Essential Medicine Supply Chain Under Strain... Urgent Need for National-Level Measures

35% of Medicine Supply Disruption Reports Tied to "Money Issues"
Heavy Reliance on Overseas Ingredients, Declining Profitability
Production Support, Stockpiling, and Drug-Pricing Reforms Needed

As disruptions in the supply of medicines continue to recur, calls are growing for essential medicine supplies not to be left solely to individual pharmaceutical companies’ production decisions and market forces. The pharmaceutical industry says low profitability makes it difficult to sustain production of essential medicines, while heavy reliance on imported active pharmaceutical ingredients leaves the supply chain vulnerable to disruption. This has heightened calls for urgent government action, including support for investment in production facilities, expanded stockpiles, and a more realistic system of drug-price compensation.

According to the office of Heo Jong-sik, a Democratic Party of Korea lawmaker on the National Assembly’s Health and Welfare Committee, 47 of the 135 reports of medicine supply disruptions or shortages in the first half of 2026 were attributed to economic factors, such as weak sales and profitability concerns, accounting for 34.8% of the total. Of these, 27 cases involved weak sales and 20 involved profitability concerns. The share of reports attributed to economic factors rose from 21.6% in the first half of last year to 34.8% in the first half of this year.

Essential medicines are indispensable for patient care, but supply disruptions are particularly common when the market is small or price competition is fierce. In addition to fever reducers and antibiotics, medicines such as labor-inducing drugs, treatments for pediatric emergency seizures, and treatments for rare and intractable diseases can limit patients’ treatment options if supplies are interrupted. However, the industry says that companies have limited ability to maintain production voluntarily when rising costs for raw materials, labor, and energy cannot be adequately reflected in drug prices.

Reliance on imported active pharmaceutical ingredients is also a serious concern. South Korea’s self-sufficiency rate for active pharmaceutical ingredients has generally hovered around 30% since 2000, but fell to 11.9% in 2022. The self-sufficiency rate for ingredients used in penicillin-based antibiotics is effectively 0%, while that for cephalosporins is only about 30%. A halt in overseas supplies of ingredients could disrupt domestic production of finished medicines, but replacing those imports with domestic production in the short term would be difficult.

The government has also taken steps to strengthen the public supply system for rare and essential medicines and introduce preferential drug pricing. The Ministry of Food and Drug Safety plans to switch rare and essential medicines that patients previously purchased directly from overseas to a government-run emergency supply program, gradually adding at least 41 products by 2030. Recent reforms to the drug-pricing system have also proposed preferential pricing and long-term support for medicines that require domestic sourcing of ingredients and the maintenance of production capacity.

However, the industry believes preferential drug pricing alone is not enough to maintain production capacity. It says subsidies, policy financing, and tax credits should support the construction and expansion of production lines for essential medicines and the replacement of aging equipment. For medicines that are difficult to replace when supply is disrupted, the government and private sector should also maintain adequate stockpiles. The industry stresses that systems for identifying potential supply interruptions early must be linked to production support to make these measures more effective.

A pharmaceutical industry official said, "Medicine shortages are not simply the result of production problems at individual companies; they stem from the combined effects of low profitability, reliance on imported ingredients, and a weakened production base. To ensure a stable supply of essential medicines, investment in production facilities, stockpiling, and drug-price compensation must be planned together, and key ingredients and production capacity must be managed at the national level."

This content was produced with the assistance of AI translation services.