STATUS of BIOTECHNOLOGY in KOREA - … · · 2013-12-02version of "Status of Biotechnology in Korea" a report on the current status and ... Status of BT-related Patent Applications

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STATUS ofBIOTECHNOLOGY in KOREA

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STATUS ofBIOTECHNOLOGY in KOREA

The world is currently undergoing a sweeping transformation toward a newscience and technology-driven socio-economic model, known as the knowledge-based society. The next stage of this transformative process is expected to be ledby biotechnology, paving the way for the bio-economy era. The bio-economicrevolution, eliminating diseases and extending life span, promises to bring aboutdramatic improvements in all areas of life, including food, medicine, newmaterials, energy and the environment.

In anticipation of the dawning bio-economy era, countries around the globe havebeen massively investing in biotechnology, considered as a strategic technologyfield of national importance. Bioindustry is widely projected to have a decisiveinfluence on the development and growth of the world economy, in the comingyears.

In South Korea, the first government-level initiative to support biotechnologydates back to as early as 1994. The BT Basic Fostering Plan(Biotech 2000), drawnup in 1994, successfully boosted research in the field. More recently, the

‘Biomedicene and organ project’has been included among the 10 next-generationgrowth engines, select industries to receive special government support, andgovernment R&D funding for biotechnology substantially increased, creating anenvironment conducive to the advancement of this field.

The Biotech Policy Research Center is pleased to release an English-languageversion of "Status of Biotechnology in Korea" a report on the current status andoutlook of South Korea’s biotech industry. We hope that the long-term prospectsof the korean biotechnology industry, korean national biotechnology fosteringsituation, korean biotechnology key statistics (investment, manpower, patents andpublications) and the overview of the related laws and regulations, contained inthis report, will prove useful pointers for policy researchers at home and abroad.

Oct. 2006

Byung-Hwan HyunDirector

Biotech Policy Research center

PPuubblliisshheerr’’ss NNoottee

1. Vision of National Biotechnology

Section 1 Long-term Prospects of the Biotechnology Industry

1. The Present Situation of the Biotechnology Industry

2. Prospects of the Biotechnology Industries

2. National Biotechnology Fostering Situation

Section 1 National Biotechnology Fostering Policies

1. Comprehensive Adjustment and Development Direction in BT

(Office of Science and Technology Innovation)

2. Support Policies for Biotechnology R&D (Ministry of Science & Technology,MOST)

3. Bio-industry Fostering Policies(Ministry of Commerce, Industry, and Energy,MOCIE)

4. Policies for Basic Science Promotion and Manpower Cultivation in BT

(Ministry of Education and Human Resources Development, MOE&HRD)

5. BT Fostering Policy in the Agricultural Field(Ministry of Agriculture & Forestry,MOAF)

6. BT Fostering Policies in Healthcare Field(Ministry of Health and Welfare,MOHW)

7. BT Fostering Policies in IT Field(Ministry of Information Communication,MOIC)

8. BT Fostering Policies in the Environmental Field (Ministry of the Environment,MOE)

9. BT Fostering Policy in Marine Biology and Fisheries

(Ministry of Maritime Affairs and Fisheries,MOMAF)

Section 2 Biotechnology Competitiveness Index Situation

1. Current Status of Investment

2. Current Status of Human Resources MOE & HRD,

Korean Educational Development Institute, Educational Statistics Annals

3. Current Status of Patents

4. Current Status of Publication

Contents

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3. Current Status of Biotechnology-Related Laws and Regulations

Section 1 Trends in Bio-safety

1. Introduction

2. Issues Surrounding the Protocol

3. Domestic Trends

Section 2 Trends in Bioethics-related Legislation

1. Outline

2. Regulations on Somatic Cell Cloning

3. Prospects and Tasks

Section 3 Trends in the BT Intellectual Property System

1. Outline

2. Status of BT-related Patent Applications

3. Expansion of Review Infrastructure in BT

4. Operation of the Microbe Deposition System

Section 4 Current Status and Suggestions for BT Products Approval Procedures

1. Introduction

2. Characteristics of, Approval and Permission Procedures for Bio Drugs

3. Domestic and Overseas Bio Drug Development Trends

4. Influences of Biotechnology on the Pharmaceutical Industry

5. Promotion of Safety Management for BT Products by KFDA

6. Present Tasks for the Industrialization of BT Products

7. Suggestions for Future Development

Section 5 BT Companies and Their Support System

1. Worldwide Trends

2. Overseas Situation

3. Domestic Trends

4. Development Challenges

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<Table 1-1-1-1> Biotechnology Industry and Its Estimated Market Size

