[Asia Exclusive] "US Drug Stockpiling Is Not Someone Else's Problem, We Must Increase Self-Sufficiency of Domestic Active Pharmaceutical Ingredients"

Won Hee-mok, President of Korea Pharmaceutical and Bio-Pharma Manufacturers Association
'Silent War' to Secure COVID-19 Vaccines
Expansion of Over-the-Counter Drug Hoarding Phenomenon
Need to Establish National Crisis Preparedness System

Priority on Independent Vaccine and Therapeutic Development
Support Measures Such as Loss Compensation System Must Be Prepared

Domestic Active Pharmaceutical Ingredient Self-Sufficiency Only 16%
Urgently Select Ingredients to Raise It to 50%

Won Hee-mok, President of the Korea Pharmaceutical and Bio-Pharma Manufacturers Association. Photo by Hyunmin Kim kimhyun81@

[Interview = Cho Young-joo, Head of the 4th Industrial Department; Summary = Reporter Seo So-jeong] Countries around the world are engaged in a "war without gunfire" to secure vaccines amid the COVID-19 pandemic. It’s not just vaccines. As COVID-19 progressed into a pandemic, there was even a panic buying phenomenon for over-the-counter drugs in the United States. Forty percent of generic drugs in the U.S. are produced in India, but as India restricted exports of domestically produced pharmaceuticals, panic buying intensified not only in India but also in the U.S. In particular, India depends on China for raw pharmaceutical ingredients, and as China prioritized its domestic supply due to COVID-19, concerns about the collapse of pharmaceutical supply chains spread sequentially from China and India to the U.S.

Won Hee-mok, Chairman of the Korea Pharmaceutical and Bio-Pharma Manufacturers Association, pointed out that this is not just a U.S. issue. Chairman Won said, "If the pandemic prolongs, this could happen not only in the U.S. but also to us," emphasizing, "This is why self-sufficiency in domestic raw pharmaceutical ingredients is more important than anything else." Unlike other countries, Korea has been relatively free from drug shortages so far, but its high dependence on foreign raw pharmaceutical ingredients could lead to supply chain collapse in times of crisis. In pandemic situations like COVID-19, if vaccine and drug nationalism prevails, countries dependent on foreign supplies will inevitably suffer significant damage.

The issue becomes even more serious because pharmaceuticals are directly linked to the lives of the people. Chairman Won said, "Essential medicines must be produced domestically to prepare for national crises," adding, "It is a priority to establish a supply system that can meet public demand even if the entire pharmaceutical market faces a pandemic, not just COVID-19 vaccines and treatments." He emphasized, "Just as one realizes the value of air when in a place with thin air, the same goes for medicines," and added, "I hope COVID-19 serves as an opportunity to recognize once again the presence and importance of pharmaceuticals, not just vaccines." We recently met Chairman Won at the Korea Pharmaceutical and Bio-Pharma Manufacturers Association in Seocho-gu, Seoul.

-Public interest in the pharmaceutical and bio industry has increased due to COVID-19.

▲It is natural that interest in treatments and vaccines is high during an infectious disease pandemic. Especially with COVID-19, the social value of the pharmaceutical and bio industry has been highlighted. The top priority to overcome the COVID-19 crisis is to develop and produce vaccines and treatments independently. The domestic industry is currently focusing all efforts on developing treatments and vaccines, with 15 treatment candidates and 7 vaccines in clinical trials. Since pharmaceutical and bio companies are investing huge amounts in R&D, it is urgent to expand support and create an environment so that they do not give up midway due to development costs. The U.S. government invested a total of 12 trillion KRW in private companies for COVID-19 vaccine and treatment development, specifically 2.3 trillion KRW for Pfizer, 1.1 trillion KRW for Moderna, and 1.9 trillion KRW for Novavax. In Korea, out of the 44 billion KRW budget for infectious disease crisis response this year, only 26.27 billion KRW is allocated for COVID-19 related expenses.

-What is needed for continuous development of domestic treatments and vaccines?

