SEOUL - Ahead of the July 2011 launch of Korea-EU free trade agreement, which local observers fear could damage the local healthcare sector, the Korean government is hammering out a set of measures to help the country's medical equipment industry.

After a round of recent discussions between healthcare-related bodies such as Korea FDA, the Ministry of Health and Welfare and the Ministry of Knowledge Economy, the government plans to invest a total of KRW 500 billion ($442 million) over the next five years to boost the country's medical equipment industry to become the world's 10th-largest medical equipment manufacturer.

Gang Ho-Sang, a deputy director at the Ministry of Knowledge Economy's Electronics and Information Industries Division said the state funds will be invested in research and development, personnel training and laboratory construction. Gang noted that South Korea currently ranks 22nd in production and export of medical equipment - largely middle-end machines such as X-rays and ultrasound scanners.

"Knowing the fact that 60 percent of global healthcare market is controlled by such big names as GE, Siemens and Philips, we are pushing to move into a new market such as U-health care [ubiquitous health care], helping people to receive medical services regardless of location and time," Gang told PharmAsia News. A growing trend and buzz word in South Korea, ubiquitous health care is a combination of health care, plus IT and mobile networks. Gang added that ministry is also trying to spur Korean growth in niche markets such as IT fusion device and compact medical device manufacturing.

Call For GMP On Medical Devices

Under the government's plans, South Korea will call for good manufacture practice on foreign firms producing medical devices sold in Korea, Gang said.

"Because of the lack of skilled manpower with specialty on GMP, we haven't done that so far, but we will call gradually for GMP after 2011," he said.

The government is also actively trying to strengthen the public image of Korea's device firms through seminars in and outside Korea. In addition, the government plans to launch the "Fast Track R&D Program," designed to help small- and mid-sized companies speed up their R&D projects. Although Korean companies have started to make headway into magnetic resonance imaging and computerized axial tomography scanners, they are seen far behind those of the global giants.

If all goes as scheduled with the government plans, South Korea's production of medical equipment could reach KRW 5 trillion ($4.32 billion) by 2015 with exports hovering at $2.5 billion, the ministry said. In 2009, domestic production reached KRW 2.8 trillion ($2.42 billion) and exports hit $1.2 billion.

U.S. And European Sales

Along with X-rays and ultrasound scanners, South Korea's major items sold in the U.S. and Europe include simple and cheap heated massage tools for the treatment of muscle pain.

Noting that the Korean government will focus on supporting small and medium enterprises, which account for most of the country's production now, Gang said the Korean government welcomes the entry of South Korea's large conglomerates into the medical equipment business.

After disclosing its ambitions for the biosimilar market, electronics giant Samsung Electronics is now bidding to take over diagnostic ultrasound firm Medison Co., South Korea's leading medical equipment manufacturer (Also see "Korea's Samsung Electronics Hopes To Expand Healthcare Footprint By Taking Over Device Firm" - Scrip, 21 October, 2010.).

Gang viewed Samsung's entry into the medical equipment market as a positive development. Korean conglomerates like Samsung have the financial strength to escalate quickly their medical equipment presence.

Already, the ministry has set the stage for Samsung Electronics to be a major player in the biosmilar market, helping to finance a Samsung-led consortium to bring biosimilars to market (Also see "Korea Moves To Help Samsung Electronics Create Consortium in Biosimilars" - Scrip, 14 July, 2009.).

Along with the medical equipment industry, generic-dependent Korean drug makers are seen as one of the biggest victims of the Korea-EU FTA, waiting for parliamentary approval before taking effect in July next year, and the Korea-U.S. FTA, which hit a snag in a recent attempt to finalize the agreement (Also see "Delay In Approval Of U.S.-Korea Free Trade Agreement Could Give EU Companies Advantage Over U.S. Counterparts" - Scrip, 15 November, 2010.).

- Peter Chang (p.chang@elsevier.com)

South Korea To Strengthen Medical Equipment Sector

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