All questions

The regulatory regime

i Classification

The Supreme Court of Korea (the Supreme Court) has held that all substances recognised by or represented to the public as diagnosing, curing, mitigating, treating or preventing diseases in human beings or animals, or exerting a pharmacological action in human beings or animals (except for those that can be instantly recognised as food products), fall under the category of pharmaceutical products, regardless of whether any such recognition or representation is actually true.

The regulatory regime in Korea adopts the following classification of products in the pharmaceutical and medical device sector.

Pharmaceutical products

The PA Act defines pharmaceutical products as:

  1. products that are not identified as quasi-pharmaceutical products in the substances list issued by the Korean pharmacopoeia;
  2. any substance used for the purposes of diagnosing, curing, mitigating, treating or preventing human or animal diseases; and
  3. any substance (other than instruments, apparatuses or cosmetics) used for the purpose of exerting a pharmacological influence on the structures or functions of human beings or animals.
Quasi-pharmaceutical products

Among the following types of products, only those that are officially designated as such by the MFDS pursuant to the PA Act will be recognised as quasi-pharmaceutical products:

  1. any fibre or rubber products, or similar products that are used for the purpose of curing, mitigating, treating or preventing human or animal diseases;
  2. any products (other than instruments, apparatuses, appliances or other articles) that minimally affect or do not directly act upon the human body; and
  3. germicides, insecticides or any products used for sterilisation, killing or prevention of infectious diseases.
Functional foods

Under the Functional Foods for Health Act, functional foods are defined as manufactured food (including processed food) containing 'functional raw materials or ingredients' that are beneficial for the human body.

Medical devices

Medical devices are defined as instruments, apparatuses, appliances or other articles (excluding pharmaceutical products or quasi-pharmaceutical products) that are used, alone or in combination with other products, to:

  1. diagnose, treat, alleviate, cure or prevent diseases;
  2. diagnose, treat, alleviate or correct injuries or physical disabilities;
  3. examine, replace or modify the structure or the function; or
  4. contraception.

The MD Act is the governing law for medical devices.

Cosmetics

Substances intended to be applied to the skin for cleansing or beautifying, or applied to the skin or hair to maintain or enhance its condition, but that have minimal effects on bodily functions, are classified as cosmetics. Cosmetics are governed by the Cosmetics Act.

Prescription and over-the-counter drugs

Pharmaceutical products are generally categorised into prescription drugs and over-the-counter (OTC) drugs under Korean laws and regulations. Pharmaceutical drugs that meet any of the following criteria are recognised as OTC drugs by the MFDS in consultation with the MOHW:

  1. drugs that are unlikely to be overused or misused, and are expected to be used safely and effectively, even in the absence of a physician's prescription;
  2. drugs that can be used for the purpose of treating a disease without relying on the expertise of physicians or dentists; or
  3. drugs with minimal side effects to the human body from pharmacological action.

All other pharmaceutical products that are not classified as OTC drugs will fall into the category of prescription drugs.

Prescription drugs may be dispensed by a pharmacist only after an assessment of the patient's condition has been made by a doctor or a dentist and the patient has been educated about taking the drug by the pharmacist, whereas the dispensing or use of OTC drugs does not require any of these procedures. Prescription drugs and OTC drugs are also distinguishable in terms of their pricing and reimbursement mechanism.

Prescription and OTC drugs were both previously available in pharmacies only. However, since 15 November 2012, a few OTC products (fewer than 20 product types) that are frequently used and designated by the MOHW have been available at convenience stores registered with the relevant local government as a seller of OTCs, subject to requirements as stipulated by the PA Act.

