High import drug dependency, Korean drug ratio keeps falling

Domestically manufactured API volume halved in two years, import from China and India surges

Korean-made complete drugs mark a record low market share of 74.1%

The dependency on imported pharmaceutical products in the South Korean market seems to be getting higher.

 

The volume of the country’s locally manufactured complete product and active pharmaceutical ingredient (API) has fallen for two consecutive years.

 

The self-sufficiency in API has even halved in just two years.

 

According to the ‘Food and Drug Statistics 2020’ published by the Ministry of Food and Drug Safety (MFDS) on Dec.

 

25, the production of Korean-made complete drug has increased by 7.0 percent this year, compared to last year, reaching 19.84 trillion won.

 

The complete product import generated 4.77 trillion won, surging 20.0 percent this year compared to 2018, when the import volume was also increased by 13.0 percent hitting 5.25 trillion won.

 

The ratio of complete drug manufacturing self-sufficiency in 2018 was 74.1 percent, which was 1.5 percent lower than the previous year.

 

The self-sufficiency ratio indicates the proportion of the Korean-made products in the overall market.

 

The self-sufficiency ratio in complete product in 2017 reached 77.6 percent, and the figure has been dipping for last two consecutive years and marked the lowest since 2008, when the statistics disclosed for the first time.

 

The ratio in 2008 marked 83.4 percent.

 

The figure fell below 80 percent in 2012 and then it has been slipping down ever since.

 

The industry analyzes the drop in Korean-made complete drug’s local market share would have been affected by the heightened preference on imported drug and disinterest in generics.

 

As an off-patent new drug pricing is brought down to level with generics, the prescribers appear to prefer the originals more than the generics.

 

In South Korea, the original’s reimbursed pricing is reduced to 70 percent of the initial pricing when a generic is released to the market.

 

And the pricing falls again to 53.55 percent of the initial pricing a year after the pricing adjustment.

 

As for generic, the initial upper limit pricing is set at maximum 59 percent of the original pricing before the patent expiration, and it would be reduced down to 53.55 percent the initial pricing after a year like the original.

 

The yearly ratio of Korean-made complete drug in the local market (Unit: percent) Source: MFDS

Meanwhile, the dependency on the imported API is rising steeply.

 

South Korea has manufactured 2.47 trillion won worth of API in last year, which was 3.6 percent less than the year before.

 

But API export volume was increased 13.4 percent more than 2018 with 1.98 trillion won, while the import volume was increased 11.6 percent more with 2.53 trillion won.

 

The self-sufficiency ratio in API marked 16.2 percent making over 10 percent point drop.

 

After reaching 35.5 percent in 2017, the figure took a significant fall for two consecutive years.

 

Last year’s API self-sufficiency ratio did not even make it to the halfway point of 35.4 percent recorded in 2017.

 

The pharmaceutical companies evaluate the import volume surged as the Korean manufacturers sought after inexpensive imported API to lessen the production cost.

 

In last year alone, USD 796.96 million worth of Chinese-made API were imported, which was 17.5 percent more than the year before with 678.09 million dollars.

 

Compared to 653.66 million dollars of import in 2017, the volume in last year leaped by 31.6 percent in two years.

 

Meanwhile, the Indian-made API import volume also jumped from 171.89 million dollars in 2017 to 221.14 million dollars last year.