By Cathy Rose A. Garcia
Staff reporter
The healthcare and biopharmaceutical industries may have been designated as two of the new growth engines for the Korean economy, but there are still faces many challenges to overcome, such as a lack of international cooperation in R&D and incentives to attract foreign direct investment, according to industry experts.
``What does a company look for? Infrastructure, incentives and collaboration on large investments... If Korea wants to style itself as a leader in innovation, it is time for Korea to shape itself as one,'' said Naveen Rao, regional medical director for Asia-Pacific at MSD Pharmaceuticals, during the Korea-U.S. healthcare innovation seminar at the Lotte Hotel, Thursday.
Korea is already being recognized for its excellent clinical research and drug development infrastructure, world-class researchers, hospitals and facilities. It is already one of the leading countries in clinical trial tests.
``Korea is well-positioned in the global clinical research value chain, with a high quality of skilled workers and its cost-effectiveness. Investments into infrastructure supporting clinical research will position Korea uniquely,'' said Ravinder Singh, senior manager at Oracle Health Services.
Despite these advantages, experts say Korea needs to implement more pro-innovation policies to encourage growth in the sector.
``Korea has the potential but government policy would have a role in how this potential would be harnessed,'' Kim Choong-ho, managing director of Medtronics Korea, said.
Kim proposed several pro-innovation policies, such as simplified channels of cooperation between foreign companies and the Korean government; increased participation of foreign companies in government R&D projects; and promotion of foreign direct investments and globalized standards.
``One of the key factors discouraging FDIs is that Korea has neglected the importance of the regulatory infrastructure. Reasonable, transparent and consistent regulations and meeting global standards are critical for industry development,'' Kim said.
Incentives, such as tax breaks and intellectual property protection, are critical issues for foreign investors, especially as development of new products are becoming more difficult and more expensive.
For every 10,000 new compounds discovered, only one results in an FDA-approved drug. A paper ``The Price of Innovation: New Estimates of Drug Development Costs'' published in the Journal of Health Economics showed that R&D expenditures for each new drug averaged over $1.3 billion in 2006, compared to $318 million in 1991.
``We are willing to invest in the R&D but we need to work with countries to produce these products that can save lives. This is what it takes. We need collaboration and partners. I believe if there is the infrastructure, incentives and collaboration, more investors will be coming to Korea,'' Rao said.
Experts also agreed that more collaboration between Korea and foreign companies and institutions is needed to spur innovation and to fund more research and development.
``Korean companies are limited in their technology, experience and investments. We really need partnerships,'' said Pai Jin-keon, executive vice-president of ChoongWae Pharma.
Korea is facing stiff competition from other Asian countries, particularly China, Taiwan and India, who are also making a push to attract foreign investments in their own biopharmaceutical and healthcare industries.
The Korean government has already pledged to invest 600 million won ($508 million) in the next nine years for the development of new drugs in the domestic industry. The blueprint, conceived by the health, education and science and knowledge economy ministries, will have a policy of ``open innovation.''
Innovation was the buzzword at the seminar, which was organized by the American Chamber of Commerce in Korea and Pharmaceutical Research and Manufacturers of America.
``This is the future of our relationship ― innovation ... Healthcare can be one of the many areas we can work on together,'' U.S. Ambassador to Korea Kathleen Stevens said, in a speech at the seminar.
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