Controlled substances

Several prescription medicines that are controlled substances, such as narcotics (e.g., poppies, opium or coca leaves), psychotropic drugs and marijuana, are subject to stringent legal regulations owing to the high risk of misuse or illegal sourcing as opposed to other non-narcotic drugs. Before such controlled substances are imported into Korea or exported to a foreign country, the importing or exporting companies must obtain a licence from the MFDS, and the product itself must have a licence, issued by the MFDS. Naturally, the qualifications are stricter for obtaining a licence to import or export controlled substances than for non-controlled drugs. Once controlled substances are imported or exported, details related to the import or export transactions and commercial sales must be reported to the MFDS. Physicians are allowed to administer (or provide for administration) controlled drugs to a human body to treat an illness or an injury. The administering doctors regarding the administrated substances are required separately to keep a record of the following information: name, address, age, gender and disease of the patient; product name and quantity of the drug administered (or provided); and date of prescription.

ii Non-clinical studies

To conduct a non-clinical study, an investigating institution needs to be designated by the MFDS for non-clinical studies to be conducted. For an institution to qualify as a designated investigating institution, it must satisfy certain requirements in terms of personnel, facilities and equipment. All non-clinical studies must comply with MFDS guidelines for good laboratory practice (GLP).

An institution conducting testing on vertebrate animals must be registered with the MFDS as an animal testing facility under the Laboratory Animal Act. The governing legislation for the care of vertebrate animals used for research and testing are the Laboratory Animal Act and the Animal Protection Act.

iii Clinical trials

There are no qualifications imposed on a sponsor (the sponsor often hires a contract research organisation to administer the clinical trial), but the organisation undertaking clinical trials must be a qualified general hospital, a specialised hospital or another institution designated by the MFDS. The institution conducting clinical trials must submit a study protocol, an outline of the methods for recruiting subjects (including advertisements), consent forms to be received from recruited subjects and the data collection forms to its internal institutional review board for review. The clinical trials must be conducted in accordance with the standards under the Enforcement Rules of the PA Act (which is the good clinical practice of Korea) regarding various factors, such as the test methods, qualifications of the testing institution and testing supervisor, safety plan, progress report and preservation of relevant data. To enable the human subjects to give informed consent and to ensure that they do so, the details of the clinical trial, the potential adverse effects on health, and the compensation amount and method must be explained in advance. In 2013, the MFDS first introduced, and has since implemented, the Rules for Compensation of Clinical Trial Victims and Guidelines for Providing Compensation Procedures; these call for setting criteria in these matters, as well as any exceptions, and laying out the process for the application for and assessment of compensation, when regulations for compensating victims of clinical trials are being drawn up by sponsors. The MFDS introduced additional guidelines in 2014, such as the Guidelines for the Operation of the Institutional Review Board, to ensure the safety and efficacy of clinical trials.

iv Named-patient and compassionate-use procedures

As an exception to the rule that requires imported pharmaceutical products or manufactured or imported medical devices to be authorised prior to its manufacture or import, pre-launch use is permitted in the following circumstances, among others:

  1. when the Korean Orphan Drug Centre, a regulatory authority that governs named-patient supply and compassionate use of medicines, directly imports certain products into Korea;
  2. when the MFDS determines that certain products are urgently needed for the treatment of patients or the prevention of epidemic; or
  3. when the MFDS announces that certain products are necessary for self-treatment or self-aid.
v Pre-market clearanceMedicinesGeneral procedures

For medicines manufactured in or imported into Korea, each product must have marketing approval from the Minister of the MFDS (product approval) prior to its commercial distribution. For products manufactured in Korea, a manufacturer with the intent to distribute the manufactured products must obtain approval for the manufacture and sale of the product. For products imported into Korea, an importer must obtain an approval for importation. In its review for product approvals, the MFDS mainly considers whether the requirements of safety, efficacy and quality have been satisfied.

Special procedures for follow-on products

Most generic and certain biosimilar pharmaceutical products are exempt from safety and efficacy evaluations, but data on their biological equivalency must be submitted to the MFDS.

Special procedures for accelerated approval of products for unmet medical needs

For orphan drugs, drugs for the treatment of certain lethal diseases (e.g., AIDS, cancer) or incurable diseases, the MFDS may grant accelerated approval and permit the earlier sale of drugs prior to the submission of certain documents (which can be later submitted post-marketing).

Fees

Fees range from 154,220 won to 6,828,150 won, depending on whether the filing is an application for approval or a report, the safety and efficacy evaluations are required, or the evaluations on data for medical product equivalency tests are required.