▲Support measures such as loss compensation systems must be established. During the spread of H1N1 flu, domestic pharmaceutical companies quickly developed vaccines and contributed to suppressing the spread of the infectious disease in Korea. However, after the H1N1 subsided, losses occurred due to leftover inventory relative to investment. If such incidents repeat, pharmaceutical companies’ motivation to develop could be dampened. The government needs to take partial responsibility to prevent companies from suffering losses despite their hard work in development. Support to compensate losses should be provided for medicines produced for public interest, such as essential medicines.

-You emphasized increasing the self-sufficiency rate of raw pharmaceutical ingredients.

▲The U.S. creates added value with new drugs but depends on foreign countries for generic drugs; when COVID-19 caused supply chain issues, panic buying immediately occurred. Many countries rely on foreign countries like China for raw pharmaceutical ingredients rather than producing them domestically due to low cost-effectiveness. In Korea, while the self-sufficiency rate for finished drugs is 74%, the rate for raw pharmaceutical ingredients is only 16%, which is extremely low. If the pandemic prolongs, the global pharmaceutical supply chain could collapse. We must select about 200 urgently needed raw ingredients out of 2,000 and focus on raising the self-sufficiency rate of raw pharmaceutical ingredients to about 50% within five years. We should also consider preferential pricing for drugs using domestically produced raw materials. Policies encouraging raw pharmaceutical ingredient production, such as supporting production facility construction or tax benefits, are necessary.

Won Hee-mok, Chairman of the Korea Pharmaceutical and Bio-Pharma Manufacturers Association. / Photo by Hyunmin Kim kimhyun81@

-Domestic pharmaceutical companies are limited to technology exports due to capital, technology, and manpower constraints.

▲To create huge added value, the final product must be launched, but no domestic global blockbuster has emerged yet. I believe the cases of U.S. Gilead and Japan’s Takeda Pharmaceutical, which have become global pharmaceutical companies through major mergers and pipeline expansion, provide directions for domestic industry innovation. It is necessary to expand full support through focused R&D, mergers and acquisitions for scale expansion, and government mega-fund creation to reach global late-stage clinical trials. In drug research, if there are 10,000 candidate substances, only one reaches the market. The probability is 0.01%. The pharmaceutical industry is a typical "high risk, high return" industry. The know-how gained through failures helps reduce trial and error. The recent meaningful technology exports can be seen as active pendulum movement.

-Any suggestions to the government for the development of the pharmaceutical and bio industry?

▲We need to eliminate departmental silos and establish a presidential control tower that integrates and oversees industrial development policies to create consistent and effective nurturing policies. The Ministry of Health and Welfare handles both regulation and industrial development, which are conflicting tasks within one ministry. While appropriate regulation is natural given the nature of pharmaceuticals, a rational balance between regulation and nurturing is necessary to grow this into a future core industry. Currently, within the Ministry of Health and Welfare, the first vice minister oversees welfare with 3 offices and 2 bureaus, and the second vice minister oversees health and medical care with 1 office and 3 bureaus. Notably, the department responsible for the health industry is only a bureau, not an office, limiting its ability to establish policies and systems for industrial development. The health industry department should be promoted to an office to harmonize industrial development with regulation.

-You have been reappointed twice since becoming chairman in 2017. Expectations must be high as a long-serving chairman.

▲When I first took office, I raised the issue that "the pharmaceutical and bio industry = a national industry." Until my term ends in 2023, I want to focus on establishing practical infrastructure for open innovation. With overseas expansion frozen due to COVID-19, we have been preparing to establish a global innovation hub for Korea’s pharmaceutical and bio industry. We plan to officially operate the Korea Pharmaceutical and Bio Innovation Center (tentative name: KPBIC) in Boston, U.S. Currently, about 10 companies are participating in the MIT Industry Liaison Program (ILP) consortium. Through a global open innovation strategy, we will support pharmaceutical companies’ entry into overseas innovation ecosystems.

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