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| Hanmi Pharm CEO Lee Kwan-soon, left, exchanges a signed agreement with his counterpart from Allegro Ophthalmics, a U.S. tech startup, in San Francisco, in January. The two companies will make a joint investment and share each other's patented technologies to develop medicines for various eye diseases. / Courtesy of Hnami Pharm |
By Park Si-soo
It was not so long ago that wealthy Korean patients tended to gravitate toward big hospitals in the United States, Japan or other medically advanced nations in order to treat their illnesses. The medicine they relied on for treatment was also mostly developed abroad.
Yet things are changing, slowly but surely.
Guus Hiddink, head coach of the South Korean soccer team during the 2002 World Cup and current boss of the Dutch national team, arrived in Seoul in January last year sitting on a wheelchair. He underwent arthritis surgery on his right knee at a Seoul-based hospital using Cartistem, a stem cell-based therapy for knee cartilage defects developed by Medipost, a local drug maker.
Ten months later, Hiddink revisited Seoul, standing and walking on his own two feet. His primary doctor declared that he had made a full recovery from the disease.
"I can walk to play 18 holes of golf, which I did before using a cart. I can also play tennis. So I'm very happy," he was quoted as saying in an interview.
It was also publicized that a Saudi Arabian royal family member went under the knife at Yonsei Severance Hospital in Seoul a few years ago to treat problems with his prostate and spine.
These cases indicate that Korea's prowess in its medical industry is being recognized overseas.
Such recognition by high-profile figures like Hiddink has motivated more foreign patients to come to Korea to get their illnesses treated. At the same time, this trend has encouraged domestic hospitals and pharmaceutical companies to expand their operations outside of Korea.
Some big hospitals and drug companies here have already begun aggressive overseas expansion. They are focusing on target markets by forming strategic partnerships and spending lavishly to build sales and marketing networks abroad.
The government is supportive of this. The health ministry started offering handsome subsidies and comprehensive consulting services to those seeking overseas expansion. It also plans to offer administrative assistance, believing that the medical business could become the nation's next growth engine.
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| Hanmi's scientists carry out an experiment. / Courtesy of Hnami Pharm |
Korean drugs going global
Several pharmaceutical companies have already shown impressive sales overseas. Among them are Green Cross, Yuhan Corporation, LG Life Sciences, Dong-A ST, Chong Kun Dang Bio and Hanmi Pharm.
Green Cross, the nation's biggest drug exporter, recorded more than $200 million in overseas sales last year alone.
It recently formed a strategic partnership with Russian drug company Nanolek, paving the way for it to enter the world's largest country and the lucrative European market.
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The deal calls for Green Cross to supply medical products such as vaccines to the Russian company. It will also share its technology and expertise to develop and commercialize new biologics.
"This partnership is a perfect fit for Green Cross's globalization strategy," said the firm's CEO Huh Eun-chul in a statement. "I believe that we will be able to flourish in Russia with a long-term partnership with Nanolek."
Russia is one of the fastest-growing markets in the medical industry, along with Brazil and India, according to Business Monitor International, a market researcher.
Earlier, Hanmi Pharm struck a $690 million deal to export its autoimmune disease drug-producing technology to American pharmaceutical giant Eli Lilly.
Under the deal, Hanmi will receive $50 million upfront and receive the rest depending on clinical test outcomes and sales performance. In return, Eli Lilly has won the rights to develop, manufacture and commercialize products using Hanmi's technology around the globe, except in Korea and China.
"I believe our partnership with Eli Lilly will increase the chances of a scientific breakthrough to cure various autoimmune diseases," Hanmi Pharm CEO Lee Kwan-soon said in a press release.
JW Pharmaceutical, Ildong Pharmaceutical and BCworld Pharm are preparing to enter the Saudi Arabian market. They jointly signed a memorandum of understanding with Sudair Pharma Company ― a state-owned pharmaceutical company in the Arab state ― in June last year to build four plants in Sudair that will produce anti-cancer medicine, infusion solutions, biosimilars, and cardovascular medicine.
For its part, the Korean government has introduced various supporting measures. The health ministry has raised 135 billion won ($122.1 million), up from 100 billion won in 2013, to support drug companies seeking overseas expansion throughout this year.
The ministry plans to invest 770 billion won in the project over the next four years.
Hospitals to be exported
Hospitals are another segment of the medical industry that is ripe for overseas expansion.
Under active support from the government, Seoul National University signed a contract last year to operate and manage a hospital in the United Arab Emirates. It marked the first time that a Korean hospital was selected to operate a major general hospital overseas.
In a similar deal, Seoul St. Mary's Hospital recently formed a partnership with VPS Healthcare Group in Abu Dhabi for the establishment and operation of a healthcare center in the city.
Yonsei Severance Hospital also opened a healthcare center for wealthy Chinese people in Yixing Shi and signed a partnership with Hiking Group to open a general hospital with 1,000 beds in Qingdao.
In December 2013, Gangnam Severance Hospital opened a health checkup center in Kazakhstan.
Last month, President Park Geun-hye said the government has given its commitment to supporting the globalization of Korean hospitals, especially in the Middle East.
Experts said medical services have great potential there because Middle Eastern countries have far less doctors per capita than other countries and nearly one-tenth the number of hospital beds compared with Korea.
According to the consulting firm Deloitte, the Saudi market, which is the largest pharmaceutical market in the Middle East, shows 4.7 percent growth every year, and it is expected to become a US$4.7 billion (5.16 trillion won) market by 2016.
