The Korea Pharmaceutical and Bio-pharma Manufacturers Association (KPBMA) said the revision of the Pharmaceutical Affairs Act to restrict generic drugs would be an inflection point to bring about a paradigm shift in the biopharmaceutical industry.

The KPBMA made these and other points in its latest policy report in the form of a forum, "Biopharmaceutical industry in a transformational period."

This policy report presented the prospects and meanings of pharmaceutical and biotechnology industry changes, such as amendments to the Pharmaceutical Affairs Act, including the so-called "1+3 restriction." The 1+3 restriction regulation limits the number of generic drugs that can receive approval with a single bioequivalence test data to a maximum of four, drastically changing the industrial landscape, it said.

So far, the Ministry of Food and Drug Safety has granted drug manufacturing licenses to all pharmaceutical companies on the condition that they submit bioequivalence test data on foreign medications for which patents have expired.

In the forum, Park Ji-man, the head of KPBMA's insurance and distribution team, pointed to chronic problems in the domestic drug market structure, such as poor quality control of drugs and the provision of rebates, caused by the excessive launches of generic drugs, which he said has led to the revision of the Pharmaceutical Affairs Act.

"Amid the ongoing Covid-19 pandemic, the biopharmaceutical industry is attracting attention as a forerunner of health and national security, and the hope of becoming a global biopharmaceutical powerhouse is no longer a goal of the industry alone, but a national goal," Park wrote. "Therefore, for the biopharmaceutical industry to establish itself as a national industry, it must obtain public’s trust."

Both the 1+3 regulation, which heralds a major change in the industry, and regulation to obligate contract sales organizations (CSO) to prepare and submit economic profit and expenditure reports will resolve the crowded general market, prevent over-competition, and promote healthy growth of the industry, he added.

Professor Lee Tae-jin Lee of Seoul National University's Graduate School of Public Health also expected that some small- and medium-sized pharmaceutical companies would face difficulties due to the 1+3 restriction regulation. “In the long term, however, the regulation is needed to ensure the healthy growth of the biopharmaceutical industry and enhance the competitiveness of generic drugs,” he said.

Professor Lee stressed that the most important task is to improve the quality and reliability of generic drugs if the nation wants to improve the competitiveness of local generic drugs globally.

To achieve such goals, Lee said that the nation should limit the number of generic drugs, provide appropriate compensation for high-quality generics, transparency in information disclosure on generic drug quality, and rapid improvement of shortcomings in the generic drug management system.

Boryung Pharmaceutical CEO Lee Sam-soo also agreed that it is urgent to reduce the number of approved generic drugs to strengthen drug quality control.

"Even a small company needs a plant manager and a staff in charge of manufacturing quality, but there is no big difference in the number of approved items between small and large pharmaceutical companies," Lee wrote. "To improve the level of good manufacturing practice (GMP) at plants, companies should design the quality level from the R&D stage, and companies must introduce quality by design, in which they define the process conditions as a range rather than a single point."

Lee also emphasized that quantitative and qualitative improvement of manpower engaged in quality control is a mandatory requirement.

"Except for some companies, there are many cases where the number of qualified personnel compared to items is markedly insufficient," he said. "Therefore, systematic training should be supported while increasing quality personnel."

In the report, the KPBMA also highlighted the paradigm shift in the industry amid convergence with high-tech industries.

"There is a need for a collaboration platform that establishes a practical cooperative process for drug development based on artificial intelligence (AI), which enables pharmaceutical companies, universities, research institutes, and medical institutions to share and utilize new drug development-related data and analyze them in real-time," said Kim Hwa-jong, head of the AI-based new drug development support center. "For this to happen, the center would like to propose a federated drug discovery (FDD) platform at the center."

According to Kim, each institution can share a common model without building an AI model for individual analysis by using the FDD platform.

"This will minimize the difficulty of securing AI experts at each company, and the process of collaborating around high-quality data will also facilitate the discovery of new pipelines," he said.

Professor Jeong Jae-hoon of Chonbuk National University's College of Pharmacy also commented that there needs to be a paradigm shift in the industry through digital therapeutics.

"The scope of application of electronic drugs and digital therapeutics is no longer limited to mental and neurological diseases," Professor Jeong said. "By using the relationship between nerve stimulation, immunity, and metabolic function, the range of treatment for electronic drugs and digital therapeutics has expanded to include obesity, diabetes, hypertension, cardiovascular disease, and cancer."

Jeong stressed that a world would come in which patients suffering from chronic diseases will not have to take the same chemical drugs.

"If the current concept of pharmaceuticals persists even at that point in the future, there will no longer be a place for pharmaceutical companies to stand on," he said. "As the development of such technologies will continue, the industry must create a new path of digital therapy and electronic medicine."