Health and Welfare Minister Park Neung-hoo said he felt frustrated about not being able to support innovative local pharmaceutical firms because it would touch the thorny issue of the Free Trade Agreement between Korea and the U.S.

Washington demands Seoul apply the same criteria to Korean and foreign pharmaceuticals when providing benefits to innovative drugmakers, claiming that supporting locals only would be in breach of the bilateral trade deal. Park worried that attempting to support Korean firms only could end up giving even more benefits to multinational pharmaceutical companies.

Park shared his views on pharmaceutical issues in a meeting with reporters covering healthcare on Tuesday.

In October 2016, the health and welfare ministry announced a plan to offer drug pricing benefits to local pharmaceutical companies that successfully develop globally competitive drugs.

However, the issue was one of the major negotiation agenda during the Korea-U.S. negotiations for a revised FTA last year, with the U.S. claiming that supporting locals only violated the deal. The Korean government revised the plan to remove the “local” part, and the plan is almost dead now.

Explaining the situation, Park told reporters why it is difficult to support local developers of innovative medicines exclusively.

“Because of this issue, I had to attend the foreign affairs ministerial meeting. The drug pricing was one of the thorniest issues in the FTA renegotiations, and the U.S. side was particularly tenacious about it,” Park told reporters. “U.S. officials said the FTA should apply equally to foreign or local companies and took issue with the government’s support for local developers of globally innovative drugs.”

As the pressure from the U.S. is severe, the Korean government “might have to provide 1 trillion won support for multinational pharmaceutical companies if it tries to support 10 billion won for locals,” he added.

Park noted, however, the pharmaceutical sector would keep growing and expected drug exports to continue to expand. “Cosmetics, pharmaceuticals, and bio-health will be the backbone of the Korean economy, so I will help those industries set a solid foothold for growth in the long term,” he said.

The top healthcare policymaker also promised to report the issue of multinational firms’ abuse of exclusive sales rights of original drugs to the World Health Organization.

To do so, Seoul will have a separate session raise the issue at the upcoming WHO meeting in May, he said.

“Since I became the minister, there have been several problems that failed to make any progress. One of them is multinational pharmaceutical firms’ abuse of monopoly. However, there are limitations to address the issue by ourselves,” Park said. “It’s not possible to deny their exclusive drugs, but we have to think how much we have to recognize them and how to respond.”

Park went on to say that if dealing with it in a session is not enough, Korea will have to seek solidarity with other countries.

“I will try to discuss response measures at a government level. I’m gathering several countries to support us. Japan was indifferent at first but is showing interest now,” he said.

Park added that he would let the WHO members know multinational drugmakers’ abuse of monopoly and raise the need for a joint response. “I hope that there will be some progress in the May meeting,” he added.

kss@docdocdoc.co.kr

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