Il-yang Pharmaceutical, HanAll Biopharma, and Bioneer have failed to renew the government’s certification of Korea Innovative Pharmaceutical Company (KIPC) recently.

Pharmaceutical sources said it was particularly offbeat the government excluded Il-yang and HanAll Biopharma even though they have already developed novel drugs successfully and clenched large export deals.

Il-yang developed Noltec (Korean New Drug No. 14), a third-generation proton pump inhibitor (PPI)-containing treatment, and anticancer drug Supect (Korean New Drug No. 18). Last year, HanAll Biopharma signed a 30 billion won ($27.1 million) licensing-out deal with U.S. firm Roivant Sciences for a new drug candidate to treat autoimmune diseases.

On Tuesday, the Ministry of Health and Welfare announced that it would extend the 2015 KIPC certifications for 31 pharmaceutical companies for three years.

However, Il-yang, HanAll Biopharma, and Bioneer that had renewed the certification in 2012 were taken out from the innovative drugmakers' list this time. The government did not disclose reasons it removed the three firms.

Some observers said one of the three companies must have given up the certification after being investigated for illegal rebates.

In the application form for renewal of the KIPC certification, the company should report any violation of giving more than 5 million won in rebates. The company would face disadvantages in the review if such case were reported more than a certain number of times.

“Given the size and performance of the KIPCs, it is unlikely that they will fail to get the certification again unless they were abnormally running the business, such as receiving a probe for illegal rebates,” said an official at a KIPC. “If a KIPC fails to renew the certification, it will face a greater impact than it fails to get one initially.”

Another source said the KIPC system would be a benchmark to distinguish healthy drugmakers from unhealthy ones.

“If a KIPC fails to renew the certification, it can do so in the second half. However, re-challenging will not be very easy because the company cannot rule out the possibility of failure,” the source said, requesting anonymity.

He said the KIPC criteria are getting stricter, adding that the certification will become a “special business card” for pharmaceutical firms.

Korea adopted the KIPC system under the Special Act on Fostering and Support of Pharmaceutical Industry in 2012. The government gives the KIPC certification to companies with excellent capabilities in research and development of new drugs and overseas market expansion.

The government introduced the system to certify drugmakers that will play a leading role in enhancing the Korean pharmaceutical sector as a future growth engine.

sjh@docdocdoc.co.kr

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