CONTENTS
- 1. Pharmaceutical and Biotechnology | Industry
- - Characteristics of the Industry Structure
- - Policy and Market Changes
- 2. Pharmaceutical and Biotechnology | Key Legal and Regulatory Risks
- - Patent Litigation and Issues of Abuse of Intellectual Property Rights
- - Fair Trade Issues Such as Bid Rigging and Abuse of a Market-Dominant Position
- - Regulatory Response Such as Product Approval, GMP, and Clinical Trials
- - Strategy for Drug Pricing, Reimbursement Listing, and Expansion of Reimbursement Standards
- - Investigations by the Ministry of Food and Drug Safety, Public Health Centers, and the Fair Trade Commission, and Imported Food Safety Management
- 3. Pharmaceutical and Biotechnology | Risk Management
- - Advisory and Management Support
1. Pharmaceutical and Biotechnology | Industry
The pharmaceutical and biotechnology sector is a highly technology-intensive industry that covers the research, development, and clinical testing of pharmaceuticals, biopharmaceuticals, health functional foods, and veterinary medicines, along with their manufacture and sale.
Separate rules apply at each stage, including clinical trial approval, product approval, GMP review, and the setting of drug prices and reimbursement standards.
A company therefore often needs a coordinated approach that combines patent strategy (including patent-approval linkage), compliance review for fair trade (covering reverse payment agreements and market-dominant positions), and integrated planning of an insurance listing strategy (in preparation for HTA and economic evaluation), together with legal risk management across the M&A and IPO processes.
Characteristics of the Industry Structure
Pharmaceutical and biotechnology companies share the following characteristics.
∙ Competition over innovative products often gives rise to fair trade issues such as patent litigation, reverse payment agreements, and abuse of a market-dominant position
∙ Engaging with insurance systems is a constant requirement, including preferential drug pricing, responses to PVA and post-reassessment, reassessment of reimbursement appropriateness, and expansion of insurance standards
∙ Administrative investigation risk from the various agencies is ever-present, including inspections and investigations by the Ministry of Food and Drug Safety, the Fair Trade Commission, and public health centers
Policy and Market Changes
The pharmaceutical and biotechnology market has a structure in which tighter regulation and innovation-promotion policies advance side by side, while review standards, the approval system, insurance, and the drug pricing system evolve rapidly.
The key trends include the wider use of real-world evidence (RWE) and digital health data, the strengthening of long-term tracking and management of advanced biopharmaceuticals, and the marked tightening of post-market management such as PVA.
Refinement of the Approval, Insurance, and Drug Pricing Systems
∙ Greater use of RWE and digital health data (digital evidence) in approval and reimbursement, particularly for high-cost and rare-disease treatments
∙ Tighter drug pricing management and expanded monitoring of PVA (price-volume agreement)
∙ Stronger reassessment of reimbursement appropriateness and more advanced review of proposed expansions of insurance standards
Changes in the Patent and Competition Environment
∙ More Fair Trade Commission investigations relating to reverse payment agreements and abuse of a market-dominant position
∙ Growth in patent and licensing disputes as competition among global pharmaceutical companies intensifies
Expansion of New Industries
∙ Tighter approval and labeling and advertising regulation of health functional foods
∙ Stronger safety management of imported pharmaceuticals, health functional foods, and raw materials
2. Pharmaceutical and Biotechnology | Key Legal and Regulatory Risks
For pharmaceutical and biotechnology companies, regulatory risk can arise at every stage, including research and development, clinical trials, production, sales, and insurance strategy.
At the clinical trial stage, a company generally must follow the statutory procedures, such as IRB approval, approval of the investigational new drug (IND) application, and execution of the clinical trial agreement (CAT). Inadequate documentation or a breach of research ethics can give rise to serious consequences, including suspension of the trial or criminal punishment.
Key provisions such as compensation for harm, ownership of data, and the obligation to report results should also be clearly set out in the clinical trial agreement in order to prevent later disputes.
The product approval stage carries similar exposure. If the completeness of the submitted materials, the statistical and scientific validity of the clinical evidence, or GMP conformity falls short, approval may be delayed or refused, so it helps to plan the strategy in advance.
Patent Litigation and Issues of Abuse of Intellectual Property Rights
As companies compete over new drugs and improved new drugs, patent invalidation and infringement litigation and the patent-approval linkage system tend to surface as central issues.
In particular, where the anti-competitive nature of a reverse settlement is recognized, it may be sanctioned as a violation of the Monopoly Regulation and Fair Trade Act, so advance compliance review that accounts for the Fair Trade Commission's review guidelines and overseas precedents can be valuable.
In addition, evergreening, one of the strategies for expanding a company's patent portfolio, can meaningfully extend the patent term and thereby support the continuity of R&D and profitability. Where it produces anti-competitive effects, however, it may be treated as an abuse of intellectual property rights, so caution is warranted.
Main Types of Evergreening Strategy
Obtaining a new patent by reworking the same ingredient into a sustained-release form, a patch form, or similar
▶ Indication
Securing a patent for a new indication of an existing drug
(e.g. : repositioning a cardiovascular treatment as an erectile dysfunction treatment)
▶ Composition
Adjusting the composition ratio to improve efficacy and filing a new patent on the result
▶ Process
Filing a patent that optimizes the production method of an existing drug
▶ Combination therapy
Filing a patent for a new composition with improved efficacy and effect by pairing an existing single-ingredient drug with another active ingredient
These strategies can advance a company's innovation and profitability, yet where they unduly restrict the market entry of generic drugs, they may raise concerns as an anti-competitive act under the Monopoly Regulation and Fair Trade Act, which makes an advance risk review well worth conducting.
