South Korea Pharmaceuticals & Healthcare Report

Providing expert analysis, independent forecasts and competitive intelligence on the pharmaceuticals and healthcare industry.

Report includes: BMI Industry View, Industry SWOT Analysis, Industry Forecasts, BMI's Pharmaceuticals and Healthcare Risk Reward Index, Market Summary, Economic Forecasts, Company Profiles and Competitive Landscape.

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South Korea Pharmaceuticals & Healthcare Report
Product Price
$1,295.00

BMI View: Significant regulatory changes in response to the illegal rebate scandal in South Korea will be unlikely. The country already has tough laws in place, which can be leveraged to impose tough penalties on Novartis and other firms practicing such sales tactics. Moreover, the pharmaceutical industry holds increasing importance to the country's economy, and the government has taken significant steps to foster its growth. This includes the pursuit of policies that depart from its focus on cost containment and instead accentuate the priority placed on the sector.

Headline Expenditure Projections

  • Pharmaceuticals: KRW17,117bn (USD15.1bn) in 2015 to KRW17,666bn (USD14.9bn) in 2016; +3.2% in local currency terms and -1.0% in US dollar terms. Forecast broadly unchanged from previous quarter with US dollar amount revised upward.

  • Healthcare: KRW116,599bn (USD103.1bn) in 2015 to KRW124,224bn (USD105.3bn) in 2016; +6.5% in local currency terms and 2.1% in US dollar terms. Forecast upgraded from previous quarter with an upgrade to US dollar value .

Headline Pharmaceuticals & Healthcare Forecasts (South Korea 2014-2020)
2014 2015 2016f 2017f 2018f 2019f 2020f
f = BMI forecast. Source: WHO, National Sources, BMI
Pharmaceutical sales, USDbn 15.750 15.130 14.970 15.590 16.100 16.850 17.880
Pharmaceutical sales, % of GDP 1.12 1.10 1.09 1.08 1.06 1.03 1.01
Pharmaceutical sales, % of health expenditure 15.2 14.7 14.2 13.8 13.3 12.9 12.5
Health spending, USDbn 103.980 103.060 105.270 113.170 120.700 130.440 142.920

Risk/Reward Index

In Q416, South Korea ranks fourth out of the 19 countries surveyed in the Asia Pacific region. South Korea's score for its Rewards variable is high, indicating the country's favourable longer-term standing in terms of its pharmaceutical market development. However, we note Risks - particularly in relation to pharmaceutical pricing and reimbursement - will remain present, especially as the population ages and requires more public sector resources.

Latest Updates

  • In July 2016, Hanmi Pharmaceutical President Lee Gwan-sun noted that the firm is embarking on a research strategy that will reduce the emphasis on generics and shift towards a specialisation in branded medicines. Lee also disclosed that the company has a pipeline of 28 new drug candidates and that it devotes the bulk of its research spending into the areas of autoimmune diseases, diabetes and cancer.

  • That same month, South Korea confirmed its ninth case of Zika infection. The patient had returned from a trip while travelling in Vietnam.

  • In August 2016, prosecutors disclosed that Novartis Korea offered KRW2.6bn (USD2.4mn) in illegal rebates from 2011 to 2016. A total of 34 people have been implicated in the case, including Novartis Korea chief executive Moon Hak-sun. According to the prosecutors, Moon tried to go around laws by funding academic events organised by publishers of medical journals where the invited doctors allegedly received kickbacks presented as attendance fees.

BMI Economic View

The Bank of Korea kept its base rate steady at 1.50% following its May 13 monetary policy meeting, but we retain our forecast for the central bank to cut its base rate by 25 basis points to 1.25% over the coming months to support exports against a backdrop of low inflation.

