As the Covid-19 pandemic continues, there are growing calls to increase the self-sufficiency of pharmaceutical raw materials in Korea.

Industry insiders have stressed the need for Korea to increase its self-sufficiency of raw materials to prevent any problems that may arise when the supply and demand become unstable.
Industry insiders have stressed the need for Korea to increase its self-sufficiency of raw materials to prevent any problems that may arise when the supply and demand become unstable.

The call for self-sufficiency of pharmaceutical raw materials has recently increased after the nation has been making a flurry of diplomatic efforts to secure urea and its solution from other countries to avert a potential logistics crisis amid a supply crunch caused by China's curbs on exports of urea.

Last month, China tightened export procedures of urea amid a power crisis caused by a coal supply shortage. Coal is the main feedstock to produce urea.

Pharmaceutical industry insiders have pointed out that the industry may see a crisis in drug manufacturing similar to that of the urea solution as the self-sufficiency of raw materials is only around 16 percent.

According to the 2020 Food and Drug Statistical Yearbook, the self-sufficiency of both finished and raw material drugs has been on a downward trend since 2010.

The report showed that while the self-sufficiency of finished drugs was 81 percent in 2010, it declined to 80.3 percent in 2011, 78.8 percent in 2012, 79.8 percent in 2013, 78.4 percent in 2014, 78.5 percent in 2015, 76.8 percent in 2016, 77.6 percent in 2017, 75.6 percent in 2018, and 74.1 percent in 2019.

The decline in the self-sufficiency of raw material drugs has been steeper. After showing an increase in the early 2010s and hitting a record-high figure of 35.4 percent in 2017, the self-sufficiency of raw material drugs fell sharply to 26.4 percent in 2018 and 16.2 percent in 2019.

The number of raw material drug producers also decreased by more than 100 from 386 to 263 from 2010 to 2019, which, in turn, had led a 21.1 percent increase of raw materials imports from $1.9 billion in 2010 to $2.2 billion in 2019.

The problem is that the biopharmaceutical industry is highly dependent on Chinese raw materials, similar to the recent urea solution crisis, which originated in China.

Against this backdrop, industry insiders argue that support such as disclosing the origin of medicines and changing the preferential treatment policy for medicines manufactured by Korean-made raw materials.

"I think the current situation is similar to that of Covid-19 vaccines," an official from a pharmaceutical raw material manufacturer said to Korea Biomedical Review, asking to remain anonymous. "If we don't have self-sufficiency, we can't use it as much as we want when there is a high dependence for such materials."

Therefore, there is a need to increase the self-sufficiency rate, he added.

The official stressed that the low self-sufficiency rate of pharmaceutical raw materials is not because Korea lacks the technology to make them, but due to the low price of such materials.

"Since the price is so low, drug makers are looking for cheap raw materials, so there is no choice but to lean towards China," the official said. "The government needs to supplement its incentive policy for pharmaceutical raw material companies."

As a part of increasing the self-sufficiency of raw materials, the government is giving preferential drug prices when treatments use domestically produced raw materials, but the actual tangible effect is small, so the more drugs a company makes can lead to a decrease in profits, he added.

The official explained that if the government guarantees the drug price to a certain extent, while the unit price may rise due to more expensive raw materials, it will increase the safety of the drugs.

In response to such demands from the industry, the Ministry of Food and Drug Safety said that it plans to develop a plan as soon as possible through policy research.

"Policy researches are in progress to increase Korea's self-sufficiency of raw materials," Ministry of Food and Drug Safety spokesperson Kim Kwang-jae said. "We plan to develop manufacturing and quality control technologies for items that are highly dependent on imports or are unstable in supply and demand to achieve self-sufficiency of essential national drugs."

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