<Table 1-1-1-2> Worldwide Sales of Major Medicines (2004)

<Table 1-1-1-3> Top 10 Domestic and Foreign Pharmaceutical Companies

<Table 1-1-2-1> The Status of Strategic Alliances by Year between Pharmaceutical

and Bio-tech Companies

<Table 1-1-2-2> Recently Formed Strategic Alliances between Major Corporations

<Table 2-1-1-1> Changed Procedure of R&D Budget Adjustment and Allotment

<Table 2-1-2-1> R&D Investment Results and Plans by Ministry

<Table 2-1-3-1> 13 Technology Fields in 4 Categories

(mid- and long-term technology development)

<Table 2-1-3-2> Status of the Structuring of 24 Bio Centers

<Table 2-1-4-1> Support Situation for a Pure Basic Research Group

<Table 2-1-4-2> Situation of Basic Science Research Support

<Table 2-1-4-3> Status of Support for Fostering Leading Scientists

<Table 2-1-4-4> Status of Support for Leading Basic Science Laboratories

<Table 2-1-4-5> Yearly Support for the BT Field in the BK21 Science

and Technology Category

<Table 2-1-4-6> Status of Graduates in the BT Field in the U.S. and Korea

<Table 2-1-5-1> Status of Worldwide Development of Genetically Modified Organisms

<Table 2-1-5-2> Status of Cultivating GMOs by Nation

<Table 2-1-5-3> Cultivation Trend of GMOs by Crop

<Table 2-1-5-4> Investment Results and Plan

<Table 2-1-5-5> Status of the Development of Transgenic Crops:

45 kinds in 18 farm products

<Table 2-1-5-6> Status of the Development of Transgenic Livestock:

5 breeds from 2 livestock species

<Table 2-1-5-7> Status of the Development of GMOs as Reported by Universities

and the Private Sector

<Table 2-1-5-8> Comparison of the Production Technologies for Novel Bio Drugs

<Table 2-1-5-9> Examples of LMOs

<Table 2-1-6-1> Status of Investment in R&D

<Table 2-1-7-1> Korea’s IT-BT Fusion Technology Level

Table Contents

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<Table 2-1-7-2> Prospects for the Demands and Services of the Future Society

<Table 2-1-8-1> Changes in the Field of ET

<Table 2-1-8-2> Investment plan for the ET21 project

<Table 2-1-8-3> BT-related Projects among ET21 Projects

<Table 2-1-9-1> BT R&D Investment Results in the Government and MOMAF

<Table 2-1-9-2> Major Marine BT Research Projects

<Table 2-2-1-1> Trends in the Size of the Government’s R&D Budgets(2002 ~ 2004)

<Table 2-2-1-2> Current budgetary status of promising new technology(2002 ~ 2004)

<Table 2-2-1-3> R&D Investment Plan by Ministry

<Table 2-2-1-4> Investment Status of MOST’s Major Projects

<Table 2-2-1-5> Status of MOCIE Investment in Major Technology Development Projects

<Table 2-2-1-6> Status of MOCIE Investment in Major Infrastructure Development Projects

<Table 2-2-1-7> Status of MOHW Investment in Major Projects

<Table 2-2-1-8> Status of MOAF Investment in Major Projects

(including agencies under the MOAF)

<Table 2-2-2-1> Bio-industry Human Resources (2003)

<Table 2-2-2-2> Employment Increase in Bio-industry by Education Level(1997 ~ 2003)

<Table 2-2-2-3> Perspectives on the need for BT human resources by technology level

<Table 2-2-2-4> Supply Increase Rate of BT Human Resources by Education Level

(1999 ~ 2004)

<Table 2-2-2-5> Supply and Demand Prospects for BT Human Resources by Education Level

<Table 2-2-2-6> Demand-Supply Ratios in BT Human Resources by Technological Level

<Table 2-2-3-1> Number of BT-related Patent Applications by Year in Korea

<Table 2-2-3-2> Number of BT-related Patent Applications in Korea by Nation and Year

<Table 2-2-3-3> Number of BT-related Patents Registered in the U.S. by Nation and Year

<Table 2-2-3-4> Technological Level by Nation Based on Patents Registered in the U.S.

<Table 2-2-3-5> Activity Index by Nation and Technology

<Table 2-2-3-6> Frontrunners in the Basic Bio-industry R&D Based on Patents Registered

in the U.S.

