Proposition - PharmXpert Academy

288 2007 Korea Pharmaceutical Industry Directory
C h a p t e r 2 .
P h a r m a c e u t i c a l I n d u s t r y
S t a t u s
1. Characteristics of the Pharmaceutical Industry
The pharmaceutical industry is a high-value added industry and a
knowledge-based industry. As the fact that 14 out of the world’s top 500
businesses are pharmaceutical companies demonstrates, it has a bright growth
prospect for the future. Moreover, it is an industry that provides much public good
and external economic benefit because it is directly and very intimately related
with the human life.
Production of pharmaceutical goods is so heavily regulated that it can be set
apart from other industrial goods every part of R&D (GSP), clinical testing (GCP),
authorization & permission (IND, NDA), manufacturing (GMP), and distribution
(GSP) is stringently managed. In case of the new drug development, in particular,
an average of KRW1 trillion is required as the budget for the first 10 years,
between the R&D and the commercialization phases. Furthermore, there is only 1
in 100,000 chance that the product development efforts would bear a meaningful
fruit, and even then the market success cannot be guaranteed. That is why the
pharmaceutical industry is considered as a high-risk, high-return venture
industry. Two of the new blockbuster drugs – Lipitor (Pfizer, USD13.6 billion in
sales revenue in 2006) and Plavix (Sanofi Aventis, USD5.8 billion in sales revenue
in 2006) – held the added value greater than that of the entire pharmaceutical
industry in Korea.