BMI Political View

South Korea's ruling Saenuri party suffered a significant defeat in the parliamentary elections held on April 13. With no party securing a majority, the liberal opposition People's Party has emerged as a kingmaker. As such, we expect the lack of a parliamentary majority to have a negative impact on the economy and note that this could hasten President Park Geun-hye's descent to lame duck status. The economy is also likely to continue to face headwinds as bills aimed at revitalising growth languish in parliament. Accordingly, we have downgraded our short-term political risk index score to 76.0 from 79.6 previously to reflect these challenges.

BMI Industry View
7
Table: Headline Pharmaceuticals & Healthcare Forecasts (South Korea 2014-2020)
7
SWOT
9
Industry Forecast
11
Pharmaceutical Market Forecast
11
Latest Updates
11
Structural Trend
12
Table: Pharmaceutical Sales, Historical Data And Forecasts (South Korea 2012-2020)
12
Healthcare Market Forecast
14
Latest Updates
14
Structural Trends
15
Table: Healthcare Expenditure Trends, Historical Data And Forecasts (South Korea 2012-2020)
15
Table: Government Healthcare Expenditure Trends, Historical Data And Forecasts (South Korea 2012-2020)
16
Table: Private Healthcare Expenditure Trends, Historical Data And Forecasts (South Korea 2012-2020)
17
Prescription Drug Market Forecast
18
Structural Trends
18
Table: Prescription Drug Market Indicators, Historical Data And Forecasts (South Korea 2012-2020)
19
Patented Drug Market Forecast
20
Structural Trends
20
Table: Patented Drug Market Indicators, Historical Data And Forecasts (South Korea 2012-2020)
21
Generic Drug Market Forecast
22
Structural Trends
22
Table: Generic Drug Market Indicators, Historical Data And Forecasts (South Korea 2012-2020)
23
OTC Medicine Market Forecast
24
Structural Trends
24
Table: Over-The-Counter (OTC) Medicine Market Indicators, Historical Data And Forecasts (South Korea 2012-2020)
27
Pharmaceutical Trade Forecast
28
Structural Trends
28
Table: Pharmaceutical Trade Data And Forecasts (South Korea 2014-2020)
29
Table: Pharmaceutical Trade Data And Forecasts local currency (South Korea 2014-2020)
30
Industry Risk Reward Ratings
31
Asia Pacific Risk/Reward Index
31
South Korea Risk/Reward Ratings
37
Rewards
37
Risks
37
Regulatory Review
39
Regulatory Review
39
Intellectual Property Issues
39
Pricing And Reimbursement Regime
40
Table: Different Price Control Levers
40
Market Overview
46
Market Overview
46
Healthcare System
46
Table: Healthcare Resources (South Korea 2010-2015)
47
Table: Healthcare Personnel (South Korea 2010-2015)
47
Table: Healthcare Activity (South Korea 2010-2015)
48
Healthcare Sector
48
National Health Insurance Corporation
49
Research And Development
51
Biotechnology Sector
52
Clinical Trials
54
Epidemiology
56
Competitive Landscape
59
Research-Based Industry
59
Generic Drugmakers
60
Table: Multinational Market Activity
62
Pharmaceutical Distribution
63
Pharmaceutical Retail Sector
64
Table: Pharmaceutical Retailers, 2000-10
64
Table: Timeline Of OTC Slow Liberalisation
66
Company Profile
67
Daewoong Pharmaceutical
67
Dong-A Pharmaceutical
70
Eli Lilly
75
GlaxoSmithKline
78
Hanmi Pharmaceutical Co
81
Merck & Co
84
Novartis
87
Pfizer
91
Sanofi
94
Yuhan Corporation
97
Demographic Forecast
101
Demographic Outlook
101
Table: Population Headline Indicators (South Korea 1990-2025)
102
Table: Key Population Ratios (South Korea 1990-2025)
102
Table: Urban/Rural Population & Life Expectancy (South Korea 1990-2025)
103
Table: Population By Age Group (South Korea 1990-2025)
103
Table: Population By Age Group % (South Korea 1990-2025)
104
Glossary
106
Methodology
108
Pharmaceutical Expenditure Forecast Model
108
Healthcare Expenditure Forecast Model
108
Notes On Methodology
109
Risk/Reward Index Methodology
110
Index Overview
111
Table: Pharmaceutical Risk/Reward Index Indicators
111
Indicator Weightings
112

The South Korea Pharmaceuticals & Healthcare Report features BMI Research's forecasts for drugs and healthcare expenditure and imports and exports, focusing on the growth outlook for the prescription, OTC, patented drugs and generics market segments.