<Table 2-2-3-7> No. and Ratio of Patents by Ministry and Research Entity

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<Table 2-2-3-8> No. and Ratio of Patents with the U.S. Government

by Technology Field

<Table 2-2-4-1> Trends in the number of publications in Korea during the last 5 years

<Table 2-2-4-2> Lists of countries with a high average number of citations during the

5 years from 2000 ~ 2004

<Table 2-2-4-3> Current status of the average number of citations in 5-year periods

<Table 2-2-4-4> Percentage share in publications in BT area by country during the 5-year period

2000 ~ 2004

<Table 2-2-4-5> Current of No. of publications tn the BT area by country during the recent 5-year

period

<Table 2-2-4-6> Ratio of impact factor in the BT area in the last five years

<Table 2-2-4-7> Current status of the impact factor in the BT area in the last five years

<Table 2-2-4-8> Status of the Average Number of Citations in the BT Field

for each Five-year Period

<Table 3-1-1-1> Signatory Status of the Cartagena Protocol on Bio-safety126 members as of the

end of October 2005

<Table 3-1-2-1> Status of Ad Hoc Working Group’s Discussions

<Table 3-3-2-1> BT-related Patent Applications as Filed by Year

<Table 3-3-2-2> BT-related Patent Registration by Year

<Table 3-3-2-3> Technologies of State-led R&D Project-based

Domestic Patents as Applied for Filing

<Table 3-3-3-1> Number of Patents Involving Sequence List Applied for Filing

<Table 3-3-4-1> Domestic Microorganism Depositaries

<Table 3-4-3-1> Current Status of Domestic Bio-Pharmaceuticals

under negotiation as of 2005

<Table 3-5-1-1> 2004 Global Bio-industries centered on Public Companies

<Table 3-5-2-1> Status the Bio-industries in the United States as of 2004

<Table 3-5-2-2> 2004 Management Status of Major BT Companies

<Table 3-5-2-3> 2003 Blockbuster Bio Drugs

<Table 3-5-2-4> Japan’s Total Bio-industry Market in 2004

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<Table 3-5-2-5> Status of Europe’s Bio-industry as of 2004

<Table 3-5-3-1> Total Value of Supply and Demand in Korea’s Bio-industries in 2003

<Table 3-5-3-2> Market Volume of the Domestic Bio-industries in 2003

<Table 3-5-3-3> BT Sector Budget of the Korean Government

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Figure Contents

<Figure 2-1-1-1> Inter-ministerial Role in BT in line with the launch

of the New Administration System for Science and Technology

<Figure 2-1-1-2> System of National R&D Budget Adjustment and Allotment

<Figure 2-1-1-3> Diagram of Measures for the Comprehensive Management of

National Biological and Gene Resources

<Figure 2-1-2-1> Biotechnology Fostering Pursuit System

<Figure 2-1-2-2> Strategy for Pursuing the Basic Plans for Fostering BT

<Figure 2-1-3-1> Roadmap for Policies on Bio-industry Development Strategies

<Figure 2-1-5-1> By Nation in 2004

<Figure 2-1-5-2> By Crop in 2004

<Figure 2-1-5-3> Ratio of LMO Cultivation Area by Crop in 2004

<Figure 2-1-5-4> Worldwide Trends of the LMO Seed Market

<Figure 2-1-7-1> Prospect for Major IT-BT Fusion

<Figure 2-1-7-2> Policy Pursuit System of IT-based Fusion Technologies

<Figure 2-1-8-1> Changes in the Paradigms of ET Development Policies

<Figure 2-1-9-1> Major Research Contents of the Marine Bio 21 Project

<Figure 2-1-9-2> System for Pursuing the Project to Structure infrastructure

<Figure 2-2-1-1> Government’s Budget Status in the BT Field

<Figure 2-2-1-2> Government’s BT Investment Ratio by Ministry (2005)

<Figure 2-2-3-1> Categorization of Technologies in BT

<Figure 2-2-3-2> Trend in the Number of Patents Submitted

by Detailed Technology Area and by Year

<Figure 2-2-3-3> Trends in Research Direction (NPR) and TCT by Nation

<Figure 2-2-4-1> Current status of No. of publications in the BT area

by country during the recent 5- year period

<Figure 2-2-4-2> Trends in publications in the BT area by year

<Figure 2-2-4-3> The number of citations per BT paper for Korea and the world for the last five

years (2004 ~ 2005).

