"Gov't actively supports the development of new drugs"

"Demonstrated by Phase 3 specialized fund and fail-proof research"

Plans to support new drugs of pharma·biotech companies by establishing a total fund of KRW 150 billion, including the MOHW budget of KRW 60 billion

For the 'Loan System for New Drugs Based on Success,' the final list of recipient companies will be selected once a specific implementation model is established

Ministry of Health and Welfare (MOHW)

The Ministry of Health and Welfare (MOHW) explained that its establishment of a first-ever 'Phase 3 Specialized Fund' as one of its budget projects for next year is the result of government's commitment to creating innovative new drugs in Korea.

 

The MOHW also announced that it would first design a specific business model for the 'Loan System for New Drugs Based on Success' by next year through a research project, and then begin selecting pharmaceutical and bio companies to receive benefits from 2027.

 

A MOHW official, in a recent meeting with the Korea Special Press Association, explained, "The establishment of a specialized fund by the government to support pharmaceutical companies with the will and capability to develop new drugs in Phase 3 is the first of its kind, and it holds significant meaning." The MOHW has allocated KRW 60 billion in new costs for the establishment of the Phase 3 specialized fund next year.

 

The goal is to establish a total fund of KRW 150 billion by combining the MOHW's contribution and investment from a fund of funds.

 

This fund will then be used to select and support pharmaceutical and bio companies that have innovative new drug and Bio-Better pipelines and the intention to pursue Phase 3 clinical trials.

 

Once the fund is established, the MOHW will not be directly involved in the selection of pharmaceutical companies or new drug candidates, entrusting that responsibility to investment firms.

 

The MOHW also allocated KRW 500 million for a research service budget to design a Korea model for the 'Loan System for New Drugs Based on Success.' Given that it is rare to invest such a large amount, such as millions of KRW, into a research budget, it demonstrates a strong will to design a proper loan model for Korea.

 

The Loan System is a policy that exempts or partially reduces the loan repayment responsibility for pharmaceutical companies that receive government investment and support for new drug development, even if the new drug ultimately fails to be created.

 

If next year's budget is approved by the National Assembly, the MOHW plans to do its utmost to ensure that domestically developed new drug and bio companies can receive tangible benefits.

 

A MOHW official said, "The Phase 3 specialized fund requires consultation with policy banks and other institutions.

 

It's difficult to proceed with just government contributions, so we need to raise external investment." He stressed that, "While a KRW 150 billion fund may not be large when you consider the costs required for Phase 3, the fact that this is the first time the government is establishing a specialized fund to provide customized support for Phase 3 clinical trials is what makes it meaningful." The official added, "This is a demonstration of the government's strong will to discover new drugs." He continued, "The fact that this is the first time we are providing such support is impressive, and if the project is successful, we can increase its size, which makes it a crucial budget." And added, "For the Loan System, we will only be conducting research next year.

 

We've allocated KRW 500 million, which is a significant amount for a research budget." He added, "We will design a specific implementation plan and a practical loan model for new drugs.

 

After completing the research next year, we plan to reflect the actual project support budget in the 2027 budget plan." Finally, He said, "The Loan System requires collecting many opinions from the pharmaceutical and biotech industry during the research process," and added, "We need to discuss details, including pharmaceutical companies willing to support, the number of new drugs, and the criteria for success.

 

We decided that we need such a system to encourage challenging investments in new drug development, which has a high probability of failure, and the Ministry of Economy and Finance agreed to include it in the budget plan."