subject: Vision Shopsters: The South Korean Pharmaceutical Market Outlook To 2014 [print this page] South Korea has moved from being a developing pharmaceutical market to a fully fledged developed market in the past ten years. The Ministry of Health and Welfare is the nodal agency for protecting public health in South Korea. The countrys public health status has improved with respect to infant mortality and life expectancy. This has been fueled by rising income levels and resultant improved living conditions and an improved healthcare system.
Healthcare in South Korea is provided principally by the private sector: 93% of medical institutions are privately held and 90% of specialist doctors work for the private sector. In terms of healthcare expenditure, public healthcare spending has grown at an annual rate of 10.1% on a per capita basis since 1981, which is far above the OECD average of 3.6%.
The South Korean drug approval system is a long-winded process and innovator drug companies are required to obtain several certificates and licenses and have to appear for numerous face-to-face meetings with regulatory officials, during and post the approval process. Foreign manufacturers also find the shipment of imported drugs for testing to be a time-consuming and expensive process.
National Health Insurance (NHI) or the Medical Aid Program (governed by the Ministry of Health and Welfare) are the key bodies which provide healthcare benefits to all citizens of South Korea. The NHI is again financed through contributions from employers and the insured, besides government subsidies. The contribution from an insured employee is determined by the standard monthly wage (half of the contribution or 50% is paid by the employee and the other half by the employer).
Key features of this report
Macroeconomic environment in South Korea includes economic snapshot, population profile and demographic trends, disease burden and epidemiology
South Korean healthcare system and regulation involving key trends & events, detailed overview of the healthcare system, healthcare financing, recent healthcare reforms, drugs approval process, intellectual property laws and medical tourism
Overview of the South Korean pharmaceutical market covering comparative dynamics of emerging & major pharmaceutical market, key recent events and trends, therapeutic category analysis, leading product dynamics, generic drug market and the overall market forecast through 2014
Forecasts and analysis of the leading products in the South Korean pharmaceutical market over the period 200814 spread across major therapeutic indications and classes of treatments
Scope of this report
Develop insights for the South Korean pharmaceutical market, pricing & regulation, healthcare system and detailed epidemiological status of the common indications/risk factors in the country
Quickly understand how recent events are affecting the performance of major products, and how the marketers are confronting competitive challenges and a range of strategic responses that are taking shape n the South Korean market
Gain up-to-date competitive intelligence across a wide-range of marketed products, R&D pipeline, market share data, sales forecast and competitive landscape for the major players in the South Korean pharmaceutical market
Understand which indications have the greatest potential to provide franchise growth, and how pharmaceutical companies are attempting to capitalize these opportunities in South Korea
Key Market Issues
Biotech drugs focused in the economic plan: As per a plan finalized by the South Korean government in early 2009 to facilitate mid-term economic growth, R&D is to be supported in 17 key industries that include biologics. According to this plan, which has been agreed upon by a presidential policy council and the national science and technology council, a total of $4.66bn would be invested over the next 4 years on different fields including general healthcare. The over all aim of this plan is to drive economic growth.
OTC medicines set to grow: OTC medicines have been a growing segment in South Korea due to the regional trend of self-prescription. Besides, product branding is also an important factor with studies showing that 35% of the consumers stick to the brand of medicine that they always buy. Over the medium term, factors that are likely to sustain growth in the sector include retail sector liberalization which is likely to expose people to products for self-medication more frequently. Switch from prescription to OTC is likely to trigger the introduction of newer pharmaceuticals in product portfolios.
Glivec battling pricing issues in South Korea: Novartis has been battling legal action over the pricing of Glivec in South Korea. In January 2010, Seoul Administrative Court dismissed a petition over Glivec price reduction that was filed by a civic group. The court ruled that imposing such a reduction would disrupt the regular regulatory procedures of drug pricing, followed by the government review process. South Korea patients already had access to Glivec through the government driven insurance schemes. Besides, Novartis has been providing for co-payments that allow patients to receive the drug for free without any out-of-pocket expense.
Key findings from this report
South Korean pharmaceutical market was valued at around $9bn in 2008, recording a Y-o-Y decline of 4.5%. However, during 200408 period, the country recorded strong growth with a CAGR of around 14%. IMS Health recently classified South Korean pharmaceutical market as developed but the countrys pharmaceutical market growth has been trailing many of the emerging markets such as China, Russia and Brazil.
South Korean pharmaceutical market is yet to reach a level of growth like that of the high growth emerging markets, a scenario that may change considering the ongoing reform of pricing system for prescription pharmaceuticals.
Alimentary tract and metabolism remained the leading therapeutic area in South Korea with a market share of 20%. However, most of the market leading therapy areas in the country recorded a decline over the 200708 period primarily due to prevailing unfavorable economic conditions and currency fluctuations.
Top 10 drugs of the South Korean pharmaceutical market contributed only 6.4% of the total sales in 2008, with 'others' accounting for a substantial share of 93.6%. BMS/Sanofi-aventis Plavix and Pfizers Lipitor remained the best -selling drugs in 2008.
The competitive landscape of the South Korean pharmaceutical market has a fair representation from both domestic and multinational players. The top ten players together captured 35.2% of the total pharmaceutical market in 2008. Domestic pharmaceutical companies accounted for 18% in market share, comparable to 17.2% by the leading five multinational players.
Key questions answered
What will be the major growth indications and the accompanying growth drivers in the South Korean pharmaceutical industry over the next 5 years?
Which were the leading players in the South Korean pharmaceutical market (both multinational and domestic) in 2008?
How have recent launches from companies such as Dong-A, Sanofi-aventis, Daewoong Pharm, Hanmi and Pfizer performed in the market place?
Which products will be the future growth drivers for the South Korean pharmaceutical market?
Which therapeutic categories and indicationsare forecast to offer significant commercial opportunity over the period 200814?
How is the competitive landscape of key therapeutic areas evolving in South Korea?
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