[Column] Save the medical device industry first to protect public health

The growth engine of Korea's medical device industry has stalled. As of 2024, production fell by 1.7 percent year-on-year. Despite the introduction of digital products and a modest rise in exports, the decline is not limited to the domestic market.

Imports are also down for the second consecutive year, with the number of items falling to 27,000 from around 30,000 in 2020. While some may view this as a sign of market renewal, the issue is that many of the renewed products are less profitable yet essential for patient care. Losing access to these critical devices could directly jeopardize patient safety.

Behind this crisis is a “triple whammy” hitting small and medium-sized manufacturers: sluggish sales, rising regulatory costs, and longstanding low reimbursement rate policies.

In recent years, regulatory costs -- including license fees, environmental levies, and various taxes and quasi-taxes -- have continued to rise, making it increasingly difficult for companies to maintain existing products, let alone invest in new development. On top of this, distributor and payer fees at the distribution stage further erode margins, leading to more products being withdrawn from the market due to unsustainable returns. If this trend continues, the stable supply of essential medical devices will be at risk -- posing a serious threat to public health.

Administrative inefficiency is another key factor. The current medical device approval process in Korea is overly complex, with unclear and overlapping roles among regulatory agencies. Repeated reviews and certifications caused by inter-agency cross-checks add unnecessary delays and confusion.

The fact that nearly 70 percent of applications are met with requests for supplemental documents underscores a systemic flaw in the review process. These prolonged, months-long approval delays impose financial burdens on companies -- costs that are ultimately passed on to consumers and patients.

Worse still, within this regulatory environment, large multinational corporations and small Korean companies are forced to compete under the same conditions -- hardly a level playing field. As seen in the U.S., local small and medium-sized enterprises (SMEs) urgently need practical support, such as reduced licensing fees and differentiated testing and inspection requirements. Without a more SME-friendly, manufacturing-oriented regulatory framework, the current system will continue to tilt further in favor of larger players.

It is time to move beyond asking “why did this happen” and focus on concrete solutions for overcoming the crisis. The regulatory, taxation, and distribution frameworks -- spread across multiple ministries including the Ministry of Health and Welfare, Ministry of Food and Drug Safety, Ministry of Environment, Ministry of Economy and Finance, and Ministry of Trade, Industry and Energy -- can no longer be addressed in isolation. A pan-governmental, integrated management system centered on the National Planning Commission must be established, accompanied by regulatory streamlining and adjustments to the cost structure.

The medical device industry is more than just manufacturing -- it is a core public good directly tied to people’s lives. To safeguard the efficiency of the public health insurance system, excessive regulations and levies, complicated licensing procedures, and unreasonable distribution fees must be thoroughly reviewed. This is not merely about protecting the medical device industry; it is the state’s fundamental responsibility and obligation to protect the health and lives of its people.

If the new government’s national policy aims to revitalize the economy, the medical device industry must be recognized as a core pillar. In Korea’s aging society, the medical device industry has the potential to grow into a global powerhouse. Structural reforms and policy shifts need to start now to transform the sector into a high-value-added industry, leveraging emerging technologies such as AI.

The government must act now. The crisis facing the medical device industry is, at its core, a crisis of public health.