LG Life Science Tops R&D Investment List of Korea-Listed Pharmas
This article was originally published in PharmAsia News
Executive Summary
SEOUL - Of the 37 local Korean pharmas listed on Korea's main KOSPI stock market, LG Life Science topped local pharmas in R&D investment last year in both scale and in proportion to its sales, according to a report released by a lawmaker in an Oct. 6 National Assembly session
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SEOUL - Of the 37 local Korean pharmas listed on Korea's main KOSPI stock market, LG Life Science topped local pharmas in R&D investment last year in both scale and in proportion to its sales, according to a report released by a lawmaker in an Oct. 6 National Assembly session. LG Life Science invested KRW60.8 billion ($50 million) - 21.6 percent of its sales last year - for R&D investment, followed by Hanall Pharmaceutical's KRW15.1 billion ($12.58 million) - 16.5 percent of its sales - and Hanmi Pharma's KRW56.6 billion ($47.2 million), or 10.2 percent of its sales. Noting that local pharmas still depend heavily on kickbacks to grow sales, opposition party lawmaker Cho Young-hee - in a parliamentary inspection session - called on the Ministry for Health, Welfare and Family Affairs to seek ways through tax incentives to help local pharmas shift their focus on R&D investment. Choi said that last year local pharmas spent KRW3.11 trillion ($2.59 billion) which represents 40.4 percent of their combined sales - up from 39.1 percent in 2007 - for "sales-related expenses," which include various types of incentives and rebates to doctors, hospitals and pharmacists. The KRW3.11 trillion is 650 percent more than the KRW475.8 billion ($396.5 million) invested in R&D last year. "Unlike other local pharmas that are largely dependent on generics and OTC products, LG Life Science has to make heavy investments in R&D for the development of globally brand-new products," LG spokesperson Park Chul-ha told PharmAsia News. "While we focus on the development of new products and subsequent clinical trials, others focus on advertisement and other sales activities for their OTC and generic products." LG Life Science's pipeline ranges from biosimilar EPO products and human-growth hormones to antibodies, vaccines and NCEs in infectious disease, metabolic disease and cardiovascular. It also has generics and branded generics in its pipeline for urological disease, musculoskeletal disease and oncology. Pharmaceuticals account for 80 percent of LG Life Science's total sales. In April 2003, the company's antibiotic Factive (gemifloxacin) became the first South Korean product approved by U.S. FDA. LG signed a deal with Gilead in 2007 for its pan-caspase inhibitor hepatitis C compound in Phase II, giving Gilead commercialization rights to LG's caspase inhibitors to treat fibrotic diseases. LG Life Sciences retains rights in China, India and Korea and keeps worldwide rights to develop and commercialize its caspase inhibitors for ophthalmic and topical uses (Also see "Gilead Expands Hep C Portfolio With LG Life Sciences Deal" - Scrip, 12 Nov, 2007.). LG Life Sciences inked a global licensing and research deal with Japanese pharma Takeda to discover, develop and commercialize anti-obesity drugs in March 2007. Under that deal, LG would be responsible for drug discovery and PK evaluation and Takeda would be responsible for subsequent development (Also see "Takeda Inks Deal To Develop Anti-Obesity Drugs With LG Life Sciences" - Scrip, 30 Mar, 2007.). Lawmaker Choi Asks For Tax Incentives For More R&D Investment Noting that global new products are well-defended by patent rights to generate large profits, lawmaker Choi called on Minister for Health, Welfare and Family Affairs Jeon Jae-Hee to seek "tax incentives" to push local pharmas toward more R&D investment. "Incentives encouraging pharmas to use even about 10 percent of their sales-related expenses is necessary," Choi said. In the first court case over rebates, three leading local South Korean pharma companies were issued stiff fines for "excessively unfair" business practices incurred by providing rebates to doctors and hospitals. Korean companies Hanmi Pharma, Choongwae Pharma and Greencross, were fined KRW150 million ($125,000), KRW100 million ($83,000) and KRW20 million ($16,600), respectively, by Seoul's Central District Court (Also see "Leading Korean Pharma Companies Issued Fines In First Court Intervention Case Over Rebates" - Scrip, 31 Jul, 2009.). Beginning Aug. 1, the Korean health ministry enforced new regulations that enable the ministry to cut the market price of a drug by up to 20 percent when its manufacturer is found to have offered kickbacks to doctors and hospitals (Also see "Korean Ministry Plan To Order Penalty-based Price Cuts On Pharmaceuticals Faces Resistance From Global And Local Players" - Scrip, 24 Jul, 2009.) - Peter Chang ([email protected]) |