Korean Pharm Cos. Urged
to Upgrade Quality or Face
Expulsion
- KFDA commissioner says a commitment to ensuring public safety

In a bid to facilitate production of quality drugs, the Korea Food & Drug Administration (KFDA) will begin operating a grading system in which pharmaceutical companies that fail to meet Korean Good Manufacturing Practices (KGMP) regulations are expelled from the market.
"Five food makers have made a good showing with more than 1 trillion won in sales, but the pharmaceutical industry is still backward to the extent that not a single company has posted sales exceeding 1 trillion won", Kim Chung-sook, the KFDA commissioner, said.
KFDA Commissioner Kim said KFDA told the CEOs of pharmaceutical companies to force inferior firms out of the market as it has warned earlier. Kim said in an interview with NewsWorld that KFDA will launch the grading system designed to upgrade the domestic pharmaceutical industry in a bid to press for what she calls quality regulation. Under the new system, excellent KGMP pharmaceutical firms will be given incentives like the exemption of pharmaceutical inspections, middle-level companies will be told to upgrade their quality levels to those of OECD countries, and inferior companies are told to make reinvestments to raise their manufacturing levels, or they will be forced to exit out of the market.
KFDA Commissioner Kim said despite its exaggerated slogans of making new medicines, the domestic pharmaceutical industry is facing a stark reality: It is stuck with excessive competition in the domestic market with a trickle of exports. Take India for example, which has made a strong showing in overseas markets, including the United States, with exports of general drugs, copy versions of brand pharmaceuticals, the KFDA commissioner said, Korean pharmaceutical companies are urged to raise a competitive edge in an era of market-opening.
On the other hand, Korean cosmetics firms have built up a firm foothold in the Southeast Asian market, particularly making a strong showing in the basic cosmetic sector. Take AmorePacific as the leading example. The cosmetic company is one of Korean companies with a competitive edge, some of which have churned out cosmetics under the OEM contract with foreign brands, with its annual turnover surpassing 1.2 trillion won.
Development of new medicines, dubbed as "the goose who lays the golden egg", must be an enduring, long-term process with a risk of terminating in case of any problem related to side-effects that could occur in several stages ranging from clinical tests to marketing, so a few domestic companies tend to license out their developments under a contract at an early stage. LG Life Sciences' recent gaining approval of Factive, a new drug for treating respiratory diseases, from the U.S. FDA is the result of vast investments into development of new medicines with profits made by the refinery unit of LG Group, she said.
"I've made strenuous efforts to make good on my pledge, made last September during my inauguration, to make KFDA a government agency committed to ensuring the safety of people, but I acknowledge that we have a long way to go yet. During this year, I will devote my energies to translating the determination to reform KFDA into tangible fruits by working hard toward gaining confidence from people and protecting public health", she said.
Korea has an insufficient structure in terms of manpower, organization and budget resources, whereas the general public are asking for quite higher demands on securing food safety quite more than what the government can do. During her business report to President Roh Moo-hyun last year, Kim said, KFDA was allowed to be augmented with 100 staff members, although the figure is still insufficient in consideration of soaring demands. Despite fewer imports than the United States, Koreans import quite more kinds of foods, but the problem is that the numbers of Korean inspectors are only one-tenth of their U.S. counterparts, she said.
The nation now turns to foreign countries for importing 60 percent of their demand for foods, even live fish and some kimchi products they eat as a side dish at cheaper price at restaurants that may come from China. Many government agencies are now engaged in the inspection of imported foods. Marine, agricultural and livestock products are being checked by the National Plant Quarantine Service, Marine Affairs and Fisheries; agricultural items by the Ministry of Agriculture and Forestry; and other food items being handled by KFDA.
The Office of Government Policy Coordination is now considering the issue of unifying duties on food safety management. The office and other government ministries, including the Ministry of Health and Welfare, are in the process of enacting the basic law on food safety, according to the KFDA commissioner. The following are the excerpts of the interview.

Question: Would you tell our readers about major policies KFDA plans to implement this year?
Answer: I've made strenuous efforts to make good on my pledge, made last September during my inauguration, to make KFDA a government agency committed to ensuring the safety of people, but I acknowledge that we have a long way to go.
During this year, I will devote my energies into translating the determination to reform KFDA into tangible fruits by working hard by gaining confidence from people and protecting public health.
First, I will place priority into expanding our professional human resources, organization and budget, which are the weak points of KFDA. In particular, my attention will be focused on boosting investments into human development which I believe is crucial for investments into ensuring not only safety of foods and drugs, but for a competitive edge of KFDA itself. Many institutions of advanced countries, including the U.S. Food Drug Administration, share the view that their competitiveness is closely connected to the competitive edge of each country's relevant industries.
KFDA's information strategy, drawn up last year, will be actively forged ahead with as part of its efforts to overhaul its work process and duties concerned with civilian applicants. It is aimed at speeding up the work process and reinforcing a function of delivering information to people in time. KFDA will make efforts to overhaul its culture and practices to the extent that people can praise that KFDA has underwent much changes.
KFDA knows the difference between authority and authoritarianism. The agency will try to make KFDA closer to the people and their beloved one, while working hard to collaborate with each bureau because it could double its outcome when Food Safety Bureau, Safety Evaluation Office, National Institute of Toxicological Research and regional agencies are closely linked.
We'll endeavor to push innovation on a continuous basis so that customers and business circles could benefit from our innovative drive.

