was hit the hardest in April to May last year due to the aftermath of the COVID-19 outbreak.

 

Monthly outpatient prescription sales trend (Unit: 100 million won, Source: UBIST)

Prescription in April and May last year were each lower by 8.7% and 9.4% YoY.

 

At that time, with the COVID-19 spreading in full pace, patients with chronic diseases such as hypertension and diabetes chose to avoid visiting medical institutions by receiving prescriptions for the long-term, creating a void in the prescription market.

 

However, performance in April and May this year are even worse off than the prescription void period of the previous year.

 

The prescription market, in general, has been sluggish compared to the previous year.

 

Prescription sales in January and February this year were also down by 7.0% and 5.6% YoY, respectively.

 

Experts pointed to the prolonged COVID-19 as the cause of sluggish sales in January and February this year.

 

The increased interest in personal hygiene after the spread of COVID-19, including hand-washing and mask-wearing, may have greatly reduced the incidence of infectious diseases, leading to a decrease in visits to medical institutions.

 

Although the performance had improved temporarily in March, marking a 1.9% increase, sales has again turned downward from April.

 

Analysis predict that the increased personal hygiene management in the prolonged COVID-19 will inevitably continue to impact the prescription market for infectious diseases, etc., even though the flu season had ended.

 

Another reason that was raised was that the social distancing level that was elevated since the end of last year due to a surge in COVID-19 cases may have led to decreased visits to medical institution.

 

However, with eased social distancing restrictions to be applied from next month, many are expecting the prescription market to pick up.

 

According to the Ministry of Health and Welfare’s Central Disaster and Safety Countermeasures Headquarters (CDSCH), a new, 4-level social distancing plan will be applied from next month.

 

The key indicator used will be the weekly daily average confirmed cases per 100,000 people.

 

Level 1 applies when the rate is less than one in 100,000, Level 2 when the rate is between 1 and 1.9, Level 3 when the rate is between 2 and 3.9, and Level 4 for 4 or greater.

 

In the capital area, Level 1 will be applied if the weekly daily average is less than 250, Level 2 for 250 or more, Level 3 for 500 or more, and Level 4 for 1,000 or more.

 

Regarding private gatherings, no restriction will apply in Level 1, and up to 8 people may meet at Level 2.

 

Local governments may choose not to apply the 8-person restriction at their own discretion.

 

In other words, the restrictions on private gatherings for 5 or more people that was enforced since December 23rd of last year may be eased down from next year.

 

Also, the closing hours may be extended for multi-use facilities.

 

Industry officials expect the increase in outdoor activities will increase the number of visits to medical institutions, and benefit the prescription market.

 

Many believe that the sluggish sales in the prescription market will not continue long as drug use continues to increase with the increase in the elderly population and people with chronic conditions.

 

Contrary to the tourism and culture industry, which is facing an extreme crisis after the COVID-19 outbreak, the pharmaceutical industry is more influenced by the patients’ demand rather than the external environment.

 

Therefore, experts believe, the continued social distancing restrictions set in Korea will not lead to a sudden recession of the pharmaceutical market.

 

Also, hopes that that the prescription market will rebound due to increased COVID-19 vaccination area also present.

 

Recently, vaccination has sped up, and the cumulative total number of those vaccinated exceeded 15 million.

 

This means that over 15 million people visited medical institutions in about four months since March, when vaccinations first begun.

 

With more patients visiting medical institutions for COVID-19 vaccinations, some expect this will also lead to an increase in other drug use.

 

An industry official said, “There is a high possibility that the prescription market will recover as some people who have been hesitant to visit hospitals due to COVID-19 have been requesting additional prescriptions for their usual medications during their vaccination visits.”