The Korea Food and Drug Administration (KFDA) requires that all medical devices sold in Korea receive approval prior to market entry. In the past, if the foreign manufacturer was exporting to Korea, KFDA regulations stipulated that a local distributor, not the foreign exporting manufacturer, register the medical device and become the legal holder of the device’s approved registration. Thus, many US companies exporting medical devices to Korea use only one Korean distributor in order to streamline distribution practices and lessen costs. Unfortunately, the costs and aggravation to change a poorly performing distributor are very high. On the other hand, if a medical company has their own branch or subsidiary office in Korea, it can register its own products directly.
There are now, however, two alternate approaches that are sometimes used to circumvent the one distributor system. The first approach, in which each Korean distributor holds a separate approval for the same device, involves the Korean distributors individually undergoing the registration process at full cost. This method can become expensive for some devices because the same KFDA tests and reviews will be repeated (at a cost of US$500 – US$15,000) for each registration application. To assuage the price and evade unnecessary tests, regulations that were put into effect on September 22, 2000 permit the second or later distributors to acquire registration approval contingent on the first distributor’s approval. To take advantage of this option, the later distributors must submit a copy of the first distributor’s original registration documents.
The second approach is a type of registration-sharing scheme in which a primary distributor or independent consultant holds product approval, and the other distributors share this registration. Under this system, when one distribution firm has registered the product, other distributors can then import the product based on this approval, providing that they receive written permission from the registered firm. This approach works best if the distributors have a non-competitive relationship; for example, each distributor works in a different region of the country. If the distributors are in competition with each other, an independent consultant that is hired and managed by the foreign manufacturer can be used. In this case, one consultant holds the registration and all the distributors have equal rights to import the product using the consultant’s registration. This arrangement is advantageous because it allows the foreign manufacturer more direct control over product distribution (the company has chosen its own consultant), and the flexibility to change distributors without incurring high costs.