<Figure 2-2-4-4> Number of Average Paper Citations in the BT Field

for each Five-year Period

<Figure 3-3-3-1> Screens of PATOME, the domestic patent order search system

<Figure 3-3-4-1> Outline of the Procedure for Microorganism Deposition

and Patent Application

<Figure 3-4-2-1> Outline of the Process from Novel Drug Development to Approval

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1.Vision of National Biotechnology

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Long-term Prospects of the Biotechnology IndustrySection 1




17

Section 1

Long-term Prospects of the Biotechnology Industry


A. Definition and Scope

The OECD defines biotechnology as activities that apply scientific logic and technologies to

organisms, parts or part of an organism, products, and product-related models in the process of

modifying living organisms or non-living things with the aim of producing knowledge, goods, and

services (OECD data, 2004). Further, the scope of the bio-industry, or the biotechnology

industry, according to the OECD criteria, is classified into medicine, agriculture/livestock and

farming/fisheries, the environment, and energy markets. In particular, in the case of the

medicine market, products derived from both biotechnologies and medical and chemical

technologies account for 90% of the total market; the medicine market in the biotechnology

industry is understood to include small-molecule compounded medicines.

B. Biotechnology Industries and Their World Market Size

The biotechnology industries are expected to cover a wide range of areas, ranging from the

burgeoning medicine industry, solutions to food problems in the area of agriculture, livestock

and fisheries, the development of technologies for tackling environmental problems such as

environmental rehabilitation and waste treatment, the development of bio-energy to replace

dwindling petroleum energy, to bioelectronics and others. This report focuses on the medicine

industry which has the greatest added-value and is the acme of the biotechnology industry by

describing its market trends, latest technological developments, and future prospects.

1. Vision of National Biotechnology

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Bio-industries

<Table 1-1-1-1> Biotechnology Industry and Its Estimated Market Size

Major products Current stage Market size for 2010(USD 100 million)

Major participatorycorporations

Medicine

Biotechnologydrugs

Living modifiedorganisms

Basic principleshave been

discovered, andapplied research is

underway.

562

Pfizer, GSK, Amgen,

Genetech

Affimetrics,Medtronics

Source : Samsung Economic Research Institute reports, IMS health, Jain PharmaBiotech Report 2005, etc.

The worldwide biotechnology industry accounted for USD 540 billion in 2004, and hasbeen estimated at USD 600 billion for 2005 and as much as USD 1 trillion for 2010. Themedicine market accounts for 90% of the total biotechnology market <Table 1-1-1-1>.

The medicine market, representing over 90% of the biotechnology industry, sawmassive sales of major medicines last year alone as shown in <Table 1-1-1-2>.

Biotechnologicalapplications in

environment andenergy

Biotechnologyequipment

U-Health

Initialcommercialization

stage250

9,700Commercialized

Appliedtechnologiesaccumulated

Aastrom, ONYX,Vical

Cholesterolinhibitors,

erythrocyte growthaccelerators

Cell therapy, gene therapy,

transfusion drugs

Bio chips,operational systems

Image-baseddiagnosticequipment,analyzers

Microbialdecomposition,biotechnological

fuels

Shell, BP160Initial

commercialization stage

HP, GE, AgilentCommercialized

Crops, animals,fish

Commercialized 150

300

850

Monsanto, Syngenta

Biotechnologicalprocesses

Replacing existingprocesses

Cargill-Dow, BASF,Dupont


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Product name

<Table 1-1-1-2> Worldwide Sales of Major Medicines (2004)

Sellers Sales (USD 100 million) Applications Marketing year

Lipitor

Zorcor

Seretide

Zyprexa

Procrit / Eprex

Zoloft

Effexor

Plavix

Celebrex

Epogen

Aranesp

Enbrel

Rituxan

Viagra

Actos

Gleevec / Glivec

Pfizer

Merck

GlaxoSmithKline

Eli Lilly

Johnson & Johnson

Pfizer

Wyeth

Bristol Myers Squibb

Pfizer

Amgen

Amgen

Amgen

Genetech

Pfizer

Takeda

Novartis

108.6

52.0

45.0

44.2

36.0

33.6

33.5

33.3

33.0

26.0

24.7

19.0

17.1

16.8

16.9

16.3

Cholesterol inhibitor

Cholesterol inhibitor

Asthma treatment

Hypertension treatment

Schizophrenia

Gastric ulcer treatment

Anemia treatment

Depression treatment

Depression treatment

Thrombus resolvent

Arthritis treatment

Osteoporosis treatment

Anemia treatment

Anemia treatment

Arthritis treatment

Anti-cancer supplementary

Anti-cancer drug

Impotence treatment

Diabetes treatment

Anti-cancer drug

1996

1991

1998

1996

1990

1991

1993

1997

1998

1989

2001

1998

1997

1998

1999

2001

Source : Top 400 prescription drugs(Med Ad News, 2005)

C. Trends in Biotechnology R&D and Technologies

The biotechnology industry, led by the United States, Great Britain, Japan, andGermany, is witnessing fierce competition between the different corporations. The sixleading nations have invested 88% of the world’s total R&D costs in this sector, and the20 leading corporations, most of which are situated in the United States, represent 60% ofthe total market.

