The Korean biopharmaceutical industry is growing steadily amidst internal and external challenges such as the overall contraction of the national economy and the high exchange rate. In 2023, the domestic pharmaceutical market grew by 5.3% year-on-year to reach USD 23 billion. Over the past five years, the bio industry grew at an average annual growth rate of 8.2%, which is more than double the growth rate of the country's GDP (3.8%) over the same period. Although the current market size is only 1.5% of the global market, ranking 13th in the world, the potential for global growth is much higher than the numbers suggest.

Korea’s pharmaceutical exports reached USD 7.54 billion, up 29% year-on-year. Biopharmaceutical exports grew significantly by growing the fastest since the COVID-19 pandemic. The top pharmaceutical export destination is the United States with USD 1.36 billion, followed by Hungary, Germany, Switzerland, Turkey, Belgium, Japan, Italy, Brazil, and the Netherlands. Pharmaceutical imports totaled USD 8.99 billion, with the United States accounting for the largest share of USD 1.13 billion. The top ten countries that exported pharmaceuticals to Korea include Germany, China, Switzerland, Ireland, Japan, the United Kingdom, France, the Netherlands, and India. The overall pharmaceutical trade balance shows a deficit of USD 1.45 billion, with imports exceeding exports.

Korean biopharmaceutical companies are accelerating efforts to expand their global reach by exporting technology as well as drugs. By exporting technology, such as exporting preclinical drug candidates that require large amounts of funding, they are trying to secure royalties and other fees to bring new drugs to market more quickly. The country’s technology exports have been on a steady rise since the mid-2010s and are expected to reach USD 7.1 billion in 2023. As for Yuhan Corporation leading sales among traditional pharmaceutical companies, the company made a significant achievement with its anti-cancer drug Leclaza, which had been exported to Johnson & Johnson's subsidiary Janssen in 2021, approved by the FDA in August 2024. The technologies being traded are also diversifying, including immunotherapy drugs, ADC-based anticancer drugs, SC formulation technology, and dementia drugs. Particularly noteworthy in recent technology exports are emergence of bio ventures such as RichemBio, Alteogen, and Orum Therapeutics armed with platform technologies in new drug modalities. Tapping into the strengths of their differentiated platform technologies, these companies are further exporting technologies to other global pharmaceutical giants. LigaChemBio has signed a total of twenty pipeline export contracts for six consecutive years, including a technology export contract worth USD 700 million with Japan's Ono Pharmaceutical in 2024, while Orum Therapeutics also signed a contract worth USD 945 million with US-based Vertex Pharmaceuticals.

The number of domestically developed new drugs increased from 30 in 2019 to 38 in 2024, with pharma and biotech companies competitively investing in R&D. Among the domestically developed new drugs, anti-cancer drugs accounted for the biggest share with seven drugs, followed by drugs for GERD, drugs for diabetes, antibacterial drugs, antibiotics, drugs for arthritis, drugs for malaria, and radiopharmaceuticals. These new drugs are also actively entering developed markets such as the United Sates and the European Union. The FDA has approved a total of 34 Korean drugs as of 2024, following the first approval in 2003. The European Medicines Agency (EMA) has approved a total of 25 Korean drug products since 2006.

The competitiveness of the Korean biopharmaceutical industry is also evident in clinical trials. Despite the overall decline in the number of global clinical trials following the COVID-19 pandemic, Korea increased its share of clinical trials again in 2023. The country ranked fourth globally for pharmaceutical trials, its highest ranking ever, while Seoul, with a high concentration of top hospitals, reaffirmed its position as Asia's clinical trial leader by holding the top spot for seven years since 2017. Korea also ranked tenth in multi-national trials, the only Asian country to make the list, and ranked third globally in single-country trials for the fifth consecutive year since 2019, confirming its position as a clinical trial leader after the United States and China.

