A controversy erupted over GC's failure to develop a plasma treatment for Covid-19 during the latest parliamentary audit of the Ministry of Health and Welfare.
During the audit process, Rep. Baek Jong-hean of the ruling People Power Party said that upon reviewing additional data from the Ministry of Health and Welfare, he found materials that raised a reasonable suspicion about GC's Covid-19 treatment development process.
Rep. Baek also called for a thorough investigation into pharmaceutical companies that have stopped developing COVID-19 treatments and vaccines after receiving government funds.
According to Baek, 14 pharmaceutical companies, including GC, applied for government funds to develop Covid-19 treatments and vaccines.
They received a total of 167.9 billion won ($116.8 million) in national research grants from the government.
However, none of them have succeeded in developing a new drug except for Celltrion, Baek said. "Notably, GC had promised to quickly develop a plasma Covid-19 treatment and supply it to the public free of charge, which was something that even world-famous global pharmaceutical companies were unable to do because of the burden of R&D expenses," he said.
GC received 5.8 billion won from the government, which accounted for 60 percent of the total research cost of 9.7 billion won, Baek added.
Despite receiving the research grant, GC stopped developing the plasma treatment during the phase 2a clinical trial, he went on to say.
"Looking at the general clinical procedures for new drugs by pharmaceutical companies, most of them apply for conditional approval to the Ministry of Food and Drug Safety after completing phase 2 clinical trials," Baek said. "However, GC scrapped its plan to develop the plasma Covid-19 treatment during the first phase of a phase 2 clinical trial, despite receiving a national research grant."
It is necessary to examine whether GC intended to develop a Covid19 plasma treatment in the first place, Baek added.
Baek also accused GC of stealing government funds.
"While Daewoong Pharmaceutical, which also failed to develop a treatment in the second phase of the study, returned a portion of its research grant to the Ministry of Health and Welfare through a transparent audit, GC didn't return any of its research grants," Baek said. "If GC made the public believe that the company could develop a Covid-19 treatment beyond its capabilities and made profits out of the false hope, this is a major fraud against Korean people.”
The Ministry of Health and Welfare said it will look into the entire process of supporting research and development for Covid-19 treatments and vaccines based on what Baek said.
GC said Baek’s remarks were not true.
"The total research cost related to the development of plasma treatment was 9.73 billion won, including government grant (5.8 billion won) and the private funding (3.93 billion won), of which 7.3 billion won was the actual cost," a GC spokesperson said to Korea Biomedical Review. "According to the ratio of the unused amount (2.43 billion won), the company returned 1.97 billion won through the Korea Health Industry Development Institute in April."