38.8

17.4Neulasta Amgen

Fosamax

Nexium

Norvasc

Merck

AstraZeneca

Pfizer

31.6

44.6

2000

2002

1995

1992

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Multinational pharmaceutical companies based in the United States are increasingly

stepping up investment in R&D; in 2004, they invested a massive USD 38 billion, greater

than the U.S. National Institute of Health’s total R&D investment of about USD 28 billion.

However, compared with the ever-increasing investment in R&D, these companies come

up with a smaller number of products that successfully undergo novel drug development

and commercialization, and thus, to ensure efficient R&D, form alliances with

biotechnology ventures to increase investment in securing pipelines. <Table 1-1-1-3>

shows the top ten domestic and foreign pharmaceutical companies as of 2004 in terms of

R&D costs compared with sales.

The focal social issue most closely related to the development of the bio-industries

concerns the completion of the human genome project, and its direct and rapidly

projected benefits will be channeled into the medicine industry. Although the medicine

market as of 2005 exceeded the already massive USD 500 billion, the era that follows the

genome project will see an unfathomably large figure. Thus, research into new medicines

for the treatment of diseases and enhancing the quality of life by exploiting the outcome of

the human genome project could well become the area that creates the largest economic

value of the 21st century.

Ranking

<Table 1-1-1-3> Top 10 Domestic and Foreign Pharmaceutical Companies

Company name Investment(million won)

Ratio (%) Company name

1

2

3

4

5

6

7

8

9

10

Average

LG Life Sciences Co., Ltd.

Hanmi Pharmaceutical Co., Ltd.

Yuyu, Inc.

Boryung, Inc.

Daewoong Pharm.Co., Ltd.

Kun Wha Pharmaceutical Co., Ltd.

Yuhan Corporation

Bukwang Pharm. Co., Ltd.

Ildong Pharmaceutical Co., Ltd.

Daewon Pharm. Co., Ltd.

52,103

26,405

3,737

4,217

19,870

3,135

19,246

5,798

9,822

1,913

24.90

8.33

6.52

6.46

6.46

5.66

5.65

5.12

4.98

4.77

Eli Lilly

AstrZeneca

Aventis

Sanofi-synthelabo

Pfizer

Novartis

F Hoffman-Ra

Merck

Wyeth

GlaxoSmithKline

Source : Parliamentary probe data on Korea Health Industry Institute, 2005

2,350.2

3,451.0

3,311.2

1,490.3

7,131.0

3,756.0

3,478.0

3,178.1

2,093.5

4,531.6

18.7

18.3

16.4

16.4

15.8

15.1

15.0

14.1

13.2

13.0

Domestic

Investment(USD 1million )

Ratio(%)

Foreign

7.2% 15.6%


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With the completion of the human genome project and the development of innovativenew technologies such as bio-infomatics, genomics, proteomics, and chemical genomics,research into novel drugs is constantly evolving innovative systems and technologies.First, the research and development of novel drugs generally begins with the explorationof target proteins. The current relatively low number of 500 target proteins for diseasetreatment will rapidly increase to 3,000 - 4,000. However, the information acquired onthese proteins cannot provide information on the substances that directly adjust thefunctions of these proteins. Likewise, many target proteins used for developing noveldrugs have been discovered as a result of these research trends, but the number of noveldrugs that can impact these target proteins has yet to increase. The situation facing theglobal medicine industry has been described as ‘Targeting the rich but leading a poorenvironment’. (Science, 2003) In a word, the targets are plentiful, but the discovery ofproper leading substances for developing drugs requires a major boost. Geneticinformation alone is insufficient to boost the benefits, but its added value can be madeeffective by the development of related drugs, although the emphasis on leadingsubstances - a field of chemistry - looks out of place in this age of biotechnology. In 2002,the U.S. NASDAQ Stock Market saw share prices of the companies engaged in bio-infomatics and genomics take a nosedive, echoing such a situation. This would also implythat the ultimate objective of biotechnology is to develop novel drugs for intractablediseases, and thus that the more biotechnologies are developed, the more important willcompounded drugs that are easy and convenient to take become.

