[Press Release, Aug. 3, 2020 / unofficial translation ] Domestic Pharmaceutical Market Shows 5.2% Year-on-Year Growth Rate in 2019 - The production amount of pharmaceuticals increased by 5.7% YoY, and the export surged by 11.2%. - The Production amount of quasi-drugs shows the highest growth rate in the last three years. ■■ Pharmaceutical sector □ The Ministry of Food and Drug Safety(MFDS; Minister Eui-kyung Lee) announced that the domestic pharmaceutical market size increased to KRW 24,310 billion. The market showed a growth rate of 5.2% in 2019 compared to 2018(KRW 23,117.5 billion), indicating a steady market growth. * Market Size: Production ? Exports + Imports ○ The total production amount of pharmaceuticals stood at KRW 22,313.2 billion, which is a 5.7% increase compared to 2018(KRW 21,105.4 billion) and showed a 7.1% average annual growth rate in the past five years, reaching three times the overall manufacturing growth(2.4%). * Production amount of pharmaceuticals: (2015) KRW 16,969.6 billion → (2016) KRW 18,806.1 billion → (2017) KRW 20,358 billion → (2018) KRW 21,105.4 billion → (2019) KRW 22,313.2 billion * Annual average GDP growth rate(2015-2019): All industries(3.7%), manufacturing(2.4%), pharmaceutical(7.1%) □ Korea’s pharmaceutical market in 2019 was mainly characterized by ▲an increased share of finished drug product manufacturing and domestic production of new drugs; ▲the steady growth of drug exports; ▲the growth of the domestic biopharmaceutical market and the expansion of export focused on biosimilars; and ▲a continued rise in drug imports. ■ Increased share of finished drug product manufacturing and domestic production of new drugs ○ Last year’s production performance for finished drug products and APIs stood at KRW 19,842.5 billion(88.9% of the total) and KRW 2,470.6 billion(11.1% of the total), respectively, with an increased share of finished drug product in the domestic drug production. *Share of finished drug product: (2015) 87.5% → (2016) 86.8% → (2017) 86.2% → (2018) 87.9% → (2019) 88.9% *Production amount of finished drug products: (2015) KRW 14,856 billion → (2016) KRW 16,332.4 billion → (2017) KRW 17,551 billion → (2018) KRW 18,543.8 billion → (2019) KRW 19,842.5 billion *Production amount of APIs: (2015) KRW 2,113.6 billion → (2016) KRW 2,473.7 billion → (2017) KRW 2,807 billion → (2018) KRW 2,561.6 billion → (2019) KRW2,470.6 billion ○ The production amount of ethical drugs among finished drug products amounted to KRW 16,618 billion, maintaining 80% or higher share of the production amount over the last 5 years. * Share of ethical drugs: (2015) 83.6% → (2016) 83.6% → (2017) 83.2% → (2018) 84.0% → (2019) 83.7% * Production amount of ethical drugs: (2015) KRW 12,421.8 billion → (2016) KRW 13,658.1 billion → (2017) KRW 14,594.9 billion → (2018) KRW 15,585.2 billion → (2019) KRW 16,618 billion ○ 21 domestically produced new drugs yielded KRW 235 billion, equalling a year-on-year increase of 26.4%. Also, 6 products* generated a total profit of KRW 10 billion or more. * K-CAB Tab.((formerly)CJ Healthcare), Kanarb Tab.(Boryung Pharmaceutical), Zemiglo Tab.(LG Life Sciences), Noltec Tab.(Il-Yang Pharm), Duvie Tab.(Chong Kun Dang Pharmaceutical Corp.), Pelubi Tab.(Daewon Pharmaceutical company) ○ Regarding the production performance by companies, “Hanmi Pharm” maintained its hold on the first place in terms of profit, earning KRW 1,013.9 billion, an increase by 11.7% compared to 2018(KRW 907.5 billion), and was followed by “Chong Kun Dang Pharmaceutical Corp.”