Updated on 28 May 2012
South Korea has a large number of domestic producers many of whom are part of much larger conglomerate companies. Number of domestic manufacturers has more than doubled in recent years. Overall, however, the local manufacturing sector is fragmented. One particular area of strength is the electromedical sector. The government had selected two provincial cities, Osong and Daegu, to develop these as sites for high-tech medical-industrial clusters which are expected to cost around $5 billion. The construction of these clusters is expected to complete in 2012.
The government has selected biotechnology as one of the areas that needs national support and intensive fostering. Along with R&D in the biotechnology area, the government is encouraging study and discussion of its ethical, legal, and social impact to establish a balance between technological advances and ethical issues.
The Ministry of Health and Welfare (MOHW), in August 2011, unveiled a set of plans to cut generic drug prices by up to one-third the current price, starting from 2012. These measures are expected to bring down the prices of some 8,776 registered drugs by around 17 percent on average, allowing consumers to save an estimated $559 million (KRW 600 billion) and the government to save $1.4 billion (KRW 1.5 trillion) in health insurance payouts.
The MOHW has also decided to scrap the system whereby drug prices are graded in the order they were registered with the National Health Insurance System, in a bid to accelerate development of generic drugs as soon as the patents of the original drugs expire. Instead, payments for the same drugs will be capped irrespective of manufacturer to induce competition among pharmaceutical companies to develop better quality drugs.