Now that human genomic sequences have been discovered, what kind of researchshould follow on from this- The U.S. and Japanese governments are investing hugeamounts of funding in structural genomics with the aim of revealing the structures ofcrucial proteins. In the United States, NIGMS has invested USD 150 million in nineresearch centers based in universities since 2000. Meanwhile, in 2001, Japan formed aconsortium comprising six government and private research centers with a larger sizethan those of the U.S., and has invested intensively in research into the structures ofmembrane proteins, as well as human and mouse proteins. As such, Japan has sought toestablish new technologies in this category, as well as attempting to dominate informationcollection in the field of structural geomics. Since information regarding protein structuremay raise concerns about intellectual property rights, it is crucial to establish competitivetechnologies in this category. A multinational pharmaceutical company generally investsan average of UKL 800 million (1.5 trillion won) over a period of 12 years in developingnovel drugs. Candidate substances have a less than 10% probability of being developedinto novel drugs. However, if one uses genetic information and the structures of disease-related proteins, it is possible to cut the time taken to develop a novel drug from thecurrent five years to between 1-3 years. Furthermore, use these technologies may beused to obtain an atomic-level view of the structures of the target proteins as to which


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drugs will work, and information technologies may also be used to design novel drugs,thereby reducing failure costs and potential side effects. Against such a backdrop, thetechnology designed to develop novel drugs using structural geomics will greatly impactthe development speed and competitiveness of the 21st century medicine industry, andits economic value is consequently worth hundreds of billions of dollars.

D. Changes in the Biotechnology Industry Market

Changes in the biotechnology industry include the following characteristics according toa 2005 Ernst & Young report (U.S.). First, the biotechnology industry is growing, takingadvantage of the strengths of all nations around the world and transcending borders. Forinstance, China and India are being used as clinical tests by multinational pharmaceuticalcompanies. Strategic alliances and mergers and acquisitions increased to 480 cases, up14% from 2003. Second, the development and application of innovative biotechnologies isspurring industrial changes. Structure-based drug discovery and high throughputscreening technology have cut the drug development time and greatly enhanced theefficiency in discovering drugs with fewer side effects and excellent efficacy, as well asfueling innovation in the whole drug market. Also, as innovative new biotechnologies havebrought innovation to the manufacturing processes in the traditional chemical industry, theexisting base industry, by utilizing the development of genetically modified enzymes, sothey are impacting the development of other existing industries. Third, the unveiling ofnew technology-based products has helped overcome the limitations of the products. Thedevelopment of patient-tailored drugs is having a crucial effect on the medicine industry.For instance, Glivec, a drug which treats leukemia by targeting a specific target protein, isa typical tailored medication which has now secured a solid presence in the leukemiadrug market (sales of USD 1.6 billion in 2004). Together with this drug, vigorous effortsare being made to develop target therapies using humanized antibody technologies anddevelop new anticancer drugs with fewer side effects.


A. Advanced Nations at the Growth Stage; Korea at the Take-offStage

Of the novel drugs sold over the past five years, over 20 products are expected to postsales of USD 500 million each in 2005. In particular, as proven by Pfizer’s cholesterollowering drug Lipitor garnering sales of over USD 10 billion, each novel drug’s economicvalue is enormous. Furthermore, the sales of over USD 1 billion generated by a novel


23

drug surpass those obtained by exporting 3 million units of Hyundai’s Sonata sedan. As of2004, the category of novel drugs in the pre-clinical or advanced stages numbered 5,565and, of these, the category of novel drugs in the upper 15-level of efficacy in the thirdclinical phase numbered 769. Sales of some of these medications were expected to excelUSD one billion each, signaling the continued strength of the novel drug market evenamid the lowered success rate of novel drug development.

In the medicine market, which represents over 90% of the biotechnology market, themarket for anti-cancer drugs, antibiotics and other existing drugs is important, but themarket for novel drugs aimed at improving life quality for treating ageing, stress, obesity,and Alzheimer’s disease, and bolstering memorization ability, is likely to be even morecrucial. For instance, novel drugs such as Sanofi Aventis, the soon-to-be-marketedobesity treatment drug, Acomplia, and Pfizer’s and Neurocrine Biosciences’ sleeping pill,Indiplon will each generate an annual turnover of USD 6 billion at their expected peak.This achievement was made possible by the development of cutting-edge biotechnologiesthrough research into geonomics and protein structure and function. Given the necessityfor such state-of-the-art biotechnologies, the diversity of human desires, and the ageing ofsociety, efforts are underway to discover drugs that will improve life quality and fulfill theultimate human goal of pursuing a healthy, happy life. These novel drugs are known as‘quality-of-life improving drugs’ or ‘happy drugs’. These happy drugs have huge potentialmarkets worldwide, thereby sufficiently meeting the pharmaceutical corporations’ desirefor investment. The global quality-of-life improving drugs market was estimated last yearat USD 50 billion, including anti-depressant drugs worth USD 12.6 billion, thusrepresenting about 10% of the total drug market. Also, the happy drug market grew by awhopping yearly average of over 12%, compared to the whole medicine market growthrate of 7%, and this is estimated to expand to USD 62.7 billion for 2005 and USD 98.5billion by 2010. The obesity treatment drug Xenical, which debuted in the U.S. market inFebruary 2001, sold in quantity to the tune of 10 billion won in a time span of 100 days.Viagra, meanwhile, having made its debut in the market in October 1999, has sinceformed a huge market with annual sales of 18 billion won, while the hair loss treatmentdrug Propecia has created a large market with annual sales of 7 billion won in an equallyshort span of time. In the past, people believed such symptoms to be incurable, andhence did not look for treatment because such symptoms were not life-threatening. Now,however, times are changing. In the 21st biotechnology age, people can pursue lifestylesfocused on staying young and healthy rather than concentrating on securing foods andsurvival, as was the case in the past. Furthermore, since obesity, stress, and othersymptoms are closely related to Alzheimer’s disease, diabetes, cancers, and variousother diseases, these symptoms, if not cured, will inevitably lead to serious life threats. Inthe 21st century, these symptoms are being categorized along with serious diseases, andadvanced pharmaceuticals companies, having understood this, are positively striving to

