[Reporter’s View] K-Pharma bets its survival on new drug R&

The R&D direction of major Korean pharmaceutical companies is shifting from generics to new drug development.

 

This shift comes as the perception grows that generics, long the mainstay of domestic pharma growth, are no longer a safe bet.

 

With tighter price regulations, intensified competition, and shrinking distribution margins, the generic ecosystem is being pushed into relentless price pressure.

 

As the sense of crisis deepens that generics alone cannot guarantee the future, leading pharmaceutical companies are increasingly willing to bear the cost burden to secure mid-to-long-term growth engines.

 

Hanmi Pharmaceutical is aggressively investing in R&D, raising expectations that it may be the first Korean company to launch a homegrown obesity drug.

 

Hanmi's R&D expenditure for the third quarter of this year reached KRW 169.1 billion, a KRW 15.5 billion increase year-on-year, accounting for 15% of its sales.

 

CKD (Chong Kun Dang) is moving away from a generic-centric model toward a bio-focused structure, expanding its pipeline from ADC (antibody-drug conjugate) oncology drugs to advanced biopharmaceuticals.

 

It recently announced a KRW 2.2 trillion investment, making a major ‘bet’ by constructing a large-scale biopharmaceutical complex R&D center in Siheung.

 

Its R&D expenses are on the rise - from KRW 151.2 billion in 2023, KRW 157.4 billion in 2024, to KRW 126.5 billion in the third quarter of this year.

 

JW Pharmaceutical is also steadily increasing its annual R&D spending.

 

Its third-quarter R&D expenses this year reached KRW 74.9 billion, a 26.9% increase compared to KRW 59.0 billion in the same period last year.

 

It is currently conducting a Phase III multinational clinical trial in Asia for its core pipeline, the gout treatment ‘epaminurad (URC102)’.

 

Considering the growth potential of the gout treatment market and the limitations of existing uric acid-lowering drugs, analysts view it as having significant mid-to-long-term pipeline value.

 

Even manufacturing-oriented giants like Celltrion and Samsung Biologics are jumping into the R&D competition, expanding their own pipelines as new growth pillars.

 

Celltrion emphasized ambitions beyond biosimilars, outlining plans to develop ADCs, multi-specific antibodies, and obesity drugs.

 

Samsung Biologics launched Samsung Epis Holdings, a bio-investment holding company, through a spin-off.

 

Samsung Epis Holdings plans to strengthen new drug development based on EPIS NexLab’s biopharmaceutical development platform.

 

 Behind these bold future investments by domestic companies lies a shared understanding that sustainable growth is difficult to achieve, relying solely on generic drug profits.

 

The global M&A market, policy direction, and investment capital all operate based on ‘innovation’.

 

This means that companies unable to break free from a domestic-focused, generic-centric structure will inevitably fall behind.

 

Of course, strengthening R&D does not guarantee immediate success.

 

The risk of clinical failure is significant for any company, and securing funding grows increasingly difficult.

 

Risks clearly exist behind the banner of ‘investment for the future’.

 

However, it is becoming increasingly clear that competitiveness in the pharmaceutical industry is shifting from price to technology.

 

These days, the phrase “We will increase our R&D investment” appears like a motto in all pharmaceutical companies' new year business plans.

 

To the reporter, it reads as a strategic declaration directly tied to survival.

 

The reality that generic drugs alone cannot defend corporate value is pushing companies harder for reinvestment in R&D.

 

As the market landscape shifts, clinging solely to safe strategies leads only to regression.

 

The direction is becoming clearer: decisively shedding inefficient businesses and concentrating resources on next-generation drug development.

 

This is why domestic pharmaceutical companies have chosen the difficult path of restructuring toward high-value-added focus, and why their ‘long-term’ challenge deserves close attention.