All eyes of Korean drugmakers are on Daewoong Pharmaceutical, as it has achieved the pioneering feat of advancing to the U.S. market with a home-made generic drug.

Daewoong released the antibiotic Meropenem in the U.S. on March 14, making it the first Korean generic drug to plant its flag in the American market. Meropenem, an antibiotic in the carbapenem line, is the generic version of Merrem released by international pharmaceutical company AstraZeneca in 1996.

Time will tell how much of the U.S. antibiotic market Daewoong will occupy, but the fact that Meropenem is the first Korea-produced generic drug to enter the U.S. market is significant. It not only passed production facility certification and market competitiveness standards of the meticulous U.S. Food and Drug Administration but showed the potential for medicines produced by the superior technology of Korean pharmaceutical companies to succeed in the United States.

Why did Daewoong choose Meropenem?

Particularly, the U.S. demand for carbapenem-series antibiotics is high because of insufficient supply.

Unlike Korea, where more than 15 carbapenem antibiotic products are sold, those in the U.S. frequently run out of stock, leading to an unstable supply. The situation was so dire that there had been seven cases (1,114 days) of carbapenem antibiotics being out of stock until 2013.

As of April 2017, there are six carbapenem antibiotics on the market. Daewoong’s Meropenem is the seventh licensed carbapenem and the fourth generic one. Two or three more generic carbapenem antibiotics have got the go-aheads since Meropenem’s approval.

Daewoong has been working for several years to become an international healthcare company. While examining overseas markets with a high potential, they learned about the insufficient supply of carbapenem antibiotics in the U.S. and immediately propelled its U.S. entry.

Another reason for expanding into the U.S. market was the continual growth of the carbapenem antibiotics market in America. By IMS standards, the market was worth $500 million in 2015, and that for Meropenem-based products was $150 million. By sales volume, it accounts for 70 percent of the carbapenem antibiotics market, and sales grew consistently by 20 percent a year on average from 2010 to 2015.

A smart strategy shortened release time

Meropenem won the FDA’s approval for U.S. marketing in 2015. Daewoong urgently needed to find a partner to secure a production facility and take charge of circulation and marketing within America.

The problem was Daewoong needed to make massive capital spending to build facilities, including one exclusively for current Good Manufacturing Practice (cGMP) production. Daewoong chose a smart tactic here -- pushing for open collaboration in the area of production. Instead of building its production facilities, the company joined forces with an international partner that held cGMP infrastructure and sought its market entry without additional facility investments.

Daewoong’s U.S. vendor for its part collaborated with a parenteral solution company specializing in anticancer drugs and antibiotics. Contract negotiations began last June and ended in this past February. Two months later, its U.S. marketing started. The U.S. partner will be responsible for Meropenem’s import, circulation and marketing.

Through Meropenem’s release Daewoong Pharmaceutical has made the significant accomplishment of releasing the first generic drug made in Korea into the U.S. market.

It’s hard to pass the permit standards of the U.S., which is both the world’s largest pharmaceuticals market and has fastidious FDA regulations. Korean companies’ production technology of generic drugs is excellent by global standards, but matching production facilities to cGMP standards is no easy task, and finding a proper marketing partner also requires many efforts.

Also, the U.S. insurance system, which is different from Korea’s, results in fierce competition among generic drugs and makes market success trying. The high U.S. demand for carbapenem antibiotics increases Daewoong’s chances of success.

There’s a keen interest on whether the first made-in-Korea generic drug in the U.S. will turn out to be a success.