24


discover novel drugs aimed at improving peoples’ life quality and enriching their lives. The related domestic corporations have yet to bolster their success experience in and

assurance of biotechnologies, particularly in terms of the development of novel drugswhich requires bold investments. However, with the government’s strong commitment tothe growth of biotechnologies as a growth engine, the ever expanding corps ofbiotechnologists, and the presentation of superior related research papers, highexpectations are increasingly being placed on the biotechnology industry. However, thissector is still very much at the take-off stage, since the biotechnology-based drugs crucialfor human lives take a few years to research and develop, and subsequently require anadditional ten years to conduct pre-clinical tests using animals, as well as clinical tests inphases 1, 2, and 3 in which humans are used to secure the safety and desired effect ofthe drugs involved. This makes direct comparison with other industries meaningless interms of the time required, all the more so because the biotechnology industries depend,for their success, on superior personnel, excellent basic and applied technologies, andlong-term investments. However, in 2003, LG Life Sciences became the first Koreancompany to obtain approval for its novel drug Factive from the U.S. FDA, broadcastingworldwide the fact that Korea has the potential to develop novel drugs.

Biotechnology industries, as the state’s primary growth engine, should find the beststrategies to discover world-class new products and enter advanced markets. In the noveldrug industry with the highest added value, it is the venture firms in biotechnologies ratherthan the existing pharmaceutical companies and large corporations that are currently aretaking on bold challenges. Likewise, Korea’s biotechnology industries are developing byfostering venture firms in biotechnologies and thus discovering world-class novel drugs. Inresponse to such efforts, the government, for its part, has left open the door to the tech-heavy KOSDAQ stock market (like the U.S. NASDAQ) to the venture firms in technologieswhich have yet to boost their profitability, thus injecting huge private funds into the venturefirms on top of the government’s limited budgets for research and helping them evolveinto world-class biotechnologies venture firms. So, ten years from now, Korea’sbiotechnology industries will become the nation’s effective growth engine for the future.

B. Strengthening of Alliances and M&A between DifferentCorporations (biotech-pharmaceutical or biotech-biotechcompanies) to boost competitiveness

Since big pharmaceutical companies suffer low productivity in the development of noveldrugs, while venture firms in biotechnologies are improving efficiency in this business, thenumber of mergers and acquisitions and strategic alliances between different biotech-pharmaceutical companies, and biotech-biotech companies is increasing all the time.


25

<Table 1-1-2-1> shows the status of strategic alliances by year between pharmaceutical andbio-tech companies, while <Table 1-1-2-2> shows the recently formed strategic alliancesbetween major corporations.

Year No. of alliances

1995 ~ 1996

1997 ~ 1998

1999 ~ 2000

2001 ~ 2002

2003 ~ 2004

577

645

631

641

813

Source: Recombinant Capital (in the case of 2003 ~2004; the data are based on a nine-month period.)

<Table 1-1-2-1> The Status of Strategic All iances by Year betweenPharmaceutical and Bio-tech Companies

Transferer oftechnology

<Table 1-1-2-2> Recently Formed Strategic All iances between MajorCorporations

Transfereeoftechnology

Transferredtechnology Development stage

Royalty ontechnology

transfer

Tularik

Array

Pacific Pharmaceuticals

Co., Ltd.