(KRW 856.1 billion), “Daewoong Pharmaceutical”(KRW 739.2 billion), and “Green Cross”(KRW 682 billion), “Celltrion”(KRW 592.6 billion). ○ Looking at the production performance by products, Celltrion’s “Remsima Inj. 100mg” took first place with KRW 108.7 billion, followed by Handok’s “Plavix Tab. 75mg”(KRW 95.9 billion), and Green Cross’s “Human Serum Albumin Inj. 20%”(KRW 86.4 billion). ■ Steady growth of drug exports ○ The export amount of pharmaceuticals increased to USD 5,195.15 million, hitting a record high and up by 11.2% compared to 2018(USD 4,673.11 million). Its annual average export growth rate has remained high with 15.2% in the last 5 years. * Drug export amount : (2015) USD 2,947.27 million(22.0% increase) → (2016) USD 3,120.40 million(5.9% increase) → (2017) USD 4,071.26 million(30.5% increase) → (2018) USD 4,673.11 million(14.8% increase) → (2019) USD 5,195.15 million(11.2% increase) * 2019 drug export amount in Korean won: KRW 6,058.1 billion * Converted amount based on the yearly average currency exchange rates of the Economic Statistics System(ECOS) of the Bank of Korea (2019: KRW 1,166.11, 2018: KRW 1,100.58) ○ Looking at exports by country, Japan(USD 575.84 million) was the largest drug export destination, followed by Germany(USD 571.29 million) and the U.S.(USD 529.09 million). - In particular, Switzerland(USD 43.65 million→USD 137.36 million) and Belgium(USD 26.80 million→USD 102.62 million), both of which are European countries, experienced year-on-year surges of 214.7% and 282.9% respectively. ■ Growth of the domestic biopharmaceutical market, and the expansion of export focused on biosimilars ○ Domestic biopharmaceutical market in 2019 amounted to KRW 2600.2 billion, an increase by 16.6% compared to 2018(USD 2230.9 billion). - Recombinant products took up the biggest share in the biopharmaceutical market, and their market size surpassed KRW 1 trillion for the first time. * Market size by product types: recombinant products KRW 1131.9 billion(47.5% increase compared to 2018), vaccines KRW 619.6 billion (7.9% increase compared to 2018), cellular therapy products KRW 78 billion (26.2% increase compared to 2018) ○ The export amount of biopharmaceuticals stood at USD 1,283.18 million, of which USD 714.19 million(55.7% of the total amount) worth of products were exported to Europe. - In particular, the export to Asia(USD 209.49 million, 35% increase compared to 2018) and Latin America and the Caribbean(USD 193.26 million, 49.1% increase compared to 2018) regions saw a noticeable spike. * Export amount of biopharmaceuticals: (2015) USD 809.25 million → (2016) USD 1,063.97 million(31.5% increase) → (2017) USD 1,368.51 million(28.6% increase) → (2018) USD 1,559.25 million(13.9% increase) → (2019) USD 1,283.18 million(17.7% decrease) ○ Most of the exported products were biosimilars, which yielded USD 874.52 million and accounted for 68.2% of the total biopharmaceutical export amount. * Export amount of biosimilars: (2015) USD 439.32 million → (2019) USD 874.52 million (yearly average growth rate of 18.8% in the last 5 years) * Exported biosimilar products: (2015) 1 type from 1 company → (2019) 5 types from 3 companies (Celltrion’s “Remsima,” “Truxima,” “Herzuma,” LG Chem’s “Eucept”, and Chong Kun Dang’s “Nesbell”) ■ Continued rise in drug imports ○ The import amount of pharmaceuticals stood at USD 6,907.51 million, rising by 6.2% compared to 2018(USD 6,501.34 million). Ranking countries by drug import amounts, U.S.