KPTA ‘KOR-CHN-JPN supply cooperation to bring $12B effect'

Korea-China-Japan pharmaceutical trade-related organizations sign MOU... join hands to stabilize supply chain

The Korea Pharmaceutical Traders Association (KPTA), China Chamber of Commerce for Import & Export of Medicines & Health Products (CCMPHIE), and Japan Pharmaceutical Traders Association (JPTA) announced on June 25 that they signed a memorandum of understanding (MOU) for the stabilization of the pharmaceutical supply chain at the Korea Pavilion in the CPHI & PMEC CHINA exhibition hall in Shanghai, China.

 

The signing ceremony was attended by Hyung-seon Ryu, Chairman of the KPTA; Zhou Hui, President of CCCMHPIE; Ichiro Fujikawa, President of JPTA; Young-soo Jeong, Director of the KOTRA Shanghai Trade Office; and over 20 representatives and officials from each country.

 

The MOU was signed to improve the global pharmaceutical supply chain, which has become unstable following the COVID-19 pandemic, and to enhance the three countries' capability to respond to health crises through cooperation.

 

The three associations play leading roles in the pharmaceutical trade and distribution sectors.

 

Through the MOU, the parties agreed to collaborate on ▲ the export, import, development, and supply of essential and active pharmaceutical ingredients; ▲ exchange of pharmaceutical research personnel, technology, and information; and ▲ joint hosting of seminars, academic conferences, and workshops to promote pharmaceutical trade.

 

They plan to concretize the outcomes of the MOU through the implementation of practical joint projects.

 

The KPTA stated that if supply chain stabilization is realized through this agreement, it will bring an annual economic effect of approximately USD 12 billion through ▲the reduction of raw material inventory costs ▲reduction of procurement costs through joint purchasing ▲reduction of health crisis response costs ▲trade creation effects from the activation of pharmaceutical trade among the three countries ▲trade diversion effects from replacing overseas pharmaceutical imports with intra-regional trade.

 

Also, based on this agreement, it is anticipated that a three-country contract manufacturing (CDMO) model may be forged, enabling Korean companies to produce pharmaceuticals at competitive prices in China, register them in Japan, and enter the European market.

 

Cases where domestic pharmaceutical companies experienced disruptions in imported raw material supplies also also expected to decrease, as the partnership will allow Korean companies to secure stable supply through emergency supply contracts with Chinese and Japanese companies.

 

Hyung-seon Ryu, Chairman of the KPTA, stated, “Korea has strengths in producing high-quality drugs, Japan in precision manufacturing technology and rare drug raw material technology, and China in large-scale production and supply capabilities.

 

This MOU will greatly contribute to the stability of the entire Northeast Asian supply chain and the enhancement of global competitiveness.

 

We ask Korean companies to actively participate in various areas, including follow-up technical collaboration, research and development, and contract manufacturing.” Zhou Hui, Chairman of CCCMHPIE, said, “This agreement is the result of close collaboration between the 3 countries and will contribute not only to the stable supply of essential and raw pharmaceuticals but also to the creation of new business opportunities.

 

It will serve as a leading model for cooperation in the East Asian pharmaceutical industry.” Ichiro Fujikawa, President of the JPTA, commented, “Korea and China are Japan’s core partners for raw materials and finished pharmaceutical products.

 

This agreement will help alleviate the shortage of pharmaceutical supplies in Northeast Asia and positively impact the growth and development of each country’s pharmaceutical industry.”