Innovative Pharmaceutical Company certification to change

will increase the R&D ratio and disqualification criteria will be score-based

MOHW prepared to issue administrative notice after deliberation by the Pharmaceutical Industry Committee

Will reflect opinions of the domestic pharmaceutical industry...will also review the typification of the certification criteria for multinational companies

The Ministry of Health and Welfare will improve the certification system for innovative pharmaceutical companies to a 'certification evaluation score system' that will increase the proportion of new drug research and development (R&D) and change the disqualification criteria to a point-based score system.

 

The MOHW plans to issue an administrative notice next month after deliberations by the Pharmaceutical Industry Fostering and Support Committee.

 

It will be interesting to see if the final notice will reflect the pharmaceutical industry's opinion that it is too harsh or unreasonable to cancel the certification of innovative pharmaceutical companies that encourage the creation of homegrown drugs and the development of the pharmaceutical industry based on illegal rebates in the past, etc.

 

An MOHW official who requested anonymity made such remarks on the 15th, during a meeting with reporters from the Korea Special Press Association on Friday.

 

While announcing its major work plan for 2025, the MOHW announced it would improve the core regulations for each industry to make the global leap.

 

The improvement measures include overhauling the certification criteria for innovative pharmaceutical companies.

 

The key is to add criteria for granting extra points for items such as a pharmaceutical company's R&D investment efforts and to allocate points for the disqualifying criteria, such as revoking the certification of innovative pharmaceutical companies based on the number of administrative penalties or the amount of illegal rebates.

 

The industry has claimed that despite investing in R&D to create new drugs and its ethical management efforts, the revocation or decertification as an innovative pharmaceutical company due to rebate cases detected in the past dampens the companies’ will to develop new drugs.

 

The current innovative pharmaceutical company certification system excludes innovative pharmaceutical companies based on the illegal rebate disqualification clause if they have received two or more administrative penalties for violating the Pharmaceutical Affairs Act in the past three years, or if the total amount of rebates exceeds KRW 5 million.

 

A MOHW official said, “Under the current system if a company violates the standards, its innovative pharmaceutical company certification is revoked.

 

We plan to introduce quantitative indicators to the disqualification criteria and add a premium for R&D efforts to allow companies to make up for the lost score” The MOHW is also considering the typification of the certification criteria for multinational pharmaceutical companies.

 

The Korean Research-based Pharmaceutical Industry Association (KRPIA) has previously argued that open innovation collaboration with domestic research centers and companies, in addition to conventional clinical research, plays an important role in building global-level R&D capabilities.

 

Therefore, the KRPIA has been requesting standards that can recognize and promote such activities.

 

The MOHW has been preparing measures to reflect this.

 

One of the improvements under consideration is to specify the reasons for rejection when notifying pharmaceutical companies of their innovative pharmaceutical company certification results.

 

On the 10th, the 2nd Vice Minister of MOHW, Minsoo Park, said in a Q&A session on the 2025 Major Work Plan, “The most important criterion for selecting innovative pharmacuetical companies will be the R&D criteria, but we are looking at the specific condition and status of the current industry and trying to adjust the criteria accordingly.” He added, “We are considering expanding various quantitative evaluation criteria, creating customized criteria for each type of pharmaceutical company, and rationally improving the disqualification criteria,” he said.

 

Such improvements must be reviewed by the Pharmaceutical Industry Fostering and Support Committee under the ‘Special Act on Fostering and Support of the Pharmaceutical Industry.’ The MOHW is currently preparing committee deliberations and plans to issue an administrative notice in February.

 

Meanwhile, the benefits of being certified as an innovative pharmaceutical company include: (1) points for participating in government R&D; (2) corporate tax deduction for R&D expenses and tax deduction for investment in facilities to improve drug quality control; (3) When building research facilities, they are exempted from local regulations and levies on location; (4) companies that enter the KOSDAQ under the technology special exception or growth special exception are exempted from KOSDAQ listing requirements; and (5) drug prices are preferentially reduced for generic drugs, incrementally modified new drugs, and biosimilars, and reduce the actual transaction price reduction rate.