The government said it would look into whether state-funded developers of Covid-19 vaccines and treatments made any attempts to exaggerate clinical development status or inflate their stock prices.
The evaluation, consisting of a team of external experts, will start in January next year after the Korea Health Industry Development Institute (KHIDI) establishes the plan and selects a tender in December.
“Evaluation experts will include professionals in new drug development and investment,” a KHIDI official told Korea Biomedical Review. “The main purpose of this evaluation is to investigate whether companies that received government grants for Covid-19 treatment and vaccine development projects used the funds appropriately.”
However, the official stressed that the government has yet to fininalize evaluation parameters
The investigation follows an ongoing controversy over biopharmaceutical companies that received research grants for Covid-19 treatments and vaccines only to show few results.
During the early stages of the Covid-19 pandemic, 14 pharmaceutical companies applied for government funds to develop Covid-19 treatments and vaccines.
Starting with 111.5 billion won ($84.1 million) in 2020, the government invested an additional 152.8 billion won in 2021 and 321 billion won in 2022 to support the local development of Covid-19 treatments and vaccines.
However, only Celltrion and SK Bioscience succeeded in developing a Covid-19 treatment and vaccine, respectively, while the rest either scrapped their development plans or are still working on vaccines or treatments.
Notably, during the latest parliamentary audit of the Ministry of Health and Welfare, Rep. Baek Jong-hean of the ruling People Power Party had demanded a proper investigation into GC on whether the company had any intention of developing a Covid-19 plasma treatment after receiving 5.8 billion won from the government.
Ilyang Pharmaceutical also faces a police investigation on charges of exaggerating the results of its Covid-19 candidate development process to inflate its stock price.
Most recently, Donghwa Pharmaceutical announced its intention to scrap its plans to develop a Covid-19 treatment citing difficulties recruiting patients and low profitability through its third-quarter earnings report.
Except for Celltrion and SK Bioscience, of the 12 remaining companies’ only six companies – Shaperon (treatment), Eubiologics, Cellid, GeneOne Life Science, Eyegene, ST Pharm (vaccine) -- are still undergoing the development process for a Covid-19 treatment or vaccine.
Industry watchers are closely monitoring whether the evaluation will harm the industry.
“While companies that have used treatment and vaccine development for questionable gains will have to take responsibility, considerable time and resources in determining any wrongdoing as the process for verifying the will to develop are unclear,” an industry watcher said. “As a result, there are some concerns in the industry about the evaluation leading to other companies scrapping development plans and loss of momentum for new drug development.”