"Generic Drug Price Cuts Undermine Industry Foundation"... Pharmaceutical Sector Urges Reassessment

Pharmaceutical Industry Voices Opposition to Unilateral Drug Pricing Reforms at New Year Meeting
Ministry of Health and Welfare Highlights Support, Including Creation of 150 Billion Won Phase 3 Clinical Trial Fund

The pharmaceutical and bio-pharma industries have once again expressed their opposition to the government's proposed improvements to the drug pricing system. They strongly argued for a reassessment, warning that excessive price reduction policies for generic drugs, which are supplied to the public at affordable prices, could undermine the industry's foundation.

Noh Yeonhong, Chairman of the Korea Pharmaceutical and Bio-Pharma Manufacturers Association, is pointing out the problems of the generic drug price reduction policy at the "2026 Pharmaceutical Industry New Year Greeting" held at the Korea Pharmaceutical and Bio-Pharma Manufacturers Association Hall in Seocho-gu, Seoul on the 7th. Photo by Choi Taewon

Noh Yeonhong, Chairman of the Korea Pharmaceutical and Bio-Pharma Manufacturers Association, stated in his welcoming remarks at the "2026 Pharmaceutical Industry New Year Greeting" held at the association's hall in Seocho-gu, Seoul on January 7, that "Instead of unilaterally pushing forward with a schedule set by the government regarding the overhaul of the drug pricing system, which could shake the foundations of the domestic pharmaceutical and bio-pharma industry, it should be redesigned in consultation with the industry on the ground."

Chairman Noh further emphasized, "Only if the policy direction is restructured to balance the growth of the national health industry and drug pricing finances can pharmaceuticals fulfill their role as a robust social safety net."

The Korean Pharmaceutical Association also strongly called for institutional improvements that reflect on-the-ground realities. Kwon Younghee, President of the Korean Pharmaceutical Association, pointed out, "Large-scale drug price reductions are causing confusion for pharmacies, distributors, and pharmaceutical companies alike," and stressed, "At the very least, supplementary measures that reflect the realities of the field are urgently needed to ensure the smooth operation of the inventory claim settlement system."

Choi Sujin, a member of the People Power Party with a background in the pharmaceutical industry, criticized, "It is questionable why the government is pursuing a policy linking drug usage volumes to prices," and added, "Affordable generics are the drugs that can be provided to the public without financial burden. Demanding a price reduction for a drug that costs 100 won is essentially telling manufacturers not to produce it."

Assemblywoman Choi continued, "Reducing drug prices just because they sell in high volumes is merely a matter of numbers and finances; it does not ultimately alleviate the burden on the public. If the industry cannot develop while easing the public's burden and strengthening fiscal soundness, the domestic pharmaceutical and bio-pharma industry will shrink. It is time to establish a structure that allows for fair compensation for high-quality medicines."

On the other hand, Kim Yoon, a member of the Democratic Party, said that the drug price reduction is part of a policy to build an innovative ecosystem for the pharmaceutical industry, and stated that he would discuss the concerns raised by the industry in detail. Assemblyman Kim commented, "The drug price reduction system is not simply about cutting costs. Please understand it as a policy to foster an innovative ecosystem in the pharmaceutical industry."

Lee Hyunghoon, Second Vice Minister of Health and Welfare, presented a concrete blueprint for fostering the industry and expressed the government's commitment to supporting it in his congratulatory remarks. Starting this year, the Ministry of Health and Welfare will establish a dedicated organization for the pharmaceutical and bio-pharma sector, create a new "Phase 3 Clinical Trial Composite Fund" worth 150 billion won, and launch a "Mega Project" to help domestic new drug pipelines advance globally by utilizing the "National Growth Fund."

Vice Minister Lee stated, "We will pursue improvements to the drug pricing system to reward innovation and ensure the stable supply of essential medicines," adding, "The government will establish a sound distribution order for pharmaceuticals and provide tangible support so that the pharmaceutical and bio-pharma industry can develop into an innovation-driven ecosystem."

Previously, on December 22, the pharmaceutical industry defined the government's drug pricing reform plan as a "declaration of abandoning the industry" and urged a complete reconsideration, warning that its implementation would devastate the sector. The industry fears that the reform will result in annual losses amounting to trillions of won, leading to a contraction in research and development (R&D) investment.