Dispute Erupts Between U.S. and Korea over Drug Pricing Policies

A claim by the leading U.S. pharmaceutical industry lobby that South Korea unfairly favors its own drug manufacturers over foreign firms is receiving strong pushback by the Korean government.

Earlier this year, Pharmaceutical Research and Manufacturers of America (PhRMA) argued to the U.S. Trade Representative that South Korea’s pricing policies and intellectual property laws favor the nation’s own pharmaceutical industry at the expense of U.S. companies. Such favoritism would violate the 2012 bilateral trade agreement between South Korea and the U.S.

But South Korea’s Ministry of Health and Welfare refutes the claim. It says that pricing and reimbursement policies in the country do not discriminate between domestic and foreign pharmaceutical companies.

Korea has emerged as a leading pharmaceutical market and global hub in Asia over the last two decades. With a population of 50 million, Korea is the third largest pharmaceutical market in the Asia-Pacific region. Multinational corporations are heavily engaged with the export and development of pharmaceutical products in Korea. Major players include Boehringer Ingelheim, Bayer, Johnson & Johnson, Sanofi-Pasteur, Roche, GlaxoSmithKline, Pfizer, and Bayer.