Chemical or bio? Pharmaceutical industry at a crossroads of choice

[헬스코리아뉴스 / 이순호] The dominance of the pharmaceutical market is shifting from chemical drugs to biopharmaceuticals. In the global market, the market is changing so rapidly that many of the so-called ‘good’ items are filled with biopharmaceuticals. In the midst of this, the development of new chemical drugs tends to be slower than in the past. As the number of chemical drugs whose patents have expired has decreased, the generic market is not what it used to be.

In the domestic pharmaceutical market, chemical drugs are still strong. However, the prevailing outlook is that changes in the global pharmaceutical industry’s environment will also affect the domestic market within the next few years. Domestic pharmaceutical companies, which have been focusing on chemical drugs, are faced with a choice between sticking to their existing business or entering a new business called biopharmaceuticals. And the time for decision is fast approaching.

According to the report ‘Bio Pharmaceutical Industry Trend and Korea’s Competitiveness Status’ published by the Export-Import Bank of Korea’s Overseas Economic Research Institute at the end of June, the proportion of biopharmaceuticals among the top 100 global sales increased from 39% in 2012 to 53% in 2019. . The influence of biopharmaceuticals exceeds that of chemical drugs, and by 2026, the proportion of biopharmaceuticals is expected to reach 55%.

Biopharmaceuticals are drugs made using living organisms or biotechnology, and are currently leading the growth of the pharmaceutical market. It is known to be less toxic than chemical drugs, so it has fewer side effects, and it is known for its excellent effect by exerting direct efficacy on target organs.

In particular, there are observations that the success rate of new chemical drugs is low and the efficiency of R&D investment is lowered.

You can also check the latest market trends through the global pharmaceutical sales ranking.

AbbVie’s TNF-α inhibitor ‘Humira’, MSD’s immuno-oncology drug ‘Keytruda’, Ono Pharmaceutical Industries and BMS’ immuno-oncology drug ‘Opdivo’, and Bayer and Regeneron More than half are biopharmaceuticals, including eye disease treatment ‘Eylia’, Roche’s anticancer drug ‘Avastin’, Pfizer’s TNF-α inhibitor ‘Enbrel’, and Pfizer’s pneumococcal vaccine ‘Prevena 13’.

The industry predicts that the biopharmaceutical market will expand faster than it is now. This is because the difficulty of developing a new biopharmaceutical drug has been lowered than in the past due to technological advances and, if successful, it is advantageous to expand the scope of indications because it is easy to expand the indications. In addition, the patent expiry of the first-generation biopharmaceuticals, such as insulin, vaccine, and growth hormone, as well as the second-generation biopharmaceuticals, which are mainly antibody drugs, is leading to the growth of the biosimilar market. This means that food for the future is becoming more and more abundant.

On the other hand, in the case of chemical drugs, the global market itself is showing signs of contraction as the success rate of new drug development is declining and the number of drugs with expired patents is also decreasing. This is also true of the domestic market. This is evidenced by the recent decrease in the number of patent trials, as well as the increasing number of pharmaceutical companies seeking patents targeting domestic IMDs or over-the-counter drugs instead of original products from multinational companies.

Patent Attorney A, who has a lot of experience in representing patents for domestic pharmaceutical companies, said, “The number of original products that are about to expire material patents has decreased significantly. As a result, the number of appeals has been greatly reduced. There are some items whose patents expire after several years, but compared to the past, the absolute number has decreased to an incomparable extent.

A patent attorney added, “Pharmacists are also aware of the importance of biopharmaceuticals.

Biopharmaceutical, representative device industry … Clinical trials are required

The amount of money needed is not enough… Small and medium-sized pharmaceutical companies are ‘the rice cake of the picture’

Biopharmaceuticals are one of the representative device industries. Even if biopharmaceuticals are developed, it is necessary to secure high-level production facilities in order to produce them. However, the cost of constructing this production facility is a ‘sky and earth’ difference compared to chemical drugs.

According to the pharmaceutical and securities industry, biopharmaceuticals using microorganisms cost $30 million (KRW 35.715 billion) to build biopharmaceutical production facilities, and biopharmaceuticals using animal cells cost $200 million (KRW 238.1 billion). cost of

Antibody therapy and cell therapy, which have recently been in the spotlight, are all biopharmaceuticals using animal cells. Therefore, to produce such biopharmaceuticals, more than 200 billion won must be invested in factory facilities.

Biopharmaceutical factories have a stricter certification process than chemical drug factories. Because living organisms are used in the production process, it is difficult to maintain the uniformity of the product, and the possibility of deterioration or contamination of the product is high. Even if a factory is built with a large amount of money, high-quality manpower and experience are required to obtain certification and maintain it.

In addition, biopharmaceuticals must undergo clinical trials. The same goes for biosimilars that are similar to the original. The barrier to entry itself is different from that of chemical generics, which can be approved only by bioequivalence (bioequivalence) testing that compares the original product with the blood drug concentration. For this reason, the development cost is more than 10 times higher than that of chemical drugs.

This is why domestic pharmaceutical companies cannot easily enter the biopharmaceutical market. In Korea, only bio-specialized companies such as Celltrion and Samsung Biologics and some top pharmaceutical companies such as Hanmi Pharm have large-scale biopharmaceutical production plants.

In addition, top pharmaceutical companies and mid-sized pharmaceutical companies with sufficient funds are aiming to develop biopharmaceuticals and export their technologies. However, for small and medium-sized pharmaceutical companies that lack funds, manpower, and experience, the biopharmaceutical market is simply a ‘rice cake’.

Some small and medium-sized pharmaceutical companies have turned their business direction toward bio-ventures, or they have squeezed funds to develop new drugs with the goal of exporting technology like mid-sized pharmaceutical companies. However, many small and medium-sized pharmaceutical companies are still complacent with the current situation or are struggling at the crossroads of choice. It is pointed out that if we delay time like this, we can become a simple ‘medicine dealer’ that only sells ‘old medicine’.

An official from a domestic pharmaceutical company said, “It is not easy for pharmaceutical companies, sensitive to the 100 to 200 million won required for bioequivalence testing, to enter the biopharmaceutical business, which requires hundreds of billions of won for plant construction alone and tens of billions for clinical trials. Except for similar products, there are still few successful (original) biopharmaceutical development and commercialization cases. As it is difficult to predict the success of the business, they tend to be more passive (entering the biopharmaceutical business).”

The official said, “The situation for small and medium-sized pharmaceutical companies is even more difficult.” “The development of chemical drugs, especially generics, is becoming increasingly difficult. At this rate, we cannot rule out the possibility that it will remain as a seller of ‘old drugs’ such as aspirin.”

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