(USD 928.34 million) was listed at the top, followed by China(USD 848.66 million), Germany(USD 811.49 million). - Among them, the import of biopharmaceuticals increased by 10.1% compared to 2018(USD 1,213.58 million), amounting to USD 1,336.72 million. * Drug import amount: (2015) USD 4,950.67 million → (2016) USD 5,636.32 million → (2017) USD 5,579.67 million → (2018) USD 6,501.34 million → (2019) USD 6,907.51 million * 2019 drug import amount converted to Korean won: KRW 8,054.9 billion * Import amount of biopharmaceuticals: (2015) USD 738.22 million → (2016) USD 911.39 million → (2017) USD 1042.35 million → (2018) USD 1213.58 million → (2019) USD 1336.72 million ■■ Quasi-drug sector □ Quasi-drug production performance in 2019 went up to KRW 1,657.4 billion, a 14.5% increase compared to 2018(KRW 1,447.3 billion) and the highest growth rate in the last three years. * Production amount : (2017) KRW 1, 470.3 billion → (2018) KRW 1,447.3 billion → (2019) KRW 1,657.4 billion ○ The number of manufacturers and product items also showed 14% and 8.8% increases year-on-year, with 382 manufacturers in 2019(up from 335 manufacturers in 2018) and 2,881 product items in 2019(up from 2,648 in 2018), respectively. □ The main characteristics of domestic quasi-drug market in 2019 include ▲spikes in the production amount of filtering respirator; and ▲the share of top five product items comprising most of the production amount. ■ Amount of filtering respirator production soars ○ The production amount of filtering respirators in 2019 amounted to KRW 207.7 billion, an 81.4% increase compared to 2018(KRW 114.5 billion) and a 516.3% or higher spike when compared to 2017(KRW 33.7 billion). - It seems that the surge in the production of “filtering respirators” is attributable to the increased needs to protect the respiratory system amid last year’s the fine dust problems and other similar events. * Production amount of all types of masks: (2017) KRW 38.1 billion → (2018) KRW 119.3 billion → (2019) KRW 223.1 billion * Production amount of filtering respirators: (2017) KRW 33.7 billion → (2018) KRW 114.5 billion → (2019) KRW 207.7 billion ■ Top five product items comprising most of the production amount ○ Top five product items with the highest production performance are toothpaste products(KRW 562.8 billion, 34.0%), medicine for internal use(KRW 346.6 billion, 20.9%), feminine hygiene products(KRW 235.6 billion, 14.2%), face masks(KRW 223.1 billion, 13.5%), and bandages, adhesive plasters, and other similar articles(KRW 132.6 billion, 8.0%). ○ When ranked by company, “Dong-A Pharmaceutical”(KRW 322.2 billion) maintained first place as in 2018, followed by “LG Household & Health Care”(KRW 258.7 billion), “Amorepacific”(KRW 126.4 billion), and “Yuhan-Kimberly”(KRW 111.0 billion), “Aekyung Industrial”(KRW 101.1 billion). These companies accounted for 55.5% of the total production performance. ○ When ranked by product item, “Bacchus-D Solution”(KRW 164.1 billion) remained in first as in 2018, followed by “Bacchus-F Solution”(KRW 103.8 billion) and “Perioe Total Complete Clear Toothpaste(package)”(KRW 67.1 billion). □ Minister Lee stated that “as healthy life expectancy has become an essential concept in the era of healthcare 3.0, the global pharmaceutical market continues to expand thanks to economic growth and population aging. Considering that the pharmaceutical and bio industries are promising sectors with an enormous potential for job creation, both the public and private sectors must do their utmost to support the continued development of the two sectors.” ○ The Minister also mentioned that “the MFDS will expand the information sharing to explore emerging market opportunities going forward and promote various policies to enhance national competitiveness in the pharmaceutical sector through efforts such as concluding the Memorandum of Understanding with the Russian health authorities.” ※ Please refer to the attachment of Press Release in Korean dated Aug. 3, 2020 for more specific statistics.