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‘Regulatory reform will develop medical device industry’
  • By Marian Chu
  • Published 2018.05.09 14:00
  • Updated 2018.05.09 14:00
  • comments 0

A significant reason for the lack of development in Korea’s medical device sector is the regulatory environment that provides little incentive for people to develop innovative new technology, Professor Kim Nam-kug says.

Professor Kim is an engineer in medicine. As an assistant professor of convergence medicine and radiology at Asan Medical Center and member of the New Industry Investment Council under the Prime Minister’s Secretariat, Kim acts as the missing link between engineering and medicine by developing innovative technology in a sector that has experienced little growth.

Professor Kim Nam-kug stressed the need for regulatory reforms in the medical equipment industry, during a recent interview with Korea Biomedical Review.

Currently, Kim is working to raise the Korean medical industry’s competitiveness to lift it to the level of primary medical equipment powers. As the head of the council, he has changed around 30 to 40 regulatory policies that hinder innovative development.

Advanced countries, such as the U.S., European Union, and Japan, are leading players in developing new medical devices. These developed countries, like Korea, are in the process of developing new technology-based tools, including 3D printing and artificial intelligence (AI)-based devices, bringing all parties back to a starting line in the Fourth Industrial Revolution.

“I started in this field more than 20 years ago, but there has been little development. We should develop the medical equipment industry for our survival. We cannot survive without seeking a new field, and this is especially true for medical devices,” Kim said. “But the medical industry is a tightly regulated sector. I realized that if I cannot change the regulatory environment, the development of the medical industry would be impossible.”

Korea currently has a three-pronged regulatory system for medical devices, involving the Ministry of Food and Drug Safety (MFDS), the Health Insurance Review and Assessment Service (HIRA), and the National Evidence-based Healthcare Collaborating Agency (NECA), according to Kim.

The MFDS deals with the safety and efficacy of a product, HIRA determines whether the product is insurable, and NECA determines whether it is a new technology.

Under the existing regulatory framework, Kim noted that imported products have an advantage over domestically developed products.

“Previously confirmed, imported products from developed countries have a strong track record with the three agencies, and they can get approval from the MFDS, and prove product efficacy and cost-effectiveness, which affects the two other institutions,” Kim said.

“Medical devices developed here, on the other hand, don’t have anything. They may get cleared by the MFDS but often cannot get past HIRA or NECA because both require five-year data. They don’t have money or time to create a track record that proves cost-effective, effective medicines,” he added.

In the U.S., the private insurance sector help firms gather data requested by health authorities, Kim said. Then they can switch over to the public insurance sector like Medicare or Medicaid.

“In South Korea, we don’t have a private sector for insurance – it’s illegal. Since no one can pay for it, the company that developed the new device and got MFDS approval must use their own money to prove the efficacy and cost-effectiveness of the product for up to five years,” Kim said. “It’s impossible.”

As a result, the government doesn’t pay for developing new products; instead, it pays for developed products, which has deterred innovation in the domestic medical device sector and increased imports.

To solve the issue, Kim proposed changing the role of the three agencies so that the MFDS, which is currently a “neutral” institute, plays a central role in evaluating pre-testing for evidence of insurance with limited scope instead of the NECA. In this way, companies may gain support to develop new medical devices without having to change the entire public insurance system.

“Korean medical device firms have good potential with high competency and skill,” Kim said. “But our regulations prevent us from developing new medical devices.”


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