SEJONG -- The Korean government has decided to inject 877.7 billion won ($693 million) into the pharmaceutical industry which will be used for the development of new drugs, especially medicines and vaccines for variants of COVID-19, and fostering the nation’s bio-related manpower.

The government also plans to support businesses which have been developing innovative vaccines or other medicines by raising the so-called “K-global vaccine fund” worth 500 billion won, officials said Thursday.

According to the Ministry of Health and Welfare, the 2022 commission for fostering and supporting the pharmaceutical industry finalized its implementation plan for this year.

The budget of 877.7 billion won for pharmaceuticals and bio in 2022 marked an increase of 13.7 percent, compared to 771.8 billion won in 2021.

Under the confirmed budget, the ministry will push for implementation of 152 details in for major policy segments: research and development of new medicines, fostering of the workforce, supporting exports, and improving relevant regulations.

The local pharmaceutical industry is a 23 trillion won market as of 2020, with its output and outbound shipments continuously increasing thanks to their recent active inroads into overseas markets.

Its growth is projected to be steady this year, buoyed by an expanded production of biosimilar drugs and increasing exports of its independent technologies.

An official said the ministry will focus on supports for businesses, engaging in state-led development of new medicines, commenting on the allocation of 134.2 billion won to the segment this year. This is an increase by about 200 percent, compared to the previous year.

Investment in the medicines and vaccines for variants of COVID-19 will reach 97.3 billion won.

Among state investment in manpower is 12.5 billion won in fostering bio production, dubbed the “K-National Institute for Bioprocessing Research and Training,” and 10 billion won in supporting a convergence-type workforce, which combines information technology with bio-technology.

As a noteworthy case, the government has decided to set up an overseas office in a Boston-based bio cluster by investing 1.09 billion won.

A state-led fund worth 500 billion won will be raised as well, whose investors are composed of the government, public agencies and private investments.

Called the “K-global vaccine fund,” the fund will support local businesses that develop innovative drugs and COVID-19 vaccines. Apart from the fund, the ministry is poised to create another policy fund at a similar size by 2023.

“This year is a significant time to map out support plans for the coming five years (2023-2028),” Health and Welfare Minister Kwon Deok-cheol said.

He said the government “is seeking to generate core implementation tasks to reap into a pharmaceuticals powerhouse.”

As the government has finalized the nation’s second comprehensive support project for the 2017-2022 period for the industry, the coming third comprehensive project for 2023-2028 is drawing wide attention in the market.

By Kim Yon-se (kys@heraldcorp.com)