Requirements for sponsor location

Product approval must be acquired and held by an entity with an address in Korea.

Requirements for appointment of a local agent

A local agent does not need to be appointed. However, because of the address requirement imposed on a sponsor, it is common practice for manufacturers based outside Korea to appoint and authorise a local entity to acquire and hold a product approval on its behalf.

Medical devicesGeneral procedures

The general procedures for the pre-sale approval of medical devices are similar to those for medicines. However, under the amended MD Act, which became effective in July 2015, for certain medical devices with very low risk (classified as Class I medical devices) or low risk (classified as Class II medical devices), the manufacturer or importer will not be required to obtain product approval for each and every product. Instead, it is sufficient to obtain a simple reporting requirement for Class I medical devices, and a product certification from the Medical Device Information and Technology Assistance Centre for Class II medical devices.

Special procedures for follow-on products

Certain Class II follow-on medical devices are exempt from the submission of data for clinical trials and technical documents (this is concluded based on the fact that similar follow-on medical devices were approved for exemption in at least three occurrences). Most follow-on Class II, III and IV medical devices are exempt from the submission of data for clinical trials. However, data for clinical trials and technical documents must be submitted for Class I medical devices.

Special procedures for accelerated approval of products for unmet medical needs

Certain state-of-the-art and rare and in vitro devices, as determined by the MFDS, are entitled to accelerated approval.

Fees

Fees range from 57,000 won to 1,108,000 won, depending on whether the filing is an application for approval or a report and whether the evaluations on data for clinical trials or technical documents are required.

The requirements for the sponsor's location and the appointment of a local agent are substantially similar as those for medicines.

vi Regulatory incentives

Owing to the recent introduction of the product approval patent linkage system, it is believed that patent protection for original pharmaceutical products in Korea was heightened as a result. In March 2015, the PA Act was amended to prepare the ground to support a link between the drug approval system and the drug patent system. Under the amended system, if a party that has obtained product approval for a new drug wants its information be placed on the patent list, the party must request the MFDS to do so within 30 days of product approval. Thereafter, once a generic manufacturer submits an application for generic drug approval, the generic manufacturer must notify the relevant patent holder with a detailed statement demonstrating that the listed patent is invalid or the generic manufacturer's product does not infringe the patent (this only applies to generic manufacturers that seek product approval for the launching of a product during the term of the listed patent and does not apply to generic manufacturers that intend and indicate that the product will be launched after the listed patent has expired). The patent holder may file a legal action against the generic manufacturer if the patent holder believes that the generic drug infringes its patent. The generic product approval will be put on hold for nine months upon the patent holder's filing of a legal action, which should be submitted within 45 days of the notice from the generic manufacturer.

Under the amended PA Act, the first company to submit an application for a generic drug, and win in a legal action against the patent holder to invalidate the related patent rights, shall be granted an exclusive right to sell the generic product for nine months from the date of the judgment by preventing other competitors of that generic drug from entering the market. The first company will be entitled to recoup the costs it has incurred in legal proceedings through this exclusive right to sell the generic drug for a limited period.

vii Post-approval controls

The product approval holder must appoint at least one person to be responsible for pharmacovigilance or device vigilance (there are no infrastructure requirements required for post-approval controls) to undertake post-marketing surveillance activities, such as post-approval testing and adverse reaction reporting. If any matter that was reported to the MFDS in the product approval process was altered or modified, the product approval holder must apply for an amendment of the product approval (if the product approval holder is replaced during the transfer of ownership of the product approval through a private transaction, an amendment must be made within one month of the date of the replacement of the product approval holder). Product approval will be valid for five years (this validity period took effect on 1 January 2013) and the product approval holder must apply for reissuance of the approval no later than six months prior to the expiry date of the validity period.

viii Manufacturing controls

To engage in the manufacture and distribution of pharmaceutical products or medical devices in Korea, several licences must be obtained in advance. The product must receive a licence called a product approval (see Section II.v). Additionally, the companies that are involved in the stages of the manufacture and distribution of the products should be licensed entities by fulfilling the requirements below.