Korea is also recognized for its strength in the contract development and manufacturing organization (CDMO) market, which is growing rapidly alongside the surging global demand for biopharmaceuticals. Samsung Biologics has seventeen of the top twenty global pharmaceutical companies by market capitalization as customers and has won accumulated orders worth KRW 26 trillion. Samsung Biologics is currently building five 180,000-liter plants at the Songdo Bio Campus II in Incheon, targeting a total capacity of 784,000 liters upon completion. Celltrion, after achieving remarkable results in the biosimilar market, has also established a subsidiary specializing in CDMOs, with its facilities expansion and operation in full swing. SK Bioscience joined the race in 2024 by acquiring a 60% stake in IDT Biologika, a German company that ranks among the top ten global vaccine CDMOs. Lotte Biologics is also in the thick of the CDMO competition, building three production plants in Songdo following its acquisition of a biopharmaceutical manufacturing plant from BMS in the US.

The Korean biopharmaceutical industry has gained public trust and expectations as a pillar of the nation’s health security and the future of the national economy, after helping the nation effectively overcome the coronavirus pandemic with a stable supply of medicines. The industry is expected to continue growing steadily given the competitiveness of biopharmaceutical companies and the government's full support. Obviously, there are both risks and opportunities, such as Washington’s strong drive to protect its industries, including the imposition of tariffs exceeding 25% on pharmaceuticals under the second Trump administration, the reorganization of the global supply chain, and the expiration of patents for blockbuster drugs.

The Korean biopharmaceutical industry's talented workforce and heavy investments in R&D are leading to a rapid expansion of the pipeline of new drugs, further raising expectations. The domestic drug R&D pipeline is expected to reach 3,233 in 2024, up from 1,477 in 2020. This is about 14% of the global pipeline, the third largest in the world after the US and China. This achievement is driving a virtuous cycle in the industry ecosystem that encourages the industry to actively invest in R&D even amid economic uncertainty. In 2023, R&D investment by listed biopharmaceutical companies is expected to increase by more than 7% year-on-year, reaching KRW 4.712 trillion, or 13% of revenue. They are expected to continue their aggressive investment under the slogan “no R&D investment, no global success.”

In an effort to overcome the small domestic market and limitations of company size, the country’s biopharmaceutical leaders are focusing on open innovation strategies such as joint research and development, as well as tapping into AI and big data to accelerate new drug development. In line with the full-scale competition for AI drug development, joint development and collaboration are expected to increase, and biotech and IT companies are expected to work more aggressively on developing innovative new drugs based on strategies such as open innovation. In particular, competition to develop new drugs and secure technologies using new modalities such as ADC, mRNA, and CAR-T is expected to intensify, especially among biotech companies.

In line with the recent global competition for developing obesity medications, Korean companies such as Hanmi Pharmaceutical, Ildong Pharmaceutical, Dongkuk Pharmaceutical, and Progen are set to join the race. Among them, interim results of Phase I clinical trials of obesity treatments by some companies, such as Hanmi Pharmaceutical, are expected to be released in 2025. In addition, the market is expected to see active portfolio diversification and M&As to cope with the patent expiration of blockbuster drugs and the EU's attempts to shorten the patent protection period for new drugs, which will present great opportunities for domestic companies with a differentiated competitive edge.

Public-private collaboration, in which the industry takes the initiative in R&D and global expansion while the government supports in various ways, is a key factor for the success of K-Pharma and the creation of a virtuous cycle in the industrial ecosystem. Under the goal of joining the top six global biopharmaceutical powerhouses by fostering the industry and increasing investment, the Korean government released the 3rd Five-Year Master Plan for Fostering and Supporting the Biopharmaceutical Industry in March 2023 and is announcing action plans annually. The government supports technical cooperation between Korean bio ventures and global pharmaceutical companies, and is actively working to attract overseas open innovation platforms to Korea while promoting joint research conducted with the infrastructure of research-oriented hospitals. Committed to refining regulations on drug approval and clinical trials, the Ministry of Food and Drug Safety (MFDS) is also strengthening all-round support for global expansion by being recognized again as a member of the Pharmaceutical Inspection Co-operation Scheme (PIC/S), becoming a full member of the International Council on Harmonisation, and joining the WHO-listed authorities (WLA) for the first time. In addition, Korean biopharmaceutical companies are finding more opportunities to go global, supported by a public-private council boosting drug exports and the government’s closer cooperation with foreign drug regulatory authorities.

