Sales of Korean erectile dysfunction treatments hit all-time high in 2023 for the third consecutive year, with local pharmaceutical companies having around 90 percent of the market share.

Leading the charge were Korean generic drugs like Hanmi Pharm's Palpal and Gugu, and Chong Kun Dang's Sendom, significantly outpacing the iconic original brands from multinational pharmaceutical companies such as Pfizer's Viagra and Eli Lilly's Cialis, which saw their market share dwindle to about 10 percent.

According to data from IQVIA, a drug market research company, the Korean market size for erectile dysfunction treatments reached 136.9 billion won ($113 million) in the last year, marking a 6.1 percent increase from the previous year.

This growth continues a trend of record-breaking expansions, with the market growing 21.8 percent over the past three years from 112.4 billion won in 2020.

The surge in the market is primarily driven by the local pharmaceutical industry, which has effectively captured 89.8 percent of the market share.

Last year alone, sales from domestic companies' erectile dysfunction treatments amounted to 122.9 billion won, marking a 7.1 percent increase from the preceding year.

Among the local giants, Hanmi's Palpal, a generic version of Viagra, has solidified its market leadership.

Achieving a sales milestone of 23.4 billion won last year, Palpal's dominance is a testament to the shifting consumer preference towards generics.

This trend is further supported by Sendom and Gugu, which have also reported impressive sales, reinforcing the strength and potential of local pharmaceuticals in the competitive ED treatment market.

Sendom, a generic of Cialis, secured the second spot with sales reaching 12.5 billion won, a 7.2 percent increase from the prior year, and Gugu, another Hanmi generic referencing Cialis, also saw a notable increase in sales with sales amounting to 12.1 billion won, up 12 percent from the previous year.

In comparison, the decline of Viagra and Cialis was more pronounced in this context. Last year, Viagra's sales dropped to 8.4 billion won, a 2.8 percent decrease, while Cialis sales dropped to 5.6 billion won, a 1.6 percent decrease in sales. The combined market share of these once-dominant brands has now reduced to just over 10 percent.

Meanwhile, some corners of the pharmaceutical industry criticize that the competition in the erectile dysfunction treatment market is intensifying, leading to a winner-takes-all situation.

After the patents for Viagra and Cialis expired, there was a genuine expectation within the domestic pharmaceutical industry that simply launching a generic drug of either drug could easily rake in 10 billion won.

However, the reality has shown that only a few generic drugs, such as Hanmi's Palpal and Gugu, and Chong Kun Dang's Sendom, have surpassed annual sales of KRW 10 billion.

Other Korean pharmaceutical companies have found moderate success. For instance, Dong-A ST's Zydena led the next tier with a yearly revenue of 7.3 billion won, marking a 4% increase from 2022. SK Chemicals, Korea Kolmar, and Daewoong's generic erectile dysfunction treatments have maintained revenues in the 5 billion won range.

Also, while CTC Bio's GODN saw a 10 percent increase in sales from 2022, yet it only reached 2.8 billion won.

This competitive pressure has led some domestic companies to exit the market or reduce the number of products they offer. Dongwha Pharm decided to withdraw its generic Viagra, Hecate, from the market in 2018 due to poor sales, highlighting the challenges faced by smaller players in a saturated market.

"With many local pharmaceutical companies entering a fixed-size market, the burden of sales and marketing has only increased," an industry watcher told Korea Biomedical Review. "Lower-tier companies, in particular, are struggling to compete in the remaining market, making it a reality that the cost-efficiency of their efforts is declining."