Competition in the domestic infusion solution market is intensifying. While JW Pharmaceutical, a 'traditional powerhouse,' maintains its number one market share in Korea, the 'rising star' HK inno.N is making efforts to catch up through large-scale investments.
According to industry sources and the Financial Supervisory Service's electronic disclosure system on the 16th, the sales of infusion solution product lines (general, nutritional, special) for the first quarter of this year increased compared to the same period last year among three domestic infusion solution manufacturers. JW Pharmaceutical recorded sales of 60 billion KRW, growing 7.6% year-on-year. Daehan Pharmaceutical posted sales of 34.9 billion KRW, up 9.4% from the same period last year. HK inno.N achieved sales of 25.3 billion KRW, marking a 10.5% growth compared to the first quarter of last year, the highest growth rate among the three.
On an annual basis, sales of infusion solutions have steadily increased. Comparing last year's sales with those of 2021, JW Pharmaceutical showed double-digit growth with a 12.8% increase. During the same period, HK inno.N also recorded a 9.2% increase, and Daehan Pharmaceutical grew by 7.4%.
Based on sales in the first half of last year, the domestic infusion solution market is divided with JW Pharmaceutical holding about 49%, Daehan Pharmaceutical 31%, and HK inno.N approximately 20%. JW Pharmaceutical and HK inno.N have recently increased competition by investing in expanding infusion solution production capacity. JW Pharmaceutical has been focusing on the infusion business since the 1970s when Honorary Chairman Lee Jong-ho, who passed away on the 30th of last month, led the company. JW Group's infusion business operates with its affiliate JW Life Science producing infusion solutions and JW Pharmaceutical marketing them domestically and internationally. In October last year, JW Life Science expanded and began production of a new production line 3 for total parenteral nutrition (TPN) at its Dangjin infusion plant. This increased JW Life Science's maximum production capacity for TPN by 37%. The annual maximum production capacity of the entire Dangjin plant also rose to 180 million units.
HK inno.N has also increased investments in production facilities and declared its intention to become the number one player in the domestic infusion solution market by 2024. HK inno.N started operations at its new infusion plant in Osong, Chungbuk, in June last year. The Osong plant's annual production capacity is about 55 million units, and combined with the existing Chungbuk Daeso plant's 50 million units, the total reaches 105 million units.
Infusion solutions are basic and essential medicines, so demand continues to rise steadily. Infusion solutions are broadly categorized into basic, nutritional, and special solutions. Basic solutions replenish essential components such as electrolytes, water, and sugars necessary for the human body. Nutritional solutions additionally supply proteins and fats. Special solutions are used in special situations such as emergency surgeries or patients with cerebral hemorrhage.
Most basic infusion solutions produced by these companies have been designated as non-substitutable drugs by health authorities. The non-substitutable drug system is designed to compensate costs to prevent essential medicines that are economically unviable from disappearing from the market. Since the price per infusion solution unit is only around 1,000 KRW, profitability is known to be low. However, the government prevents production below cost through this system, guaranteeing a certain level of profit, and since basic infusion solutions are essential medicines, demand remains steady, ensuring stable sales. The industry also expects demand for nutritional solutions to increase as COVID-19 becomes endemic, leading to more visits to hospitals and clinics.
Industry insiders predict that the growth of the infusion solution market will accelerate this year as the COVID-19 crisis alert level is downgraded and the endemic phase progresses. An industry official explained, "As the COVID-19 outbreak subsides, hospital visits have increased, leading to higher sales related to infusion solutions," adding, "Since most quarantine measures will be lifted from next month, we expect infusion solution demand to rise further."
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