Is Viagra Killing the Oriental Medicine Market?
By Kim Tae-gyu
Staff Reporter
The oriental medicine market has faced setbacks over the past few years and observers are pointing their fingers at the rapid spread of erectile dysfunction treatment drugs as one of the major causes.
According to the Korea Food and Drug Administration (KFDA) and related parties, Sunday, about 71,000 tons of materials used in traditional medicines were traded here last year, the smallest annual volume since 2004.
As a result, the overall turnover at the country's oriental medicine clinics is seeing an abrupt decline after peaking at 2.42 trillion won in 2006 - according to the latest data available it fell to 2.25 trillion won the following year.
Things are worse for domestic pharmaceutical firms - their sales of oriental drugs have dropped by 14.3 percent per annum on average from around 360 billion won in 2002 to some 170 billion won in 2007.
"All the data seem to indicate that the markets for oriental medications have been shrinking over the past few years. They were rising in the early 2000s but hit stagnation in 2006," a KFDA official said.
Experts pick up a couple of reasons why the fever for alternative medicines, which had been the go-to solutions for diseases for so long here before the advent of Western products, is falling.
One is demographical - accustomed to Western-style medication and surgery, young Koreans do not like the old-fashioned remedies involving herbal medicine and acupuncture.
The other is the rising erectile dysfunction treatment drugs including imports Viagra, Cialis and Levitra as well as the locally-developed Zydena.
They had their debut here in the early 2000s and have seen sales steadily rise as the market has almost doubled from approximately 40 billion won in 2002 to 77.9 billion won in 2008.
The trend continued last year as total sales amounted to 86.2 billion won, up more than 10 percent from the previous year, said IMS Health, a consultancy.
They are also improving as amply demonstrated by the new version of Cialis. It allows men to take the pill once a day, instead of one before sexual intercourses, an irritating practice for many.
"Our therapy is loved for various reasons and one of the strongest is the belief that oriental medicines can be used to strengthen the sexual stamina of men," said an official from the Association of Korean Oriental Medicine.
"However, some of the demand appears to have shifted toward the impotence treatment pills even though we need to carry out more in-depth analysis to fully understand the shrinking markets."
In other words, erectile dysfunction drugs are regarded as substitutes for traditional oriental medicines. Economically speaking, when inexpensive substitutes are widely available, the demand for the original products goes down and so do their prices and trade.
The solution is that the original products should cut prices to compete with the cheap substitutes or somehow differentiate themselves. The problem; neither of these are easy for the oriental medicine industries, analysts point out.