Q: Could you elaborate on KFDA's mid- and long-term development plans?
A: Our agency was established with the goal of ensuring the safety of foods and medicines along with increasing the competitiveness of relevant industries.
To this end, KFDA has overhauled the infrastructure on safety management as an expansion of Hazard Analysis Critical Control Points (HACCP), efficient management of imported foods, and rationalization of license and reporting systems, and at the same time, has set standards and guidelines on evaluating safety on a scientific foundation. Management of such multi-user items as powdered red pepper as well as herbal medicines is made efficient, while civilian-government reporting and surveillance system has been institutionalized. KFDA have arranged frameworks of regulations on health foods and medical equipment in the interests of customers and for the purpose of the development of the relevant industries. Those on foods, medicines, cosmetics and medical equipment fail to meet public expectations, however.
Responsibilities on the safety of foods have been divided into seven government agencies. The agency is facing a lack of such infrastructure as budget, organization and manpower, a task to be tackled on a continuous basis.
KFDA will place more emphasis into realizing an efficient and transparent administration by securing professional manpower in each field, enhancing specialization, expanding budgets and financing, and building up an e-KFDA, on-line network.
The agency will beef up precautionary management measures against items with a highly potential of posing hazards, manufacturing and quality management, and ex post facto management.
In order to promote genetically modified organisms and bio-engineering sectors as the nation's next-generation growth engine fields, KFDA will focus on infrastructure build-up and inter-ministry cooperation.
KFDA will explore ways of strengthening its expertise to better cope with trade disputes in the wake of such market-opening measures as global free trade and spread of Free Trade Agreements.
The agency is bracing for the spread of international conflicts like the Iraqi situation and terrorist attacks.

Q: Would you give the details of steps KFDA have taken to ensure the safety of foods?
A: As part of efforts to build up infrastructure for the production of safe foods, the agency will expand companies subject to mandatory HACCP regulations by 2012. The agency will expand technology support to the companies who volunteer to follow HACCP regulations through field guidance.
KFDA will expand financial support to minimize the financial burden which companies shoulder in complying with HACCP regulations, including system buildup and consulting, while stepping up education and training of professionals in charge of management and efficiency.
I will strive for a revamp of regulations and systems related to health functional foods. KFDA will seek to revise pertinent regulations in connection with the introduction of a registration system for imported health functional foods and education of salesmen.
KFDA will facilitate a Good Manufacturing Practice (GMP) system for the production and distribution of excellent health functional foods. Commissioned production of health functional foods will be subject to mandatory GMP regulations, and technology guidance and assessment of implementation of GMP will be conducted on 50 SMEs.
As part of efforts to secure the safety of imported foods, KFDA will build up a centralized on-line management and control system by assimilating the operation and management system OASIS, developed by the U.S. FDA. It is aimed at ensuring consistence of duties and focusing on inspecting items with a high potential of hazards. A manual for conducting scientific and rational sensory tests will be produced and distributed, while sample surveys will be made in an efficient manner according to information on harmfulness and insufficient documented details.
Inspections will be made differentially according to the assessment of sanitary and quality management in a bid to help businesses improve sanitary conditions on a voluntary basis, while KFDA will conduct joint inspections against unsanitary foods four times yearly in cooperation with city, county, ward authorities and food consumer monitoring inspectors. Monitors are at work around the clock to check fraudulent and exaggerating advertisements, while 30 items found to have a higher rate of disqualification or a higher rate of transactions are checked once per month. Conventional markets, small-size supermarkets and the areas surrounding stations and terminals are subject to intensive inspection against unsanitary foods.

Q: What steps are in place to ensure the safety of medicine?
A: KFDA's policy for ensuring safety of medicine is to develop an infrastructure for producing quality medicines and spur the development of the domestic pharmaceutical industry.
Among the policies on which KFDA focuses are industrialization of the bio-technology sector, establishment of a medicine assessment system with international standards, safety information management system buildup corresponding to knowledge-based society and transparent administration related to pharmaceutical affairs.
The agency is exploring ways of taking precautions against such scandals as the one related to PPA (phenylpropanolamine); a substance of medicines for treating colds is being blamed for causing hemorrhagic strokes.
Departing from usual inspection into KGMP companies, KFDA is introducing a grading system designed to distinguish excellent companies and trouble firms and put the latter on stringent control. Under the system, excellent companies are given incentives, while troubled companies are placed under intensive inspection to root out illegal practices.
The domestic pharmaceutical industry is facing such problems like excessive competition in the domestic demand sector, foreign companies' rising market share following the division of medical and pharmaceutical fields, and inferior technological competitiveness.
In order to invigorate the pharmaceutical industry despite its stark reality, it is necessary to take such measures as building up infrastructure for clinical tests for the development of new medicines, boosting exports and spurred industrialization of the bio-technology sector.

Q: What steps do you plan to take against responsibilities concerning food safety management that are split among several government agencies?
A: Consensus on the need for a change, strong leadership and dedicated start-up group are prerequisite in order to unify duties on food safety management.
The organizational overhaul in food safety management calls for building an infrastructure for safety-oriented management for the purpose of protecting consumers instead of a producer-oriented one, improving efficient operation of such national resources as manpower, budget and equipment and integration of duties on food safety management that are overlapped or duplicated among several government agencies. Redundant restrictions imposed by individual regulations need to be eased on top of wide area inspection system buildup.
The Office of Government Policy Coordination is now considering the issue of unifying duties on food safety management. The office and other government ministries, including the Ministry of Health and Welfare, are in a process of enacting the basic law on food safety. nw