Drugmakers face ‘Chinese risk’ due to low raw material self-sufficiency


As the Covid-19 pandemic continues, calls are mounting to increase self-sufficiency in pharmaceutical raw materials in Korea.

Industry insiders have pointed out the need for Korea to increase its self-sufficiency in raw materials to avoid any problems that may arise when supply and demand become unstable.

The call for self-sufficiency in pharmaceutical raw materials recently intensified after the country deployed a flurry of diplomatic efforts to obtain urea and its solution from other countries to avoid a potential logistics crisis. amid a supply shortage caused by China’s restrictions on urea exports.

China last month tightened procedures for exporting urea amid an energy crisis caused by a shortage of coal supplies. Coal is the main raw material for producing urea.

Pharmaceutical industry insiders have pointed out that the industry may see a crisis in drug manufacturing similar to urea solution, as raw material self-sufficiency is only around 16%.

According to the 2020 Food and Drug Statistical Yearbook, self-sufficiency in finished drugs and raw materials has been on a declining trend since 2010.

The report showed that while self-sufficiency in finished drugs was 81 percent in 2010, it fell to 80.3 percent in 2011, 78.8 percent in 2012, 79.8 percent in 2013, 78, 4 percent in 2014, 78.5 percent in 2015, 76.8 percent in 2016, 77.6% in 2017, 75.6% in 2018 and 74.1% in 2019.

The decline in self-sufficiency in pharmaceutical raw materials has been more marked. After recording an increase in the early 2010s and reaching a record figure of 35.4% in 2017, self-sufficiency in raw materials for drugs fell sharply to 26.4% in 2018 and 16.2% in 2019.

The number of pharmaceutical raw material producers also decreased by more than 100, from 386 to 263 from 2010 to 2019, which in turn led to a 21.1% increase in raw material imports from $ 1.9 billion in 2010 to $ 2.2 billion in 2019.

The problem is that the biopharmaceutical industry is heavily dependent on Chinese raw materials, like the recent urea solution crisis, which started in China.

In this context, industry insiders argue that support such as the disclosure of the origin of drugs and the change in the preferential treatment policy for drugs made from raw materials made in Korea.

“I think the current situation is similar to Covid-19 vaccines,” an official at a pharmaceutical raw materials manufacturer told Korea Biomedical Review, asking to remain anonymous. “If we don’t have self-sufficiency, we can’t use it as much as we want when there is a heavy reliance on such materials.”

Therefore, there is a need to increase the self-sufficiency rate, he added.

The official pointed out that the low self-sufficiency rate of pharmaceutical raw materials is not because Korea does not have the technology to manufacture them, but because of the low price of these materials.

“Since the price is so low, drug makers are looking for cheap raw materials, so there is no choice but to look to China,” the official said. “The government must complete its incentive policy for pharmaceutical raw material companies.

As part of increasing the self-sufficiency in raw materials, the government grants preferential prices to drugs when the treatments use raw materials produced in the country, but the real tangible effect is small, so that the more a company drug manufacturing may result in decreased profits, he added.

The official explained that if the government guarantees the price of drugs to a certain extent, while the unit price may increase due to more expensive raw materials, it will increase the safety of drugs.

In response to such requests from the industry, the Food and Drug Safety Ministry said it plans to develop a plan as soon as possible through policy research.

“Policy research is underway to increase Korea’s self-sufficiency in raw materials,” Food and Drug Safety Ministry spokesman Kim Kwang-jae said. “We plan to develop manufacturing and quality control technologies for items that depend heavily on imports or have unstable supply and demand in order to achieve self-sufficiency in essential national medicines.”

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