The government proposed creating a dedicated organization to nurture the pharmaceutical and biotech industry and forming a 150 billion won fund. The industry, however, pushed back, saying the government should first revisit its planned overhaul of the drug pricing system.
Vice Minister Lee Hyoung-hoon of the Ministry of Health and Welfare said on Jan. 7 at the auditorium of the Korea Pharmaceutical and Bio-Pharma Manufacturers Association (KPBMA) during the "2026 New Year's gathering of the pharmaceutical community" that "starting this year, we will establish a dedicated organization for the pharmaceutical and biotech industry to support the industry more proactively," adding, "we will further expand the K-bio vaccine fund and newly create a phase 3 clinical composite fund worth 150 billion won."
The Vice Minister also said, "By leveraging the Public Growth Fund, we will pursue a mega project so that domestic drug pipelines can lead to finished goods development and entry into global markets."
But the industry's attention centered more on the government's planned overhaul of the drug pricing system than on support measures. In Nov. last year, the government released a reform plan to lower the pricing benchmark for generics from the current 53.55% of the original drug price to the 40% range.
The industry believes that cuts to generic prices could directly lead to worsening profitability. The Emergency Response Committee for Drug Pricing System Reform for the Development of the Pharmaceutical and Bio Industry has argued that lowering generic prices could cause about 3.6 trillion won in annual revenue losses, raising the possibility of reduced research and development (R&D) investment and job cuts.
Noh Yeon-hong, president of the Korea Pharmaceutical and Bio-Pharma Manufacturers Association (KPBMA), also said that "the recently released drug pricing reform plan by the government signals a significant shock across the industry." He said, "Concerns are spreading that not only will the capacity for research and development investment shrink and employment decline, but health security could be shaken by unstable supplies of essential medicines with low profitability."
Questions about the direction and pace of the drug pricing overhaul came from both ruling and opposition parties. Lawmaker Choi Su-jin of the People Power Party said, "Generics help reduce the public's burden, but further lowering their price levels on the grounds that usage has increased is no different from asking companies to stop production." Choi added, "Rather than prioritizing fiscal logic alone, we must consider both the public's burden and the industry's sustainability."
Lawmaker Kim Yoon of the Democratic Party of Korea also said, "Given the significant concerns in the field, sufficient discussion is needed on the detailed elements of the system and the speed of implementation." Kim added, however, "Please view the drug pricing reform not merely as a cost-saving measure for the health insurance budget, but as a policy to build an innovative ecosystem for the pharmaceutical industry."