Korea Pharmaceutical Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

Korea Pharmaceutical Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The Korea Pharmaceutical market is expected to register a CAGR of 2.5% over the forecast period, 2022-2027.

The COVID-19 pandemic has overall affected the entire healthcare sector. Similarly, the Korean pharmaceutical sector is impacted significantly in the initial phase due to restrictions in movement, supply chain disruption, travel bans, etc. which has impacted the market significantly. While on the contrary, on another side as the market restrictions started lifting in the mid of 2020s, the exports of pharmaceutical products from South Korea increased sharply during the coronavirus (COVID-19) pandemic. This growth corresponds to the increased production of both over-the-counter (OTC) and prescription drugs; the latter has consistently accounted for over 80 percent of the production value. Most pharmaceutical distributors are pharmacies, of which there are over 23.5 thousand across the country, representing around 83 percent of all distributors. As per the Korean Pharmaceutical Association, data published in 2021, The value of pharmaceuticals produced in Korea has grown throughout recent years, rising from around KRW 14.2 billion in 2010 to over KRW 21 billion in 2020. In international trade, pharmaceutical exports reached USD 8.4 billion in 2020 as the Korean pharmaceutical industry has been very active in providing various medical supplies related to the coronavirus (COVID-19) pandemic, such as testing kits, contributing to the significant jump in exports in 2020. Meanwhile, pharmaceutical imports have remained stable, reaching around USD 7.3 billion in 2020.

While the major manufacturers are responsible for the sharp increase in the revenue of the market during COVID-19. For instance, in March 2022, Celltrion and Dongbanf FTL, has obtained the license for its production. Celltrion and Dongbang FTL would develop and produce generic drugs and supply them to 95 low and medium-income countries as per the license contract. Celltrion is planning to complete the development and start commercialization of the drug following which the finished drug will be manufactured at its Cheongju Pharmaceutical plant. Additionally, Celltrion has recently signed a contract with the United Nations Medicine Patent Pool (MPP) for the generic production of Pfizer’s oral Covid-19 treatment. Thus, in this way the respective market has been impacted severely during COVID.

Moreover, an aging population and rising life expectancy have contributed to a strong demand for treatment which would be a major driver of potential trends in the pharmaceutical industry in the country over the forecast period. The pharmaceutical industry in Korea is evolving in reaction to the government's funding for R&D and anti-illegal rebate initiatives, with leading organizations the earliest to respond to the evolving climate. Further R&D spending is being spent on new medicines, and biosimilars, despite high growth rates in global markets. Celltrion and Samsung Bioepis are evolving as two of the world's leading biosimilar firms.

As per the latest research data from the Korea Health Industry Development Institute (KHIDI), a total of 46 research and development-based Korean drug manufacturers were recently identified as revolutionary pharmaceutical organizations by the Health Ministry of Korea, which will enhance R&D spending by 2020 from KRW 1,272,300 million to KRW 3,879,800 million. Korea has the potential to perform medicine R&D for molecules and industrial innovations, and agents, including organic synthesis, and multinational clinical trials. This potential has been achieved by the advancement of generic drugs. Korea is already a pioneer in the field of biotechnological pharmaceutical research. Therefore, all these variables would boost the pharmaceutical demand in the country during the forecast era. However, the stringent regulatory scenario is expected to restrain the growth of the studied market during the forecast period.

Key Market TrendsThe Prescription Drugs Segment is Expected to Hold a Significant Share Over the Forecast Period

Korea's Prescription Drugs segment is expected to hold the largest proportion of the pharmaceutical market over the forecast period in the country owing to the high burden of chronic disease that is mainly treated by prescription drugs. For instance, according to the Globocan 2020 report, about 287,973 new cases of cancer were recorded combinedly in North and South Korea and as per the same source, this number is projected to reach 432,770 by 2040 in both countries combinedly. Similarly, according to the 2021 report of the International Diabetes Federation (IDF), about 5.3 million people are living with diabetes in the Korean region in 2021 and by 2045, there would be about 6.2 million people with diabetes in the region. Thus, owing to the high burden of chronic diseases, the demand for prescription drugs is expected to be high in the country and the studied segment is expected to grow.

Further, with the growing demand for pharmaceuticals in the country, the companies operating in the country are engaged in various business expansion activities such as the launch of new drugs, filing for new approval applications, research and development agreement with other market players, distribution agreements and other, and these factors are expected to boost growth in the segment as they will increase the availability of prescription pharmaceuticals in the country. For instance, in December 2021, Pfizer received approval from the South Korean authorities for its antiviral prescription viral pills against COVID-19. Therefore, owing to the above-mentioned factors, the prescription drugs segment is expected to hold a major share in the studied market and have a healthy growth over the forecast period.

Competitive Landscape

The Korean pharmaceutical market is highly competitive and consists of several major players. In terms of market share, few of the major players are currently dominating the market. And some prominent players are vigorously making acquisitions and joint ventures with other companies to consolidate their market positions in the country. The Key companies currently dominating the market are AbbVie Inc., AstraZeneca plc, Bayer AG, SAMSUNG PHARM. Co., LTD., GlaxoSmithKline plc, F. Hoffmann-La Roche AG, Bristol Myers Squibb Company, Eli Lilly and Company, Merck & Co., Inc., and Sanofi S.A.

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