Massive COVID-19 Vaccine Procurement... SK, LG, Samsung Depend on the Three Major Groups

An SK Bioscience researcher is conducting research for vaccine production.

[Asia Economy Reporter Park So-yeon] As domestic conglomerates have decided to undertake contract manufacturing of COVID-19 vaccines from global pharmaceutical companies, attention is focusing on the volume of domestically available supply. Typically, vaccine contract manufacturers enter into tripartite agreements with the contracting company and the government to prioritize supplying a certain quantity of vaccines to the producing country. Recently, SK Bioscience signed contract manufacturing agreements with two global pharmaceutical companies, and LG Chem is actively pursuing orders for finished vaccine products, leading to analyses that the role of domestic conglomerates will grow significantly during the large-scale vaccination process after vaccine completion.

◇ The more domestic companies secure orders, the more vaccines for their own citizens = According to industry sources on the 21st, subsidiaries of large companies such as SK Bioscience and LG Chem are accelerating their efforts to secure contract manufacturing orders for vaccines from global pharmaceutical companies. Last month, SK Bioscience signed a contract manufacturing agreement for COVID-19 vaccines with the multinational pharmaceutical company AstraZeneca, and earlier this month, secured a production contract for COVID-19 vaccines from the U.S. pharmaceutical company Novavax. The company is reportedly in contact with several global pharmaceutical companies for additional orders. A representative from SK Bioscience stated, "We can produce up to 500 million doses of vaccines, and a certain portion of this will be supplied domestically on a priority basis through tripartite agreements with the government," adding, "The exact volume of domestic supply has not yet been determined." LG Chem is also actively pursuing orders for the business of filling vaccine bulk substance into vials and producing finished products. The LG Group plans to conduct its vaccine business both as a profitable venture and as part of its social contribution efforts. The goal is to supply vaccines in large quantities worldwide. Recently, LG Group Chairman Koo Kwang-mo personally donated 1 billion KRW to the International Vaccine Institute, which is interpreted as part of efforts to accelerate vaccine development. In particular, LG Chem has secured multi-dose production technology (capacity for multiple uses per vial), which is advantageous for rapid vaccine supply worldwide, including in underdeveloped countries. LG Chem, capable of producing up to 300 million doses, plans to utilize approximately 200 million doses worth of production facilities for finished COVID-19 vaccine production.

◇ With LG and SK entering vaccine production, will Samsung also join? = Samsung Biologics, the bio subsidiary of Samsung Group, currently focuses on producing biosimilars such as cancer treatments, but it is known that with additional facilities, it is technically capable of contract manufacturing vaccines. If a shortage of vaccine supply occurs domestically, there is a prospect that Samsung could also enter mass production through vaccine process development. The more actively domestic conglomerates participate in contract manufacturing orders, the more advantageous it is for Korean citizens. The government is also paying attention to domestic conglomerates securing vaccine contract manufacturing orders. Domestic companies act as subcontractors responsible for production on behalf of global pharmaceutical companies and are in a subordinate position in these relationships, so they do not have the authority to determine domestic supply volumes independently. However, it is analyzed that they can contribute to expanding domestic supply volumes through price negotiations and other means. In reality, vaccine supply contracts are made between global pharmaceutical companies and the government. Jung Eun-young, Director of the Health Technology Development Division at the Ministry of Health and Welfare, said, "The domestic supply volume has not yet been decided, but negotiations are ongoing." Experts predict that vaccine development will be completed as early as the end of this year or at the latest early next year. Governments worldwide are eager to secure vaccine quantities available for vaccination through 'advance purchase' methods even before vaccines are fully developed. An industry insider said, "Once vaccines become practical, rapid securing of supply volumes will become important," adding, "Social consensus on vaccination order and other issues will also be necessary."

This content was produced with the assistance of AI translation services.