Korea’s Pharmaceutical Industry Embraces India

A solution to falling medicine prices-

Daewoong Pharmaceutical Company will soon be the first Korean pharmaceutical company to set up a laboratory in India, which is a fast-rising bioengineering hub.

Korean pharmaceutical companies are eyeing India, which has the fourth largest pharmaceutical market in the world. The companies are afraid that a free trade agreement between Korea and the U.S. will drive pharmaceutical product prices down.

Many are wondering if India will be the answer to the worries of the Korean pharmaceutical industry.

Daewoong Pharmaceutical Company is preparing for a laboratory in India-

Last year, Daewoong Pharmaceutical Company opened an office in Hyderabad and sent two researchers there to prepare for the launch of a laboratory in India, the Dong-A Ilbo learned on Tuesday.

LG Life Sciences opened a sales subsidiary in New Delhi in 2003, but this is the first time a major Korean pharmaceutical company has opened an office in India and launched a laboratory.

“We are aiming to become a global pharmaceutical company with sales over one trillion won by 2010. This is why we are building research and development facilities in places like India, China, and the U.S.,” said an employee of Daewoong Pharmaceutical Company. “The research facility in India will focus on uncovering new medical substances and developing new technology.”

CJ, which acquired Hanil Pharmaceutical Company last year, is also planning to enter India.

“We are evaluating the option of building a research facility in India, instead of building new production lines or sales subsidiaries,” said an employee of CJ Group.

“India has competitiveness and the labor force to support not only the information technology industry, but also the pharmaceutical industry,” said President Sohn Kyung-sik of CJ Group when he visited a pharmaceutical hub in Hyderabad, India as the president of the Korean Chamber of Commerce and Industry last November.

Indian human resources are coveted-

Korea pharmaceutical companies are interested in India because it possesses excellent human resources and its pharmaceutical market shows great promise. The firms are looking to make India a center for research and development. They also have plans to make it a stepping-stone to entering foreign markets.

The Indian pharmaceutical market ranks 13th in the world, according to India’s Department of Fertilizer. But in terms of growth, it ranks fourth in the world with a growth rate of eight to 10 percent each year, beating the global average of seven percent.

India holds great capability in generic drug production. Some in the Korean pharmaceutical industry even say that it only takes a year for India to churn out generic drugs that are identical to drugs whose patents expired just a year ago.

There is also the matter of the quality labor force in India’s bioengineering industry. There are more than 300 bioengineering colleges in India, and 700,000 students graduate from them every year. It only takes $25,000 to hire a Ph.D.-level researcher.

These days, Korean pharmaceutical companies are competing for the top bio-engineers in India. SK Chemicals is planning to bring up to 10 Ph.D.-level bioengineering researchers to Korea.

“We started interviewing Ph.D.-level engineers in India last year,” said an employee of SK Chemicals. “These researchers will work on developing new pharmaceutical products.”

Choongwae Pharma Corporation also picked one Ph.D.-level researcher from India. The company is planning to enter the Indian market with the help of Indian researchers.

“Research and development costs are low in India. We can also use these researchers to gain access to the Indian market,” said an employee of a pharmaceutical company. “The only drawback is that their expertise in developing new drugs falls behind Americans and Europeans.”

parky@donga.com