A close look at recent personnel moves at drugmakers shows the rise of executives with "sales backgrounds." As the government pushes to cut prices of generics, companies appear to be strengthening sales to maintain profitability. With generics offering similar efficacy and prices, sales ultimately determine revenue.
Myung In Pharm plans to put on the agenda at next month's shareholders meeting the appointment of Cha Bong-kwon, head of sales, as an internal director.
Cha joined Myung In Pharm in 1990 as part of the first open recruitment class for the sales division and has spent more than 30 years at the company. After serving as head of overall sales, Cha was appointed an internal director in 2022, completed a two-year term, and stepped down. Cha became president overseeing sales in Jul. 2024 and is returning as a registered director after two years.
Cha is credited with building a revenue structure centered on prescription drugs at Myung In Pharm. As of the third quarter of last year, Myung In Pharm posted an operating margin of more than 30%.
In fact, Myung In Pharm's founder also started as a sales representative. Myung In Pharm was established in 1985 by Chairman Lee Haeng-myung, who had been a sales representative at Chong Kun Dang pharmaceutical. It is known for Iga-Tan, a gum treatment; Maykin Q, a constipation remedy; and central nervous system (CNS) therapies for conditions such as depression and schizophrenia. Myung In Pharm listed on the KOSPI in Oct. last year and pledged a professional management system. Cha and former Hanmi Pharmaceutical Vice Chairman Lee Kwan-soon are expected to become internal directors after next month's shareholders meeting.
Among its prescription drugs, Myung In Pharm has a high share of generics. The company faces the task of maintaining profitability in response to government price cuts.
A Myung In Pharm official said the company will "reduce the risk from price cuts by producing active pharmaceutical ingredients in-house, expanding the high value-added pellet dosage form business, and developing new drugs."
Pellets are a kind of small granule that contains active ingredients. They can control the speed and location at which a drug is released in the body. With virtually no domestic competitors and few overseas rivals, the company believes pellets can generate stable revenue.
Boryung Consumer Healthcare also recently appointed Chung Woong-je, Boryung's head of sales, as CEO. Chung joined Boryung in 2017 after serving as a senior manager at Hanmi Pharmaceutical and worked as head of the clinic sales division, among other roles. At Boryung, Chung is credited with quickly responding to market changes and improving results for prescription drugs.
Chung plans to lead growth in over-the-counter drugs and health functional foods at Boryung Consumer Healthcare. Chung is known for identifying the capabilities of sales staff and deploying them efficiently. Serving as a bridge between the sales field and management, Chung is expected to build a performance-centered organizational culture. A Boryung official said the company "plans to strengthen sales competitiveness amid a stagnant over-the-counter (OTC) and health functional food market."
Yuyu Pharma, with an 85-year history, also recently hired Executive Director Jang Hong-seok as Deputy Minister overseeing sales. Jang has handled sales of prescription drugs for more than 25 years at Daewoong Pharmaceutical and Hanwha Pharmaceutical. Yuyu Pharma also strengthened sales in personnel moves at its affiliates. A Yuyu Pharma official said, "Having a sales expert take the lead will help the company's sales and operating profit."
Yuyu Pharma was founded in 1941 by the late Chairman Yoo Teuk-han, the younger brother of the late Dr. Yoo Il-han, who founded Yuhan. In its early days, the company imported medicines and raw materials and introduced vitamins right after the Korean War. It now supplies treatments for headaches, hyperlipidemia, and osteoporosis. With 60% to 70% of total sales coming from generics, the company says it aims to break through by strengthening sales.
Separately, HK inno.N CEO Gwak Dal-won is also a veteran of sales. Gwak's term runs through Mar. next year. Gwak joined the Samsung Group through open recruitment in 1986 and served as head of sales for the pharmaceutical business at CJ CheilJedang in 2010. Gwak then became CEO of CJ Healthcare, which was launched after the pharmaceutical business at CJ CheilJedang was spun off.
Gwak helped guide the transformation of CJ Healthcare into HK inno.N, ushering in an era of 1 trillion won in sales. Gwak is known for regularly visiting sales offices around the country and touring plants to hear voices from the field. HK inno.N currently operates a separate global sales organization and is pushing prescription drugs such as infusion solutions and antihypertensives into overseas markets.
Yuhan CEO and President Cho Uk-je also has a sales background. Cho joined Yuhan in 1987 and rose to CEO in 2021 after serving as hospital branch director and director, senior managing director for prescription drug sales and marketing, and executive managing director as Deputy Minister of the drug business division. Cho is credited with driving the success of Leclaza, a new lung cancer drug, as the first domestically developed anticancer therapy to enter the U.S. market. Yuhan's consolidation sales rose 30%, from 1.6878 trillion won in 2021, when Cho took office, to 2.1866 trillion won last year.
Sales representatives are key personnel for a drugmaker's performance. Unlike other industries, in the pharmaceutical sector the customers—doctors and pharmacists—know products in detail. Salespeople who have built long-standing relationships of trust with such highly knowledgeable customers are, from the company's perspective, a major asset.
An industry official said, "In the 2010s, measures such as the dual punishment system that penalized both drugmakers and doctors for giving and receiving rebates briefly put a brake on those with sales backgrounds, while those from research and development drew attention," adding, "Recently, not only research but also fierce competition and price-cut policies have combined to put sales experts who know the field well back in the spotlight."
The industry is watching to see whether these figures can break through a complex sales environment and demonstrate their strength.