Build Bio-Health Industry into a Future Growth Engine
through Expansion of Exports

- Announcement of 「Strategies to Boost Bio-health Industry Exports」
at the Emergency Ministerial Meeting on Economic Affairs-

□ On Friday, March 24, the Ministry of Health and Welfare (Minister Cho, KyooHong), together with other related ministries, announced the “Strategies to Boost Bio-health Industry Exports” at the Emergency Ministerial Meeting on Economic Affairs and Meeting on Export and Investment Promotion.

○ The announcement was made as a follow-up to the “4th Export Strategy Conference”*and “Strategies to Create New Bio-Health Markets”** that were released in February.

* “A pan-governmental export drive program will be implemented” (President Yoon Suk Yeol at the 4th Export Strategy Meeting on Feb. 23, 2023)

** “Bio-health industry will be fostered into a core strategic industry of Korea” (President Yoon Suk Yeol on Feb. 28, 2023)

○ Strategies to boost bio-health exports for 2023 have been planned based on an in-depth analysis of pre- and post-pandemic exports of medicines and medical devices, and cosmetics.

□ Bio-health industry has achieved a relatively higher export growth rate of 13.2% than other industries* in the recent five years form 2018 to 2022.

* Average annual export growth rates of major industries (2018~2022): Bio-health (13.2%), semiconductor (0.5%), automobiles (7.2%), steel products (3.1%)

- Bio-health exports: USD 15.5 billion (10th) in 2019 → USD 21.5 billion (7th) in 2020 → USD 25.4 billion (7th) in 2021 → USD 24.2 billion (7th) in 2022

○ Particularly, the industry’s exports grew 28.2% during the peak of the COVID-19 pandemic from 2019 to 2021, led by increased exports of in-vitro diagnostic medical devices, thus establishing itself as a major export industry.

□ As the pandemic recedes, however, extraordinary demand for in-vitro diagnostic medical devices and disinfectants is quickly falling amid sluggish global economic growth rate and regulatory* tightening in countries around the world, causing export conditions to deteriorate. Given that, proactive support measures need to be taken on a government level to keep the industry’s growth momentum.

* (US) The National Biotechnology and Biomanufacturing Initiative (NBBI, Sept. 2022)

(Europe) Licensing & approval criteria for medical devices have become stricter(MDR, implemented in May 2021. The application can be postponed until the end of 2028, depending on grade.)

(China) Regulations on obligatory submission of the safety evaluation results for cosmetics ingredients will be tightened in phase (2022~2024).

□ With these changes, the government has worked out a set of strategies to ensure Korea maintains its growth momentum in medicines and medical devices, and cosmetics, industries where Korea has a competitive edge over other countries as well as to expand the export base by entering into new markets.

○ For medicines, specific action plans have been made to increase the production capacity, develop innovative new drugs, and develop new export channels for Korea’s globally competitive bio-pharmaceuticals to seize global market share.

* Two biosimilars gained the largest market share in Europe in 2022. Second in the U.S. (9 out of 39). Phase III global clinical trial has been completed for 3 products with the expired patent (3 domestic companies), and the manufacturers are working on getting approvals in the U.S. and Europe.

○ For medical devices industry that underwent a quantum jump* due to a sharp increase** in exports of in-vitro diagnostic medical devices during the COVID-19 peak, efforts were focused on maintain the industry’s growth momentum for in-vitro diagnostic medical devices, thus creating new export channels for the existing export-leading products including ultrasonic scanning apparatus and implants, and supporting the development of new markets in the field of innovative medical devices.

* Total exports (USD billion): 3.48 in 2017 → 3.83 in 2018 → 3.88 in 2019 → 7.03 in 2020 → 9.22 in 2021

** Exports of in-vitro diagnostic medical devices (USD billion) 0.43 in 2018→ USD 0.27 in 2019 → USD 3.6 in 2020→ USD 4.76 in 2021→ USD 3.28 in 2022

○ For cosmetics leading bio-health exports with its own exports ranked 3rd in the world*, focus of the strategies was on coping with tightening regulation** in China, our largest export market, and capitalizing on the Korean Wave in ASEAN & the Middle East to diversify export markets.

* (2017~2019) Ranked 4th in the world, 2020∼2021) 3rd in the world

** Submission of safety evaluation data: potentially hazardous ingredients and new ingredients (∼2021)→ all ingredients (2022∼)