The Ministry of Food and Drug Safety of Korea (the "MFDS") announced major policy initiatives in the pharmaceutical sector for 2017 on January 9, 2017 (the "Policy Initiative") With respect to pharmaceuticals, the MFDS declared plans to select the "Enhancement of the Safety Management System" as its main priority and thereby strengthen user-centered safety management as well as to offer support in bolstering international competitiveness. An introductory overview of the Policy Initiative for pharmaceuticals and biopharmaceuticals respectively is as follows.

1. Pharmaceutical Sector

Strengthened Post-Management of Pharmaceuticals

Under the Policy Initiative, to strengthen the quality assurance for imported pharmaceuticals, a 3-year periodic on-site audit starting from 2017 will be conducted regarding the pharmaceutical import business. Further, in order to eradicate illegal intellectual and/or habitual online sales of pharmaceuticals, the MFDS intends to reinforce detection efforts by preparing monitoring analysis system and enforcement/processing standards.

Improved Recall System for Non-Conforming Medical Products

Under the Policy Initiative, the recall system for non-conforming medical products will be improved to prevent consumers’ purchase of hazardous medical products. Further, the MFDS will form and manage a consultative group for the operation of the “Sales Prevention System for Hazardous Medical Products.” Once the recall process for medical products is complete, the MFDS will provide evidentiary basis for the disclosure of such recall results and establish a relevant website by May 2017. In July 2017, the MFDS plans to amend the Pharmaceutical Affairs Act where the Act, if amended, would impose penalties in the case of a business entity’s nonfeasance of its recall obligation.

Other

Aside from the foregoing, the MFDS announced plans to (i) make reporting of details of handling medical narcotics (such as Propofol) mandatory through the regular management of the Narcotics Management System, (ii) safeguard rights to know and health rights of patients and/or consumers through the labeling system for the ingredients o f pharmaceuticals and quasi-pharmaceuticals and (iii) establish an integrated management system as a basis for ensuring a stable supply of orphan drugs and essential medicines and proceed with the enactment of tentatively named < Groundbreaking Drugs and Drugs for Public Health Emergency Use Development Promotion Act>.

2. Biopharmaceutical Sector

Strengthened Post-Management of Biopharmaceuticals

Under the Policy Initiative, with the strengthened post-management of products that can have potential long-term effects after being administered (such as stem cell and gene therapy products), a long-term tracing investigation system shall be mandatorily implemented for stem cell and gene therapy products from January 2017.

Moreover, regular monitoring that focuses on products with a high likelihood of public recognition and illegal distribution (including botulinum toxin products, stem cell therapy products and growth hormones) will be implemented under the Policy Initiative. In the third quarter of 2017, medical institutions and relevant local governments will conduct a joint inspection of illegal manufacturing or sale of unlicensed stem cell therapy products. 

Enhanced Regulatory Management of Biopharmaceuticals

In the biopharmaceutical sector, the MFDS plans to choose “enhancing the capabilities and services for regulatory management” as its main agenda and solidify the basis for the approval and evaluation of advanced biopharmaceuticals. For this purpose, the MFDS plans to create an enhanced regulatory environment which reflects the most recent technological trends by (i) enacting or amending a total of 6 guidelines within 2017, which among others, pertain to cell therapy products, (ii) preparing classification standards and procedures for bio products converged with big data and artificial intelligence (AI) technology, etc. and (iii) establishing clinical trial guidelines for gene therapy products.