South Korea: Asia's Second Innovation Engine

(MENAFN- ING) Past: from generics producer to biologics specialist

South Korea's pharma sector started from a relatively modest base, historically focused on generics, biosimilars and manufacturing excellence rather than global originator innovation. The pivot came through deliberate industrial policy: government-backed bio-clusters, rising public-private R&D, and the emergence of globally relevant biologics players such as Celltrion, Samsung Bioepis and Samsung Biologics. Between 2020 and 2022, investment in the biopharmaceutical industry rose by an average 21.6% per year, reaching around $2.9bn (IMAPAC), helping Korea build a reputation as a high-quality biologics and biosimilars hub.

In doing so, the country built a strong track record in several therapeutic areas such as neurologic, metabolic and immunological conditions. Recently, improvements in RNA platforms and cell/gene therapies have been impressive. Yet, oncology remains the main driver of innovation and is far and away the country's most important research area.

Oncology remains Korea's key research area

Research projects funded by the Korean Drug Development Fund (KDDF) by stage and research area

Present: Asia's second innovation star after China, but with bottlenecks

South Korea is now one of Asia's most credible biopharma innovators. Its biopharma market is roughly $22bn (IMAPAC), ranking 13th globally, and Seoul was the world's top city for company-led clinical trials in 2022, while South Korea ranked fifth globally as a country. Moreover, South Korean companies discovered more than 1,300 new drug candidates over the past three years, equal to around 10% of the global total, putting Korea ahead of established R&D hubs such as the UK, Switzerland and Japan (Citeline). In short, Korea is a serious hub for clinical development.

In addition, we estimate that Korea's domestic demand rose by a little over 8% last year and will continue to grow at a similar rate for the foreseeable future, driven in large part by population ageing. Furthermore, Korea's pharmaceutical exports reached $10.4bn in 2025, up 11.8% year-on-year. Biopharmaceuticals were the main growth engine, accounting for 62.6% of pharmaceutical exports and rising 18.2% year-on-year, supported by strong demand for biosimilars and growing CDMO orders for Korean manufacturers. Despite geopolitical turmoil and tariffs, the US remained the top export destination.

South Korea's drug exports have risen steeply in the past few years

Korean pharmaceutical export (US$bn)

Future: can South Korea retain momentum?

South Korea's government aims to make Korea a top global biopharma power by 2030, with targets including doubling biopharmaceutical exports, developing three blockbuster innovations, and becoming the world's third-ranked clinical-trial market. This ambition is backed by funding: the KDDF plans to support more than 1,200 new drug-development projects by 2030, backed by $1.5bn over 10 years.

Moreover, Roche recently committed $486m over five years to expand clinical trials, transfer expertise and support Korean biotech ventures, while Eli Lilly separately announced a $500m five-year investment to establish Lilly Gateway Labs. Licensing momentum has also improved: South Korean innovator-drug licensing deal value reached $7.86bn in 2025, which is up 113% from 2024.

However, Korea's clinical-trial momentum is showing signs of strain after a significant increase in the past decade. Active clinical trials fell from 2,307 in 2024 to 2,175 in 2025.

Korea's clinical trial momentum has halted in recent years

Percentage of clinical trials started as percentage of global total

New medicine approvals also fell in recent years: to 23 in 2024, a 38% decline from 2023. Regulatory frictions play an important role here: lengthy approval processes, strict patent extension rules and complex reimbursement are a drag on Korea's ambitions.

South Korea's drug approvals have been relatively low recently

Number of new drug approvals in South Korea per year

In short, South Korea has become Asia's most credible“second innovation engine” after China – strong in biologics capacity, clinical trials, biosimilars, ADCs, cell and gene therapies, and platform technologies. But the country's next phase depends on whether policy can keep pace with ambition: pricing reform, faster approvals, clearer patent protection and a more generous reimbursement will determine whether Korea becomes a true breakthrough-drug originator.

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