Singapore, January 16, 2009: South Korea’s US$14.75 billion pharmaceutical market is one of the most promising in the world. High growth coupled with preference for branded goods makes it very attractive to multinational drug makers and consumer healthcare companies. Through to 2012, Business Monitor International (BMI) is projecting a compound annual growth rate (CAGR) of 8.56% in US$ terms.

 

According to BMI’s South Korea Pharmaceuticals and Healthcare Report, the country’s drug makers were severely impacted in Q3 2008, by high oil and raw material prices, which doubled manufacturing and distribution costs in some instances. Companies specialising in liquid drugs were the most affected because distribution of these products typically costs more than solid preparations.

 

The local South Korean pharmaceutical industry is relatively well developed, despite being mostly focused on generic products. South Korea has around 250 manufacturers, with leading companies including Dong-A Pharmaceutical, Daewoong, Yuhan, ChaeWoong and Hanmi. In recent years, local producers have turned their attention to R&D of novel drugs, in a bid to boost their position both at home and regionally.

 

Continuing the global trend, the use of healthcare economics in reimbursement decisions is becoming more frequent in South Korea. In June 2008, it was revealed that the Health Insurance Review and Assessment Service (HIRA) was collaborating with the UK’s National Institute for Clinical Excellence (NICE), which is arguably the most pragmatic medicine cost effective watchdog in the world.

 

BMI expects South Korea’s US$2.6 billion over-the-counter (OTC) market to expand significantly over the next five years. Key drivers include sector liberalisation, an ageing population, the removal of certain prescription drugs from the reimbursement list, more sophisticated marketing campaigns and increased self-medication. By 2012, BMI expects that annual sales of non-prescription drugs will reach US$2.8 billion, which equates to per capita spending of US$56.

 

Every year, approximately 110,000 people in South Korea are diagnosed with cancer and 64,000 will die of it. The disease became the leading cause of death in 1983 and there are no signs that this will change in the medium term. Stomach, lung, liver and colorectal cancers are the most common malignant neoplasms in South Korean men, while stomach, breast, colorectal and cervical account for the most cases in females.