Fair Trade Issues Such as Bid Rigging and Abuse of a Market-Dominant Position
Concerted conduct among pharmaceutical companies, such as price-fixing, bid rigging, and sales restrictions, draws close scrutiny from the Fair Trade Commission.
A high share of a particular pharmaceutical market can also readily raise concerns about an abuse of a market-dominant position, and the way a company responds to a Fair Trade Commission investigation bears directly on the continuity of its business.
Regulatory Response Such as Product Approval, GMP, and Clinical Trials
Pharmaceuticals, biopharmaceuticals, health functional foods, and veterinary medicines must all go through approval, review, and inspection by the Ministry of Food and Drug Safety, and the legal requirements must be met throughout the entire process, from the clinical trial stage through quality control (GMP) to the product approval application.
Clinical Trial Stage
At the clinical trial stage, a company generally must follow the procedures prescribed by statute, including IRB (Institutional Review Board) review, approval of the clinical trial plan, and execution of the agreement with the clinical trial institution (CAT).
If key provisions such as compensation for harm, ownership of data, and the scope of responsibility are not clearly set out in the agreement, the result may be suspension of the trial, disputes, or criminal liability.
Product Approval Stage
When applying for product approval, legal coherence is central, including the adequacy of the submitted materials, the reliability of the clinical evidence, and proof of safety and efficacy.
At this point, prior inquiry and review strategies can improve the likelihood of a successful approval.
Because regulation continues after approval, such as fulfillment of conditional approval, reporting of safety information, and reexamination, the post-approval management system should also be prepared in an integrated way.
▶ Frequently Occurring Issues
∙ Insufficient statistical and scientific validity of clinical trial materials
∙ Suspension of recognition of GMP conformity
∙ Deficiencies in documents or processes during on-site inspections of overseas manufacturing sites and domestic inspections
Strategy for Drug Pricing, Reimbursement Listing, and Expansion of Reimbursement Standards
Drug pricing negotiations, reimbursement listing, PVA (price-volume agreement) negotiations, and expansion of reimbursement standards bear directly on a product's marketability.
In particular, reassessment of reimbursement appropriateness may lead to a reduction in the price of an existing product or to its withdrawal, so ongoing attention is needed.
Investigations by the Ministry of Food and Drug Safety, Public Health Centers, and the Fair Trade Commission, and Imported Food Safety Management
Pharmaceutical, biotechnology, and food companies may become subject to the following investigations and inspections.
∙ On-site inspections by public health centers (relating to the Pharmaceutical Affairs Act and public health)
∙ Fair Trade Commission investigations (bid rigging, reverse payments, abuse of market dominance)
∙ Regulatory response by product category, such as management of imported pharmaceuticals and active pharmaceutical ingredients and imported food safety management
Because responding to inspections and investigations bears directly on a company's operations, prompt and professional legal support can be important.
3. Pharmaceutical and Biotechnology | Risk Management
In the pharmaceutical and biotechnology field, risks tied to regulation, competition, IP, and administrative investigations tend to overlap, so a full lifecycle management system can make a real difference.
Category | Details |
① Regulatory Compliance and Approval Response | - Establishing the product approval strategy |
- Reviewing GMP and the manufacturing and quality control system | |
- Compliance with clinical trials, research ethics, and bioethics | |
- Compliance with health functional food approval and labeling and advertising law | |
② Patent and Competition Law Risk Management | - Patent strategy and litigation response |
- Reviewing licensing agreements and technology transfer | |
- Responding to fair trade investigations relating to reverse payment agreements and market dominance | |
③ Drug Pricing and Insurance Strategy | - Preferential drug pricing strategy |
- Insurance listing and expansion of reimbursement standards | |
- PVA (price-volume agreement) negotiations | |
- Responding to reassessment of reimbursement appropriateness | |
④ M&A · IPO · Investment Structure Advisory | - Pharmaceutical company IPO and listing preparation |
- Pharmaceutical company M&A, licensing, and JV | |
- Corporate value analysis and restructuring strategy |
Advisory and Management Support
The firm's Medical, Bio, and Healthcare Group advises across the full industry lifecycle, from R&D, clinical trials, approval, drug pricing, insurance, and market access, through competition matters, responses to regulatory agencies, intellectual property, and M&A and IPO.
Main Service Areas
∙ Strategic advice on IP and fair trade risks such as patent disputes, licensing, and reverse payment agreements
∙ Advice on approval and insurance systems such as product approval, preferential drug pricing, and health insurance reimbursement listing and expansion of standards
∙ Building regulatory compliance systems and advising on compliance for clinical trials, GMP, quality control, and the Bioethics Act
∙ Developing and supporting response strategies for administrative investigations and inspections by the Ministry of Food and Drug Safety, public health centers, the Fair Trade Commission, and others
∙ Regulatory advice by product category, including pet healthcare (veterinary medicines), health functional food approval, and imported food safety management
∙ Monitoring of amendments to statutes and guidelines, with legislative and policy consulting
Daeryun Law Firm includes attorneys who have built varied practical experience in the pharmaceutical and biotechnology field.
With a firm grasp of the industry's regulatory structure and corporate operating environment, they offer practical advice on a range of issues such as complex approvals, product management, and labeling and advertising.
In the complex regulatory environment of the pharmaceutical and biotechnology industry, 🔗medical attorneys draw on practice-oriented expertise to develop strategic solutions aimed at supporting both the company's business viability and its safety.
