Korea Unveils 5-Year Roadmap To Nurture Domestic Industry

South Korea’s five-year blueprint to nurture the pharma industry outlines a string of measures including plans to set up smart clinical trial platforms, use artificial intelligence for new drug R&D, invest in public purpose pharma R&D and improve drug approval and reimbursement systems.

South Korea has unveiled a plan spanning 2018 to 2022 that aims to nurture and support the domestic pharma industry. It includes a focus on beefing up R&D of novel drugs, supporting industry experts and start-ups, increasing demand-oriented export support and establishing a strong base to nurture the industry through improved rules and systems.

As part of these efforts, the government and private sector aim to double R&D investment in the pharma sector to KRW3.5tn ($3.25bn) in 2022 from KRW1.7tn in 2016. The government targets to raise the number of South Korea-developed novel global drugs to 15 by 2022 from six in 2018, while improving the country's vaccine self-sufficiency rate to 70% in 2020 from 46% in 2016.

The latest plan follows the government's previous five-year plan for 2013-2017 that mainly comprised measures to help the industry to evolve from its small- and medium-sized company-focused as well as generic- and domestic demand-oriented structure. The new roadmap is also in line with efforts of many other countries which are aiming to expand new drug development and improve rules to boost competitiveness of the pharma industry.

In a joint statement from multiple ministries including the health ministry, the South Korean government noted that the previous plan has resulted in limited outcome and explained the need for new improved plans.

For example, the government and the private sector had ended up investing about KRW8tn in R&D in the cited period, less than the planned KRW10tn. In particular, the government's share of R&D investment remained flat in the five-year period at about KRW240bn per year.

South Korea has been striving to develop novel drugs, but still lacks any global blockbusters. The country isn’t sufficiently prepared for the fourth industrial revolution, and weak tie-ups among universities, research institutes and pharma firms have been making it difficult to lead R&D outcome into commercialization. (The "fourth industrial revolution," a concept promoted by the World Economic Forum, reflects the idea of advancement through merging different types of technology, such as biological and digital, rather than just development of individual technologies. A Korean government committee is tasked building on this concept to make the country more globally competitive.)

Although South Korea’s biologics market is expanding, there still isn’t a sufficient systematic base for drug approval and pricing rules. In addition, the country’s competitiveness in clinical trials is declining.

Need For New Improved Plans

As a result, the government now expects to come up with strategic R&D plans, including setting up smart clinical trial centers and developing cutting-edge biologics and new drugs using artificial intelligence.

It expects to seek public purpose R&D investment to deal with rare and incurable diseases as well as new infectious diseases. The country also needs to shore up pharma start-ups and foster experts in core sectors such as R&D and manufacturing.

In addition, the government hopes to come up with a strategic support system to enhance export capacity and help localization of South Korean companies in overseas markets.

The government expects to reinvigorate private investment by creating funds and expanding tax incentives as well as improving drug approval and pricing systems to boost novel drug development.

Set Up Smart Clinical Trial Platform, Stronger Networks

To support promising next generation sectors that can lead the fourth industrial revolution, the government aims to set up smart clinical trial platforms and stronger networks.

While the country’s clinical trial support policy has so far been focused on building the infrastructure of individual clinical trial centers and their capacity, the government will now aim to set up smart clinical trial centers that have a single unified management system. It will build platforms that can support clinical development and patient recruitment, using standardized and integrated clinical trial-related resources as well as AI technology.

The government will also set up a smart safety management system that enables monitoring of subjects in real time by sponsors and researchers, using wearable devices and integrated data management networks.

It plans to develop cutting-edge, converged clinical trial technology to lower costs and increase efficiency of clinical trials. It will set up clinical trial co-operation networks that can manage and share R&D resource, platform and data of the smart clinical trial centers.

Support Cutting-Edge Biologics R&D, New Drug R&D Using AI

The government also intends to expand research support that creates clinical evidence of stem cell therapies and expansion in indications of approved stem cell therapies.

It will support development of innovative next-generation cell therapies such as embryonic stem cell-based cell therapies, induced pluripotent stem cell-based cell therapies and complex cell therapies. It will also support studies to develop base technology to commercialize cell therapies.

The government will also support development of gene therapies for degenerative neurological disease and retina disease as well as novel immune cell-based gene therapies that target incurable cancer.

R&D support will also be expanded to boost new drug development using artificial intelligence and improve access of clinical data of pharma firms.

Boost Open Innovation Based New Drug R&D, Support Drug Repositioning

Although open innovation is becoming increasingly important to the pharma industry, research outcome hasn’t largely led to commercialization due to a lack of tie-ups among universities, research institutes, and pharma firms.

