[Bioscience] Competition for new drugs is fierce... Government R&D investment declines for 2nd year

It was found that the government's investment in research and development (R&D) related to new drugs has decreased for two consecutive years after peaking in 2022.

In a situation where the United States and China are fiercely competing to develop cutting-edge new drugs, there are voices calling for a systematic increase in investment for the survival of Korean bio companies.

◇ New drug R&D investment decreases for two consecutive years… Focus on infrastructure and candidate materials

According to the pharmaceutical and bio industry on the 7th, the Korea Institute of Science and Technology Planning and Evaluation (KISTEP) announced that the government's research investment in new drug development in 2024 was calculated to be 543.3 billion won in the recently published '2024 Government R&D Investment Portfolio Analysis for New Drug Development'.

The government's investment in new drug development steadily increased from 280.5 billion won in 2014 to 621.9 billion won in 2022. It is a 122% increase in 8 years.

However, investment costs for new drug development fell to 598.5 billion won in 2023 and further decreased to 543.3 billion won in 2024.

The total investment in new drug development among the government research and development budget over the 10 years from 2015 to 2024 was 4.4745 trillion won.

When looking at new drug-related R&D investment by sector in 2024, infrastructure accounted for the largest share at KRW 183.4 billion (33.8%).

This was followed by candidate material derivation and optimization at KRW 136.8 billion (25.2%), non-clinical testing at KRW 109.3 billion (20.1%), clinical trials at KRW 54.4 billion (10.0%), and target discovery and verification at KRW 24.4 billion (4.5%).

Compared to 2022, when investment in research and development related to new drugs was the highest, there was no significant difference in infrastructure investment and non-clinical areas, but candidate substance derivation and optimization and clinical areas decreased.

As of 2022, investment in candidate substance derivation and optimization was KRW 172.2 billion, and clinical investment was KRW 79.1 billion.

◇ Focus on phase 1 clinical investment… Industry: “We need to provide systematic support starting from start-ups”

In the case of clinical investment, in 2024, phase 1 clinical trials accounted for 67.9% and phase 3 clinical trials accounted for only 2.5%. In 2023, investment in phase 1 clinical trials was 66.3% and phase 3 clinical trials was 2.5%.

On the other hand, in 2022, the difference was small at 38.7% in phase 1 clinical trials, 35.3% in phase 2 clinical trials, and 26.0% in phase 3 clinical trials.

The largest investment amount by disease in 2024 was infectious diseases (KRW 100.9 billion), tumor diseases (KRW 99.1 billion), and degenerative brain diseases (KRW 37.6 billion). The ranking was the same in 2022, but the focus on infectious diseases (KRW 202.5 billion) was noticeable.

Report authors Hong Ki-hyun and Jeong Bong-jin, associate researchers, did not specifically mention the reason for the decline in investment in research and development related to new drugs in this report.

However, they suggested, “New drug development takes a long time, has a high risk of failure, and the target diseases and types of drugs are diverse, so there is a need to invest strategically and efficiently.”

Lee Seung-gyu, vice president of the Korea Biotechnology Association, said, "Previous governments have said they will foster the bio sector, but there are many companies that are unable to feel the warmth of investment. We need to systematically support startups by creating various funds that can strengthen the overall bio ecosystem."

He added that the number of capable bio companies will increase if they invest in the early stages of new drug development, such as phases 1 and 2, rather than phase 3 clinical trials.