The government unveiled a set of plans on Friday to nurture 12 globally competitive pharmaceutical companies by 2020.

The plans are intended to develop Korea into the seventh-largest power in the industry.

Under the arrangement presented by Health and Welfare Minister Rim Che-min to President Lee Myung-bak, 12 firms will develop 10 new drugs, and the country will take up 5.4 percent of the global pharmaceutical export market in eight years. Its current market share is 0.2 percent.

The ministry will offer a total of 146 billion won ($126 million) in subsidies to “innovative pharmaceutical firms” that post more than 100 billion won in sales and invest at least 5 percent of their revenue in research and development or those that record less than 100 billion won in sales but spend more than 7 percent on R&D.

The candidates likely to meet standards for the government support are Donga, Green Cross, Yuhan, Daewoong, JW, Chong Kun Dang, LG Life Sciences, Ildong, Hanmi, Boryung, United, Ilyang, Hanol Bio Pharma, Whanin and Ahn-Gook, the Korea Food and Drug Administration said. Global firms could also be certified if they spend an equivalent amount for R&D in Korea.

The designated ones will benefit from up to 30 percent tax cut in R&D; expansion of loan programs; and subsidies of a total of 146.9 billion won. The government aims to nurture the selected firms into either of three kinds ― global major pharmaceuticals with more than $10 billion annual sales; specialized pharmaceuticals focusing on rare-disease cures or global generics pharmaceuticals with state-of-the-art facilities. The authorities hope to see two global pharmaceuticals, eight specialized pharmaceuticals and two global generic pharmaceuticals by 2020.

The government will also support the establishment of two pharma-star graduate schools certifying global licensing and regulatory affairs experts. They will be sent to target countries to assist exports, the ministry said.

“Currently, few Korean pharmaceutical companies have a competitive edge in the global market. Korean firms are no match to Pfizer, Novartis, Amgen, Teva or Actavis. However, we are confident that the plan will bear fruit,” said Kim Won-jong, a ministry official.

“We will constantly give merits and advantages to companies developing new drugs while seeking price cut on non-patent drugs to beef up national health insurance fund.”

By Bae Ji-sook (baejisook@heraldcorp.com)