The South Korean government plans to support discovery of multiple innovative novel drug candidates by seeking open innovation R&D by industry, universities, research institutes and hospitals. The country will also set up a consultation system for development of innovative novel drugs in all cycles as well as a system to support designing clinical trials of innovative novel drugs.

While drug repositioning can speed up the launch of new drugs at relatively lower costs, there have not been such cases in South Korea so far. Although the number of new drug candidates that have failed in development is increasing, there have rarely been studies to find new indications for these drug candidates.

The government aims to support investigator-initiated clinical trials of medicines that have the potential for drug repositioning, by selecting rare and incurable disease sectors. It will also support researches to discover new indications of clinically failed new drug candidates of pharma firms.

Invest In Public Purpose Pharma R&D

The government plans to support R&D of rare and incurable disease therapies as well as customized therapies to overcome dementia. It aims to diversify therapy targets, obtain diversified target drug library and discover drug candidates to develop dementia therapy that can fundamentally treat the disease.

As South Korea is seen to be weak in risk management of major infectious diseases and lacks private sector investment in this area, the government will seek to develop technology that can comprehensively deal with infectious diseases.

The country also hopes to come up with a medium-to long-term R&D plan to enhance its vaccine self-sufficiency rate, currently at about 50%. To achieve this goal, it will support development of vaccines ranging from public vaccines to cutting-edge ones. It will also develop technology that can speed up the approval and review of vaccines.

While major countries are increasingly shoring up investigator-initiated clinical trials, South Korea lacks systemic support for investigator-initiated clinical trials. Investigator-initiated clinical trials accounted for 27% of total clinical trials in South Korea in 2016, lower than 44.3% in the US and 36.8% in the UK.

Induce Investment By Private Sector Via Policy Financing, Tax Support

Financing efforts to boost the global competitiveness of the domestic industry are also part of the government blueprint.

The government expects to create a fund worth at least KRW30bn that will invest in early stage biotechs. It will also form a KRW50bn fund in the next five years jointly with the pharma and biotech industry to support development of vaccines.

South Korea expects to improve financial policy to foster private sector funds and venture capital as well as mergers and acquisitions. Although the government provides tax incentives for investment in new drug R&D and drug quality control facilities, the private sector generally seeks continued tax support for R&D investment.

The government plans to strengthen tax incentives in R&D including discovery of new drug candidates and clinical trials. It will also consider tax support in development of innovative, incrementally-modified drugs.

It will continue to provide tax incentives in capital spending to improve drug quality control. It will also support M&A of small and medium-sized companies as well as venture capital invested companies that have new drug R&D capabilities.

Back New Drug Development Via Improved Rules, Reimbursement System

To improve rules pertaining to cutting-edge biologics, the government aims to ready drug pricing and approval rules that reflect characteristics of these biologics. It will come up with reasonable drug pricing rules for biologics for which it is difficult to prove cost effectiveness using the existing system. It will also strive to come up with a reasonable fast review process for cutting-edge biologics that are used in diseases with high medical needs.

The government expects to improve the post-launch safety management system of cutting edge biologics by effecting measures to set up a long-term tracking and management system from the state level. This is expected to resolve difficulties faced by the industry in registration and management of patients and confirmation of medical records after administration of latest biologics.

Amid industry’s call to effectively reflect value of new drugs and improve patient access, the government expects to continuously complement the current drug reimbursement system.nIt will review measures to properly recognize value of new drugs to induce new drug development. It will also discuss measures to improve the current drug reimbursement system to improve patient access.

South Korea also expects to support the recruitment of subjects for clinical trials by improving the nation’s perception on clinical trials. The country will expand the scope of clinical trials that can proceed with studies after the IRB approval is granted without seeking the Ministry of Food and Drug Safety’s clearance once these studies have met certain conditions.

The government expects to reduce time and cost for documentation required for clinical trials by standardizing various clinical trial related document forms. Approval of diverse and flexible clinical trial designs in a single clinical trial to enable conducting various studies are also expected to be facilitated.

The government also plans to discuss reimbursement of standard of care treatment cost in clinical trials. It plans to apply reimbursement of comparator drugs used in clinical trials for public purposes. The government will initially apply reimbursement in investigator-initiated clinical trials as well as in development of rare and incurable disease drugs, as also new infectious disease drugs if their public benefit is recognized even if the trials are initiated by companies.

The blueprint also aims to build the innovative pharma system by adding R&D-oriented companies, which outsource drug manufacturing, to the scope of companies eligible to be designated as innovative pharmas. Alongside, it will beef up conditions pertaining to social responsibility and ethics to be designated as innovative pharmas. It will also seek to apply preferable drug prices for the companies designated as innovative pharmas along with the existing R&D support and tax incentives.

From the editors of PharmAsia News.