Speeding Up Clinical Trials, Approvals Essential to Catching Up to China’s Bio Sector
The bio industry unanimously agreed that to stave off China’s rapid pursuit and compete in the global market, the speed of processing 'clinical trials' and 'approvals'—the bottlenecks of new drug development—must be increased. This was the diagnosis made at a roundtable discussion on the bio industry’s policy and market environment held in Jongno-gu, Seoul on the 26th. Participants including Lee Seung-kyu (Vice Chairman of the Korea Bio Association), Lee Young-mi (Chair of the Bio Investment Strategy Subcommittee at the National Bio Innovation Committee), Hwang Man-soon (CEO of Korea Investment Partners), and Seo Yong-beom (Head of Bio & Healthcare at Samil PwC) attended, emphasizing deregulation and investment revitalization as key tasks for K-Bio’s advancement.
CEO Hwang Man-soon began by analyzing the growth drivers of China’s bio industry. He stated, "While capital investment is a factor, the significantly accelerated licensing and clinical trials are the main elements," calling for increased speed in domestic clinical trials and product approvals. He further added, "We must move away from a structure where the Ministry of Food and Drug Safety bears all responsibility when issues arise; companies must also share the burden of responsibility."
Regulations were also identified as an obstacle. Vice Chairman Lee noted that current regulations are excessive in areas such as cell and gene therapies and digital healthcare, pointing out, "Development is difficult if we are bound by regulations."
Concerns regarding the market environment were raised. At the roundtable, there was a consensus that the delisting of "penny stocks" (under 1,000 won), the introduction of the KOSDAQ stock price limit system, and the lowering of generic drug prices have dampened the investment sentiment in the pharmaceutical and bio industries. CEO Hwang proposed offering incentives for investment in biotech, joint research, and M&A by large firms, noting that due to drug price reforms lowering generic prices, traditional pharmaceutical companies are forced to seek new survival strategies.
Criticisms regarding the need to overhaul the compensation structure were voiced. Executive Director Seo stated, "Looking at the 'Innovative Pharmaceutical Company Certification' system, while the government offers favorable drug pricing in response to corporate investment, it is difficult for small and mid-sized pharmaceutical companies to perceive this as a tangible incentive," calling for increased rewards for external investment in bio companies.
Chairman Lee called for investment and attention in basic science, stating that new technologies, such as antibody-drug conjugates (ADC) treatments, ultimately stem from solid foundational science. Citing Denmark’s Novo Nordisk, maker of the diabetes and obesity drug Wegovy, as an example of consistent funding for innovative technology, he emphasized that the foundation for industry investment must be "patient capital" that is long-term and willing to take risks.
Vice Chairman Lee suggested that public-private funds should be reviewed to see if they can mitigate private investment risks or distribute returns to private investors first. He also called for improvements to the regulations regarding accumulated deficits. For KOSDAQ-listed companies, an increase in the number of business years where accumulated deficits exceed 50% of capital can lead to a designation as an "administrative issue." The bio industry has continuously raised concerns that this regulation hinders research and development.
