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Healthcare Resource Guide: South Korea

South Korea Statistics

Summary

Market Entry

Current Market Trends

Main Competitors

Current Demand

Registration Process

Barriers

Trade Events

CS Contacts

Capital: Seoul

Population: 50.63 Million (2015)

GDP*: USD 1.561 trillion (2015 estimate)

Currency: Korean Won (W)

Language: Korean

Summary

Medical Equipment and Devices

Unit: USD thousands

 

2014

*2015

(estimated)

**2016

(estimated)

2017

(estimated)

Total Market Size

4,850,548

4,963,241

4,820,347

5,301,500

Total Local Production

4,324,153

4,391,623

4,255,447

4,595,883

Total Exports

2,445,220

2,358,732

2,221,510

2,303,705

Total Imports

2,971,615

2,930,350

2,786,410

3,009,322

Imports from the U.S.

1,299,247

1,275,046

1,218,188

1,315,643

Exchange Rate: 1 USD

1,053

1,132

1,250 (Est.)

1,250 (Est.)

Total Market Size = (Total Local Production + Total Imports) – (Total Exports)

Source: Korea Medical Devices Industry Association, KMDIA

Note: *2015/**2016: Due to the appreciated exchange rates (est.), statistics in USD have decreased although statistics in Korean Won increased.

The Korean medical device market is estimated to reach USD 4.8 billion in 2016. U.S. medical device manufacturers carefully watch government pricing and reimbursement policy as Korea grapples with cost containment under its national healthcare system.

The importation of medical devices requires the assignment of an importer or representative based in Korea to manage medical device approvals and to ensure regulatory compliance. As part of pre-market approval requirements, the Government of Korea requires testing reports on safety and efficacy. In addition to medical device approvals, companies also need to negotiate pricing terms with the Korean Health Insurance Review & Assessment Service (HIRA).

Market Entry

All domestic and foreign medical devices are subject to pre-market licenses from the Ministry of Drug and Safety (MFDS, formerly KFDA).

Distribution/Business Practices/Key Competitive factors

Medical devices are distributed mainly through local distributors. A local distributor may directly cover the whole country on an exclusive basis or a master distributor may contract with other regional sub-dealers for sales nationwide.

Sales leads for medical devices in Korea are normally created through steady communication with local subsidiaries or between distributors/commission agents and physicians on an individual basis. Local representatives call on physicians frequently and provide information on products to maintain good relationships.

One reliable distributor to cover the country on an exclusive basis is highly recommended for the Korean market since Korea is a geographically small country, and major users for high end medical devices are limited to general hospitals and university hospitals. More than one distributor often confuses clients in terms of representation and prices and diminishes the reliability of the foreign supplier.

Current Market Trends

Korea depends on high-end medical devices from the U.S., EU, and Japan, to supply about 60 percent of total market demand. Korean companies manufacture comparatively lower-end (mid-technology) medical devices.

Main Competitors

Currently, the United States has largest import market share in Korea, followed by the EU and Japan.

Current Demand

In 2016, total imports of medical devices were estimated at USD 2.8 billion, with U.S. imports totaling over USD 1.2 billion. While U.S. market share represents approximately 40-45 percent of the import market, demand for foreign advanced and innovative medical devices showed relatively slow growth in 2015.

Registration Process

Pre-market License

All medical devices are required to obtain marketing clearance from the Ministry of Food and Drug Safety (MFDS) before they are manufactured in or imported into Korea. As of April 8, 2012, Korea Good Manufacturing Practice (KGMP) certification is required at manufacturers’ sites overseas (Class 3 and 4) or in Korea through their importers by documents (Class 2), depending on cases and criteria.  KGMP certification should be obtained to apply for a pre-market license.

Currently, medical devices are classified into four categories in Korea depending upon technical attributes and product use. MFDS requires pre-market notification for class I devices and pre-market approval for class II, III, and IV devices. Class III and IV devices must pass the most stringent technical review by MFDS with authorized labs to prove their safety and effectiveness. Since MFDS issues product licenses only to locally based firms, all foreign suppliers must submit required documentation and receive necessary approvals through their Korean importers, or U.S. supplier’s corporation located in Korea.

The lead-time for approval is typically 6 to12 months, including company-working time for preparing applications. Although MFDS indicates its requirements for the approval in relevant regulations, specific detailed requirements could be different according to each product item. Thus, U.S. firms should closely work with their Korean importers to determine MFDS’s requirements on a case-by-case basis to obtain approvals.

Barriers

National Health Insurance Program & Reimbursement pricing

Korea has compulsory National Health Insurance (NHI) system for 50 million citizens. The NHI system was introduced in 1977 and covered entire population by 1989. The Korean government administers funds, coverage, coding, payment and pricing.

Tariffs

Due to the Korea-US Free Trade Agreement (KORUS FTA) implemented on March 15, 2012, approximately 85-90% of imported medical devices in Korea received duty-free treatment within one year, and tariffs on the rest will be eliminated by 2018.

Trade Events

Name: Korea International Medical, Clinical, Laboratories & Hospital Equipment Show 2017

Date:

March 16-19, 2017

Location:

Convention & Exhibition Center (COEX), Seoul, Korea

Website: http://www.kimes.kr/eng/

Description:

KIMES is a total healthcare related show. It is the largest showcase for medical devices and technologies in Korea. The range of exhibits at KIMES include consultation, diagnosis central supply, clinical examination, hospital accommodation, emergency equipment, radiology, medical information system, surgical apparatus, oriental medicine, cure apparatus, pharmaceutical, physiotherapy apparatus, obesity cure, healthcare, ophthalmic apparatus, medical device component, medical service, dental apparatus, disposable apparatus and others.

Local Associations

Korea Medical Devices Industry Association (KMDIA): http://eng.kmdia.or.kr/

Government Links:

Healthcare Procurement: [N/A]

Government Health Plans: [N/A]

Best Prospects [from the CCG if healthcare is listed]

The following were the top 10 medical devices imported to Korea in 2014:

  • Stent
  • Soft contact lens
  • Sight corrective ophthalmic lens
  • Dialyzers for hemodialysis
  • Knee joint prosthesis
  • MRI device
  • Analyzing products, Analyzing products, Chemiluminescence immunoassay(CLIA)
  • Intravascular catheter
  • CT system
  • IVD reagents for clinical immunochemistry

U.S. Commercial Service Contact Information

Name: Yoon-shil Chay

Position: Senior Commercial Specialist

Email: yoonshil.chay@trade.gov

Phone: 82-2-397-4439


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