South Korea Pharmaceuticals & Healthcare Q4 2006

Published by: Business Monitor International

Published: Oct. 1, 2006 - 77 Pages

Table of Contents

Chapter 1 - Executive Summary

Table: South Korea Pharmaceuticals Industry SWOT

South Korea Political SWOT

South Korea Economic SWOT

South Korea Business Environment SWOT

Chapter 2 - South Korea: Business Environment Ranking

Table: Asia Business Environment Rankings

Business Environment Ranking

Economics - Long-Term Risk

Politics - Long-Term Risk

Regulatory Barriers

Domestic Sector Threat

Market Growth Potential

Market Size Ranking

Chapter 3 - South Korea: Market Summary

Table: Top 10 Products (Q405)

Table: Top 10 New Products, Under 2 Years Old (Q405)

Chapter 4 - Regulatory Regime

Intellectual Property Developments

Market Access Barriers

Pricing & Reimbursement Issues

Recent Developments

Foreign Trade Developments

Chapter 5 - Industry Trends & Developments

Epidemiological Trends

Table: HIV/AIDS in South Korea

Healthcare Expenditure

Multinational Sector Developments

Chapter 6 - Industry Forecast Scenario

Overall Market Forecast

Table: South Korea Drug-Market Expenditure Forecasts

Key Growth Factors - Industry

Table: Health Expenditure Indicators

Key Growth Factors - Macroeconomic

Table: GDP, Output & Population

Prescription Market Forecast

Table: South Korean Prescription Market Forecasts 2005-2009

OTC Market Forecast

Table: OTC market indicators

Generics & Branded Market Forecasts

Table: Generics and Branded Market Indicators

Export/Import Forecasts

Table: Sectoral trade indicators

Other Healthcare Data Forecasts

Table: South Korea Healthcare Data Forecasts 2005-2009

Key Risks to BMI’s Forecast Scenario

Chapter 7 - Competitive Landscape

Overview

Table: Top 10 Corporatons (Q405)

Table: Leading Foreign Multinationals In South Korea

Chapter 8 - Company Profiles: Leading Multinationals

GlaxoSmithKline

Pfizer

Sanofi-Aventis

Merck & Co

Novartis

Chapter 9 - Profiles: Leading Domestic Manufacturers

Dong-A

DaeWoong Pharmaceutical

ChoongWae

Hanmi Pharmaceutical Co

Yuhan Corporation

Yungjin Pharmaceuticals

Kuhnil Pharmaceutical

Chapter 10 - BMI Forecast Modelling

How We Generate Our Industry Forecasts

Technical Process

Pharmaceutical Industry

Sources

Chapter 11 - Appendix: Regional Demographic Data

Table- Manufacturing Wages (ave. per annum), US$

Table- Population

Household Spending Per Capita, US$

Private Consumption Per Capita, US$ PPP

Market Size, GDP, US$bn

Country Snapshot: South Korea Demographic Data

Section 1: Population:

Table: Demographic Indicators (2005)

Table: Rural/Urban Breakdown

Section 2: Education & Healthcare

Table: Education

Table: Healthcare: Vital Statistics

Table: Healthcare: Expenditure

Abstract

South Korea boasts a well-developed pharmaceuticals market. In particular, the over-the-counter segment holds a considerable growth potential, and is likely to expand to over 22% of the total by 2010, up from 17% in 2005. The key driver of the OTC segment growth is the more effective separation of prescribing and dispensing. Meanwhile, branded drugs will remain the leading value generators, although losing market share to generics, which will be boosted by cost-containment efforts. In the meantime, imports - especially of advanced drugs for the treatment of cardiovascular, neurological and metabolic diseases and cancer - will increase, stimulated by the demand for novel treatments for lifestyle-related disorders.

BMI predicts a growth of the South Korean pharmaceutical sector of around 11% in 2006. The market is ranked third in our regional ranking of 14 Asian countries, behind only Australia and Japan. Sales value is likely to approach US$20bn by 2010, boosted by demographic changes and rising healthcare spending. The strong domestic generic industry and the biased regulatory environment will continue to stimulate the development of the low-cost copy drugs, as will the 20% cut in the prices of foreign-made drugs going off-patent. The Ministry of Health is also considering reducing the number of drugs available for reimbursement and only paying for drugs deemed sufficiently cost-effective.

In regional terms, South Korea will outperform a number of its immediate neighbours. The authorities' commitment to the development of a local pharmaceutical R&D base will attract some foreign investment. However, strong regional competition in the pharmaceutical and biotechnology sectors will impact the industry. Additionally, the latest downscaling of local operations by leading foreign players does not bode well for the future of the sector.

Free Trade Agreement (FTA) negotiations between South Korea and the US are under way, potentially providing for a tighter regulatory network and encouraging local investment by multinationals. However, the talks stalled over the pharmaceutical pricing issues - notably including the introduction of a positive list - in August 2006, leading BMI to expect that the government will maintain tough controls over drug prices. While the government is continuing efforts to eliminate counterfeits, the Korean Food and Drug Administration (KFDA) remains criticised for inadequate control of products covered by existing patents, inappropriate reimbursement restrictions disproportionately affecting foreign drugs, ineffective implementation of new pricing mechanisms, and the excessively strict clinical trial data and drug master file requirements. In the meantime, leading local players will continue to invest in indigenous R&D alongside increasing their traditional strengths in generic product development.

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