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Regulatory shackles make Korean bio firms head overseas

Posted February. 05, 2016 09:10,   

Updated February. 05, 2016 09:14

한국어

GeneOne Life Science Inc., a South Korean vaccine maker, is collaborating with U.S. biotech company Inovio Pharmaceuticals to develop a DNA-based vaccine for preventing and treating the emerging and virulent Zika virus infection, taking necessary steps for U.S. approval for clinical tests. On the surface, the Korean company says that the joint development would give it direct access to the global market. However, another reason is because of South Korea's bureaucratic red tapes. The United States gives fast-track benefits for innovative new drugs.

The U.S. Food and Drug Administration (FDA) and the Korea Food & Drug Administration both require new drug developers to go through a similar approval process. Despite the similar procedure, the regulatory intensity felt by developers is totally different during the processes of tests and approval. The U.S. FDA has various instruments for drastically reducing the time length required before a new drug is put on sale, while the Korean agency makes it a habit of procrastinating approval under the excuse of discreet administration.

Deputy Prime Minister Yoo Il-ho, who is also the finance minister, said at a meeting with local bio industry officials that the bio health industry is the country's future growth engine. The reality, however, is empty. In November 2014, Japan revised law to allow developers of stem cell and genetic treatment drugs to sell them without having to completely proving their effectiveness unless they cause side effects in the human body. As a result, global biotech companies such as Britain's ReNeuron and Israel's Pluristem are developing new drugs in Japan. U.S. Congress also passed the "21st Century Cures Act" that reduced the approval period for new cures. The Korea Food & Drug Administration said last month that it would allow drugs whose safety and effectiveness had been significantly improved to be eligible for fast-track approval. However, the promise was only in words.

The fact that South Korean biotech companies are going to the U.S. or Japan symbolizes the reality of the Korean-style regulation. Although the government touts its "regulatory free zones" as the brand for the administration's deregulation drive, there remains the hurdle of enacting a special law that has to be passed by the National Assembly. At a time of global economic war, in which China's state-owned China National Chemical Corporation, known as ChemChina, purchased Swiss pesticide and seeds maker Syngenta AG and information-technology giants such as Google and Apple are plunging into the smart-car business, how much longer will South Korea leave the regulatory shackles unchanged?