In 2023, the government designated the bio sector as a national high-tech strategic industry, in addition to the three existing industries (i.e., semiconductor, display, and secondary battery). In June 2024, the government designated five bio clusters in Siheung and Songdo in Gyeonggi-do, Yuseong in Daejeon, Chuncheon and Hongcheon in Gangwon-do, Hwasun in Jeollanam-do, and Andong and Pohang in Gyeongsandbuk-do, where companies can enjoy expedited licensing, tax benefits and subsidies, and be exempt from various regulations. Built as the world’s No. 1 bio mega cluster, the Siheung Songdo Cluster is established to serve as a global hub that will have the world’s biggest production base enjoying an insurmountable gap. The Daejeon Yuseong Cluster will be built as an open innovation center for R&D of innovative new drugs, and global pharmaceutical giant Merch announced plans in 2023 to build a plant to produce biopharmaceutical raw materials in an area of about 43,000 square meters.

The industry is also welcoming the establishment of a governance system to oversee and coordinate policies supporting the biopharmaceutical industry, which have been scattered among ministries. The Biohealth Innovation Committee, chaired by the prime minister, has been in operation since December 2023 and is following through action plans to achieve specific goals such as collecting and sharing bio research big data of one million people and training 110,000 key biohealth specialists. In addition, the National Bio Committee was established in January 2025 to bring together the public and private capacities across the bio sector, including healthcare, food, resources, and energy. The committee is coordinating cooperation among ministries under the goals of raising a KRW 1 trillion public-private fund and leading the world in CDMO production and sales. In particular, for regulatory innovation in the bio sector, the National Bio Committee will work with the Regulatory Reform Committee and the Biohealth Innovation Committee to reorganize the entire cycle of regulations and support the market entry of innovative technologies such as generative AI.

The Korea Pharmaceutical and Bio-pharma Association, which has served as an organization representing the Korean biopharmaceutical industry since its establishment in 1945, is also pursuing various projects to strengthen the competitiveness of biopharmaceutical companies and facilitate public-private cooperation. Through the Korea Innovative Medicines Consortium (KIMCo), the first consortium established by the Korean biopharmaceutical companies as a joint venture of 59 member companies, the association is promoting industry innovation and supporting the formation of bio and healthcare venture capitals. The association also operates the Convergence AI Institute for Drug Discovery (CAIID) to lead the country’s AI drug development and digital innovation, and serves as a hub for jointly planning and conducting AI-enabled research that is difficult for individual companies or institutions to pursue. In addition, it has been designated by the government as the host institution of the federated learning-based new drug development acceleration project (Korea Machine Learning Ledger Orchestration for Drug Discovery, K-MELLODDY). The project is aimed at building an innovative platform that can be jointly utilized while maintaining the security of sensitive healthcare-related data held by each institution such as companies, hospitals, research institutes, and universities. In addition, KPBMA introduced a comprehensive and specialized online technology trading platform (K-SPACE) for the Korean biopharmaceutical industry and regularly holds technology exchange events, contributing to the creation of an open innovation ecosystem by facilitating technology transactions between pharmaceutical companies and bio ventures. The association is also working to strengthen K-Pharma's global competitiveness by strengthening the network for overseas market expansion and building supporting systems, such as dispatching in 2024 a public-private delegation jointly with KOTRA and the Ministry of Food and Drug Safety in an effort to seek business opportunities in the Indonesian market.