Korea's pharmaceutical and biotech industry was assessed as Asia's "second innovation engine" after China. However, the recent slowdown in clinical trials and new drug approvals was cited as a challenge that needs to be addressed.
On the 3rd, ING Research, the economic and financial market analysis arm of global universal bank ING Group, offered this analysis in its report, "South Korea: Asia's second innovation engine."
According to the report, Korea's pharmaceutical industry is rapidly shifting from a structure centered on producing generics and biosimilars to a biopharmaceutical innovation nation. It said the industry has strengthened its competitiveness on the back of government-led bio cluster development, expanded public and private research and development (R&D) investment, and the growth of global corporations such as Celltrion, Samsung Epis Holdings' subsidiary Samsung Bioepis, and Samsung Biologics.
In fact, investment in Korea's biopharma industry rose an average of 21.6% annually from 2020 to 2022, reaching about $2.9 billion (4.4225 trillion won). Building on this, Korea has produced results in neuroscience, metabolism, and immunology, and more recently has been expanding its presence in RNA platforms and cell and gene therapy (CGT). Oncology remains a core research field driving domestic bio innovation.
ING Research currently rates Korea as "one of the most reliable biopharma innovation nations in Asia." Korea's biopharma market is about $22 billion, ranking 13th in the world. Seoul ranked first globally in 2022 in the corporations-led clinical trials institutional sector and, by country, Korea has established itself as a top-five clinical trial hub.
The achievements of domestic corporations in new drug development are also drawing attention. Korean corporations have identified more than 1,300 new drug candidates over the past three years, accounting for about 10% of the global total. The report said this outpaces traditional R&D powerhouses such as the United Kingdom, Switzerland, and Japan.
Exports are also continuing to grow. Korea's pharmaceutical exports totaled $10.4 billion (about 15.86 trillion won) last year, up 11.8% from a year earlier. Biopharmaceutical exports accounted for 62.6% of the total, growing 18.2%. Expanded demand for biosimilars and an increase in contract development and manufacturing (CDMO) orders were cited as the main drivers.
However, ING Research noted that improving the clinical trial and regulatory environment is necessary for the growth of Korea's biopharma industry to continue.
In fact, the number of ongoing domestic clinical trials decreased from 2,307 in 2024 to 2,175 last year. The number of new drug approvals also fell 38% year over year to 23 in 2024. The report cited lengthy approval procedures, a stringent patent term extension regime, and a complex national health insurance reimbursement system as obstacles to clinical development.
ING Research said, "Korea has cemented its status as Asia's 'second innovation engine' after China, showing strengths in biopharmaceutical manufacturing capacity, clinical trials, biosimilars, antibody-drug conjugates (ADC), CGT, and platform technologies," but added, "Whether reforms to the drug pricing system, expedited approval procedures, clear patent protection, and improvements to insurance reimbursement are achieved will determine whether Korea can leap forward as a global innovative new drug developer."