The Koreans are coming

Or are they already here?

Over the past decade the number of Korean pharmaceutical companies operating in the Philippines saw consistent growth and expansion in terms of the number of players and number of brands in the market.

However, while Korean brands are impossible to miss in the automotive, shipping and electronic industry, recalling a dominant Korean pharmaceutical product or company may prove challenging to many even to those who are into the industry.  This is despite the fact that Korea ranks among the top 10 in the pharma market worldwide. In 2008 they ranked 2nd. in Asia in biotech patent applications and outnumbered Japan and China in the number of clinical trials, recording 216 international trials and 184 domestic trials. These are huge feats for a nation with barely one half of Philippine (48 million) population and who are technically still at war with their hostile neighbor.

For better understanding we need to look at the strong support in terms of infrastructure, financing and subsidy that the Korean government provides its various industries (dominated by Chaebols) with emphasis on one specific industry at a time as growth engine of their economy. 

While the Korean Biotech industry is poised to make its presence felt in Asia and worldwide, internally, important developments are likewise adding pressure on biotech and pharmaceutical companies to seriously consider overseas market to sustain their growth trajectories:

• While generic (& branded generic) penetration in western economies is between 20-30% in terms of market share, in Korea this number is already a staggering 70%. As a result of fierce competition local prices of medicines are going down leading to thinner margins and anemic growths.
• The expected impact of the Korea-US Free Trade Agreement (FTA) on the pharmaceutical industry is a huge concern to local Korean companies. The FTA will force Korea to amend copyrights, patent and trade mark laws, giving greater protection to patent holders and further opening up the market to the Multinationals.
• Regulatory pressures and high product validation cost.

In the Philippines one of the dominant Korean pharma company is Korea United Pharmaceuticals (KUPI). KUPI rely largely on marketing collaboration with local companies such as Qualimed for its Oncology lines and recently with One Pharma who markets its NSAID brand Clanza (launched in 2008). Incidentally, KUPI does not even register in the top 20 domestic pharma companies in Korea which indicates that once the big players decide to join the fun, the Philippine pharmaceutical landscape will see major changes and everyone will finally take notice. 

Among the top Korean companies that we can expect to come knocking at our doors are:

                            2009 Ethical Market 

Company              Sales (Million US$)               Rank                                                                                                                             

Daewoong                 468.1                                 1

Dong-a                      449.1                                 2

Hanmi                       431.8                                 3

Handok                     348.1                                 4

Yuhan                       334.3                                 7

Chong Kun Dang         289.1                                 9

Choongwae               288.3                                10

CJ                            274.5                                11

Ildong                       206.0                                14

Shin Poong                179.9                                17