MedicinesQualifications for a licence to manufacture

A manufacturer should be equipped with the following:

  1. a manufacturing facility;
  2. a laboratory to control the quality of ingredients, materials and products;
  3. a storage facility for ingredients, materials and products; and
  4. facilities and equipment necessary for maintaining quality and manufacturing products.

In addition, at least one pharmacist or herb pharmacist must be stationed at the manufacturing facility for quality control, subject to certain exceptions.

Good manufacturing practice

Manufacturers must act in compliance with the standards of good manufacturing practice (GMP) to ensure that high-quality products are produced. GMP inspections, including review of documents and on-site investigation, are performed by the MFDS.

The MFDS updated its GMP to be in compliance with the quality standards of the Pharmaceutical Inspection Convention and Pharmaceutical Inspection Co-operation Scheme after becoming a member on 1 July 2014.

Transfer of ownership of manufacturing facilities

In the event that manufacturing facilities are transferred through a merger or business transfer, the transferee takes on the rights and obligations of the transferor (transferring manufacturer). If an administrative sanction has already been imposed on the transferor, the transferee will also be subject to that sanction for one year from the date of the sanction, but if an administrative sanction has not yet been imposed and is pending, the relevant administrative body may seek to impose a sanction against the transferee. The foregoing does not apply, however, if the sanction or violation at the time of the merger or business transfer was unknown to the transferee.

Medical devicesQualifications for a licence to manufacture

The qualifications are substantially similar to those for medicines, but the person stationed at the manufacturing facility for quality control does not necessarily have to be a pharmacist or a herb pharmacist.

ix Advertising and promotion

Advertisements for pharmaceutical products and medical devices are subject to the regulations enforced by the MFDS and to self-regulation carried out by prior review and approval by the Korea Pharmaceutical Manufacturers Association (KPMA, for medicines) and the Korea Medical Devices Industry Association (KMDIA, for medical devices). In general, advertising materials for pharmaceutical products or medical devices must not contain false or exaggerated information regarding the product's name, manufacturing methods, its effects or results.

x Distributors and wholesalers

The distribution or wholesale of medical products is subject to the following laws and regulations.

MedicinesQualifications for a licence to distribute or wholesale

To distribute pharmaceutical products, a licence issued by the governor of the municipal government must be obtained.

To qualify as a licensee, the distributor or wholesaler must have a sales facility and a minimum storage space of 165 square metres.

The licensed distributor or wholesaler must employ a pharmacist at the sales facility for the management of sales activities.

Distribution via the internet

The distribution of medicines via the internet is prohibited.

Others

To prevent unfair trade practices between distributors and healthcare professionals, a distributor or wholesaler is prohibited from, directly or indirectly, selling pharmaceutical products to its affiliates (e.g., an entity or hospital controlling the distributor or wholesaler by possessing 50 per cent or more of its securities, or an executive of the distributor or wholesaler).

Medical devicesQualifications for a licence to distribute or wholesale

To distribute or lease medical devices, a report must be filed with the municipal government. A licence is not required.

Distribution via the internet

The distribution of medical devices via the internet is permitted.

xi Imports and exports

The authorisations required for the import and export of pharmaceutical products and medical devices to and from Korea are set out in the following table.

Medicines

Medical devices

Import

Export

Import

Export

Licence to conduct import or export businessRequired*Not required (but subject to the laws of the importing country)RequiredNot required (but subject to the laws of the importing country)
Product approval for import or exportRequiredRequired (but the submission requirement of biological equivalency materials may be exempted)RequiredRequired (but the submission of certain application dossier/GMP materials may be exempted)

* Under the PA Act (effective from 29 September 2015), anyone who intends to engage in the business of importing drugs or quasi-drugs must file a report to the MFDS for the import business, in addition to the product licence for the individual product.

Certain MFDS approvals are required for the import or export of medicines containing ingredients derived from endangered animals or plants pursuant to the Convention on International Trade in Endangered Species of Wild Fauna and Flora.