The pharmaceutical and bio industry presented industry support policies to presidential candidates. The industry proposed active nurturing plans for the pharmaceutical and bio sector and policies to revitalize investment markets, including the creation of a new drug research and development (R&D) ecosystem and investments in new drug development platforms utilizing big data and artificial intelligence (AI).
In the past, presidential candidates listened to the opinions of the industry and reflected them in their pledges, but this time they were unable to do so. The early presidential election left little time to coordinate pledges, and each candidate prioritized healthcare and welfare policy pledges, pushing the nurturing of the pharmaceutical and bio industry down the list. Therefore, the industry raised its voice directly.
◇ Corporations need expanded support for R&D budgets
The Korea Pharmaceutical and Bio Association, in its 28th policy report (KPBMA Brief) published on the 19th, proposed 10 key policies to strengthen the global competitiveness of the pharmaceutical and bio industry. The 10 key policies consist of three pillars: establishing an innovative growth ecosystem for new drug development, supporting digital transformation and AI-based new drug development, and establishing predictable drug pricing policies.
The association suggested that the government increase the corporate support ratio of the R&D budget to over 30% and strengthen support for clinical Phases 2 and 3 and global expansion to enhance the success rate of new drug development and commercialization. This means that the national R&D budget, which is currently focused on the early stages of research and development, must also support later stages to achieve business results.
Lee Kwan-soo, CEO of GID Partners and former vice chairman of Hanmi Pharmaceutical, said, "Global new drug development is a matter of survival, not choice," and noted, "To enhance competitiveness in new drug development, the public and private sectors must execute strategies together and build an institutional framework." He pointed out that while the government's biohealth investment scale reaches 1.7 trillion won annually, the proportion allocated to new drug development is less than 20%.
The pharmaceutical bio association also proposed expanding the 'Korean ARPA-H (Advanced Research Projects Agency-Health)' initiative. The Biden administration in the United States launched ARPA-H to solve healthcare challenges by mimicking the Department of Defense's DARPA. Although the K-health future promotion team is leading the Korean ARPA-H project, its budget has been cut just one year after its launch.
There were also suggestions for investments in infrastructure and human resource development for new drug development utilizing AI and big data. According to the association, domestic AI new drug development technology is at 74% of the level in the U.S., indicating a technology gap of about five years. The association argued that the national government should expand cooperative learning and establish a 'cooperative AI new drug development acceleration project (AIDA).'
◇ Bio ventures face crisis of extinction due to investment market drought
The Korea Bio Association, focused on bio corporations, stated that 'activating the investment market' should be an important task for the next government.
The pharmaceutical bio association called for the continuous expansion of mega funds to create blockbuster new drugs and urged expanded tax credits for corporate investments in bio ventures. The association suggested establishing startup investment funds and revising regulations on ordinary losses before corporate tax reduction.
Lee Seung-kyu, vice chairman of the Korea Bio Association, said, "The biohealth venture ecosystem is collapsing," adding that various small funds ranging from 20 billion to 30 billion won should be created to facilitate investment in venture startups, and that regulations on corporate losses should be eased for bio corporations.
Currently, financial authorities designate listed companies that incur ordinary losses exceeding 50% of their equity capital for more than two instances in three years as management items. Controversies arose when bio companies engaged in new drug R&D were forced to sell stocks and real estate or even acquire bakery businesses due to the ordinary loss requirements.