BMI's South Korea Pharmaceuticals & Healthcare Report provides industry professionals, strategists, company executives, investors, analysts and sales/marketing heads with independent forecasts and competitive intelligence on the South Korea pharmaceutical and healthcare industry.

Key Benefits

  • Benchmark BMI's pharmaceutical and healthcare market forecasts for South Korea, to test other views - a key input for successful budgeting and strategic business planning in the Korean pharmaceutical and healthcare market.
  • Target business opportunities and risks in the Korean pharmaceutical and healthcare sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments in South Korea.
  • Assess the activities, strategy and market position of your competitors using our company profiles (including SWOTs, KPIs and latest activity) and competitive landscape tables.

Coverage

BMI Industry View

An at-a-glance perspective on the latest regulatory developments, key forecast indicators and major corporate developments, covering the prescription, OTC and generics markets. The pharmaceuticals and healthcare SWOT outlines strategic factors that affect the basic assumptions underpinning BMI’s forecast analysis, and taken together with BMI’s political, economic and business environment SWOTs, it gives a complete overview of market climate.

BMI Industry Forecast Scenario

Industry forecasts to end-2019 for all key indicators, supported by explicit assumptions, plus analysis of key downside risks to the main forecasts:

  • Healthcare: Total healthcare expenditure (USDbn), healthcare expenditure (% of GDP), healthcare expenditure per capita (USD), hospital beds, doctors, and birth & mortality rates (all per ‘000 population).
  • Pharmaceutical Market: Drug expenditure in USDbn, % of GDP and per capita (USD).
  • Patented Drug Market: Prescription drug sales (USDbn & % of total sales).
  • Generic Drug Market: Generic product sales (USDbn), generic sales (% of total sales).
  • OTC Drug Market: OTC sales (USDbn & % of total sales).
  • Macroeconomic Forecasts: Nominal and real GDP, % real GDP growth, % private consumption growth, % industrial output growth, % consumer price index, % GDP price deflator, exports, imports, trade balance, current account balance, foreign direct investment, exchange rate against USD, government expenditure and external debt.

BMI’s Pharmaceuticals and Healthcare Risk Reward Index

BMI’s Risk Reward Index provides investors (both national and multinational) looking for opportunities in the region with a clear country-comparative assessment of the market’s risks and potential rewards. Each of the country markets are scored using a sophisticated model that includes more than 40 industry, economic and demographic data points to provide indices of highest to lowest appeal to investors, with each position explained.

Market Summary

A snapshot of key market characteristics, including total size of the pharmaceuticals and healthcare segments, growth drivers, leading therapeutic areas and the competitive landscape

Industry Developments

A focus on government healthcare reforms, epidemiological trends, mergers and acquisitions, product launches, market entries, FDI activity, R&D, biotechnology, clinical trials and supply chain issues.

Regulatory Regime

Details of the industry regulatory framework and key legislation covering the licensing of new products/services, pricing and reimbursements, intellectual property, taxation and advertising, as well as analysis of the overall regulatory burden.

Competitive Landscape

The competitive landscape section provides comparative company analyses and index by USD sales and % share of total sales – for the total pharmaceutical sector, as well as the OTC, generics and distribution sub-sectors.

Company Profiles*

Examines the competitive positioning and short- to medium-term business strategies of key industry players. Strategy is examined within the context of BMI’s industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape to generate Company SWOT analyses. The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.

*Company profiles are not available for every country. Those reports instead contain information on the current activities of prominent companies operating in the market.