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LG Chem biggest beneficiary of subsidy for innovation

Oct. 15, 2019 - 15:24 By Lim Jeong-yeo
LG Chem was the biggest beneficiary of government subsidies for innovative pharmaceutical firms last year, according to the National Assembly’s Health and Welfare Committee on Tuesday.

The government doled out subsidies of 92.2 billion won ($78 million) to 45 pharmaceutical firms carrying out innovative projects in 2018.

LG Chem got 13.6 billion won, followed by Daewoong Pharmaceutical (9.2 billion won), Chong Kun Dang (9.1 billion won), Viromed (8.9 billion won), Celltrion (6.8 billion won), CJ Healthcare (5.9 billion won), Boryung Pharmaceutical (5.7 billion won) and Genexine (4.8 billion won). 

Committee member Rep. Nam In-soon argued for a bigger government contribution to aid innovative pharma firms, citing a 19 percent drop from 2017’s 114.2 billion won.

Regarding the details, some 21.2 billion won went for research and development support in 2018, 440 million won for business management consulting such as overseas expansion strategy and 70.6 billion won for tax and cost exemptions and benefits.

Celltrion allocated the most amount for R&D -- around 281.8 billion won taking up 37.5 percent of its budget -- followed by Hanmi Pharmaceutical (160 billion won), GC Green Cross (122.4 billion won), LG Chem (117.6 billion won), Chong Kun Dang (111 billion won), Daewoong Pharmaceutical (93.5 billion won) and Yuhan (90.8 billion won).

Genexine had the biggest ratio of budget attributed to R&D, at 656 percent with 32.7 billion won, followed by Alteogen (460 percent), Corestem (71 percent) and ISU Abxis (69 percent).

“A close analysis of innovative pharma firms’ performance as a result of the government’s financial support is needed to focus better,” Nam said, drawing attention to the revised Special Act On Fostering And Support Of Pharmaceutical Industry, in effect since June 12.

Reports from last year suggest that while the operating profit growth rate of listed pharma firms was 8.2 percent, innovative pharma firms clocked 9.1 percent.

Nam also stressed that pharma firms actively involved in novel drug R&D should be included in the category of innovative pharma companies and given adequate support.

By Lim Jeong-yeo (