🟡 “Clinical Trial Costs Surge... Industry Pushes to Loosen Co-Development Restrictions”

📅 Date

July 28, 2025

✍️ Author & Source

By Noh Byung-chul – DailyPharm

🧾 Summary (non-simplified)

Four years into Korea’s “1+3” co-development restriction on improved drugs (개량신약), industry voices—particularly from the Korea Pharmaceutical and Bio-Pharma Manufacturers Association—are pushing for a relaxation toward “1+5” or even “1+7.” Under current rules, only three additional companies may co-register a product using shared clinical or bioequivalence data, assuming identical manufacturing site and process.

The industry argues that surging clinical trial costs (₩3–10 billion for Phase 1, over ₩10 billion more for Phase 3) justify expanding co-development access. Proposals also include reintroducing Phase 3 exemptions for simple combination drugs when real-world co-prescription volumes are high—framed as evidence of safety and efficacy.

Companies further criticize the reimbursement system: when even one generic enters the market, improved drug prices drop from 68% to 53.5%, regardless of development cost or time elapsed.

While the proposals aim to reduce duplicative investment, they raise profound concerns about quality assurance, data integrity, and regulatory traceability.

⚖️ Five Laws of Epistemic Integrity

1. ✅ Truthfulness of Information

The article provides clear details on the 1+3 rule, investment ranges, and policy history. Statements from industry bodies are attributed and plausible.

2. 📎 Source Referencing

Sourced from DailyPharm, a specialized media outlet with high access to industry insiders. Direct citations from the Korea Pharmaceutical Association confirm source reliability.

3. 🧭 Reliability & Accuracy

While numbers are internally consistent, the article lacks critical counterpoints from MFDS, QA specialists, or independent regulatory voices, creating an asymmetry favoring the industry view.

4. ⚖️ Contextual Judgment

The article frames deregulation as a “reasonable” solution to rising costs without addressing risks to manufacturing traceability, product variability, or global QA expectations.

5. 🔍 Inference Traceability

The narrative implies that clinical efficiency and financial relief should override regulatory caution—but this inference lacks a safety-based justification or international comparative analysis.

🧩 Structured Opinion (BBIU Analysis)

The current push to extend co-development approvals from “1+3” to “1+5” or “1+7” under a single clinical package represents a risky dilution of epistemic and regulatory integrity. While rising trial costs are real, this proposal risks creating an administrative shortcut that disconnects product-level quality from data-level authorization.

Without batch-level QA, dual verification, and post-market auditing, the system could become vulnerable to product inconsistency, batch drift, or non-validated process transfers. Worse, it could damage Korea’s standing with external regulatory bodies (FDA, EMA, PMDA), who may interpret the move as undermining Korea’s PIC/S and ICH commitments.

The proposal to waive Phase 3 for combination drugs based on prescription volume raises symbolic red flags: it replaces structured clinical evidence with usage-based inferences, without controlling for off-label use, reporting bias, or payer distortions.

In essence, the proposal sacrifices structural accountability in the name of efficiency—without erecting a compensatory QA framework.

🧨 Strategic Risks of Long-Term Implementation (BBIU Addendum)

1. 🧬 Erosion of Product Identity Integrity
   Granting approval to up to 7 companies based on a single clinical or BE dataset, without full-scale batch verification, risks disconnecting the final marketed product from the originating evidence base. Over time, this leads to:

   • Loss of traceability

   • Weak accountability in pharmacovigilance

   • Difficulty isolating adverse event sources across co-developed brands

2. 🔻 Decline in Global Regulatory Credibility

   • International agencies (FDA, EMA, PMDA) may question the robustness of Korea’s approval framework, leading to stricter import controls, plant inspections, or exclusion from fast-track pathways.

   • Korea’s PIC/S status and future ICH harmonization initiatives could be jeopardized.

   • Global MNCs may reduce technology transfers or limit license-out deals with Korean partners due to quality concerns.

3. 🧱 Mid-Sized Firm Bottleneck
   While framed as a benefit to small and mid-sized enterprises (SMEs), the new framework risks consolidating the field around a few dominant CMO/CDMOs that serve as the “1” in the 1+7 model.

   • Smaller players may lose their technical independence

   • Data dependence may replace manufacturing innovation

   • A tiered pharmaceutical ecosystem may form, reducing true domestic R&D capacity

4. 📉 Devaluation of Clinical Investment
   If approval becomes decoupled from rigorous trial execution:

   • Korean clinical data will lose epistemic weight globally

   • Local trial CROs and bioequivalence centers may see reduced demand

   • The overall perception of Korean pharma as “data-light, cost-focused” may gain traction—especially in high-value therapeutic areas

5. 🚨 Moral Hazard and Price War Spiral
   Without reform to reimbursement mechanisms (currently triggered by even one generic entry), firms may:

   • Delay improved-drug launches to avoid triggering price cliffs

   • Prioritize cheap co-development over differentiated innovation

   • Engage in symbolic innovation (minor modifications + repackaging) instead of true medical advancement

🎯 Final Insight

A short-term deregulatory win may sow the seeds of long-term degradation.
Korea risks transforming its pharmaceutical sector into a high-volume, low-trust ecosystem—profitable in appearance, but hollow in global standing.