Antisoma

Medivir

Zealand Pharma

Biovitrum

Bristol MyersSquibb

Eyetech

Neurocrine

Amgen

AstraZeneca

Roche

GlaxoSmithKline

Aventis

Amgen

BoehringerIngelheim

Pfizer

Pfizer

Anticancer drug

Anticancer drug

Anticancer drug

Infectious disease

Diabetes drug

Obesity

Eye disease

Insomnia drug

Initial stage

Pre-clinical

Clinical

1st clinical phase

1st clinical phase

2nd clinical phase

3rd clinical phase

3rd clinical phase

95

500

99.5

110

521

1,340

400

*Euro. **Including a research fund of USD 14 million for two years.Source: Press releases from the respective companies

75

10

6.56

6.9

10

86.5

75

100

Upfront(Equity

investment)

Schwarz Painkiller Pre-clinical 107.5* 3.25*

Merck Hyperlipidemia drug 2nd clinical phase 375 100**

Bristol MyersSquibb Anticancer drug 3rd clinical phase 2,000 1,000

AIDS drugMedivir 2nd clinical phase n / a 122*

ImClone

(Unit: USD million)

2. National Biotechnology

Fostering Situation

27

National Biotechnology(BT) Fostering PoliciesSection 1

Biotechnology Competitiveness Index SituationSection 2

1. Comprehensive Adjustment and Development Direction in BT (Office of Science and Technology Innovation)



4. Policies for Basic Science Promotion and Manpower Cultivation in BT(Ministry of Education and Human Resources Development, MOE & HRD)





9. BT Fostering Policy in Marine Biology and Fisheries (Ministry of Maritime Affairs and Fisheries,MOMAF)

1. Current Status of Investment2. Current Status of Human Resources MOE & HRD,

Korean Educational Development Institute, Educational Statistics Annals

3. Current Status of Patents 4. Current Status of Publication


29

Section 1

National BT Fostering Policy

1. Comprehensive Adjustment and Development Directionin BT (Office of Science and Technology Innovation)

A. Introduction of the New Science and Technology AdministrationSystem

As of 2003, Korea had become the world’s 11th-largest economy following 40 years ofunprecedentedly high growth rates. This achievement has been attributed to government-led economic development plans, ample labor resources, low-interest foreign borrowing,and the introduction and amelioration of foreign technologies.

Overall, the nation’s capacity to develop source technologies, however, is still lacking,and despite the government’s continued expansion of R&D investments, the volume ofinvestment stood at only one-eighteenth and one-eighth of that of the Unites States andJapan, respectively, in 2005. Although Korea has fostered substantive manpower in thefields of science and technology, she has yet to boost its quality. College-bound studentsavoid choosing science and technology as majors, thus posing a pressing social issue.

To overcome this situation and boost its per-capita GDP to over USD 20,000 on the roadto achieving status as an advanced nation, Korea is pushing to develop a NationalInnovation System aimed at achieving technological innovation at the national level inorder to monitor its current position accurately and formulate the most suitable growthstrategies. This strategy seeks to make the shift to an innovation-led economy aimed atquality growth backed by state-of-the-art technologies and knowledge, thereby pinpointingnew growth-engine industries and advancing existing industries to the highest degree.

30


Last year’s reshuffle of the science and technology administration system forms a part of

these efforts, and aims to put science and technology at the center of the bid for achieving per-

capita GDP of USD 20,000, improve the quality of Korea’s micro-economies involving science

and technology-related industries and manpower, and thus strengthen the base of the nation’s

macro-economies. With this reshuffle of the system, the Ministry of Science and

Technology(MOST) has been upgraded to a ministry with its minister serving as a deputy prime

minister, and is now empowered to pursue policies on science and technology consistently and

efficiently according to national objectives. Furthermore, with the inauguration of the Office of

Science and Technology Innovation, the National Science and Technology Council has been

empowered to effectively exercise a coordination role. The Office of Science and Technology

Innovation has undertaken to oversee and coordinate innovation policies in industries,

manpower, and the regions in connection with policies on science and technology innovation,

as well as adjust and allocate national R&D budgets according to mid- and long-term national

development objectives. This move has fundamentally changed the nation’s 40 years-old

administration system of science and technology, thereby leading to a fundamental change in

the nation’s economic development strategies. Aiming at bolstering investment efficiency in

overall national R&D, the Office of Science and Technology Innovation is responsible for

adjusting policies, surveys/analysis/evaluation, and adjusting and allocating R&D budgets.

Under this new administrative system, intended for the BT field as well as science and

technology, related ministries share their respective roles with the Office of Science and

Technology Innovation overseeing the operation <Figure 2-1-1-1>.

<Figure 2-1-1-1> Inter-ministerial Role in BT in line with the launch of the NewAdministration System for Science and Technology


31

B. Changes in the Procedure for Adjusting and AllottingBudgets in the BT Field

With the launch of this new administration system, the procedure for adjusting and

allotting budgets in various fields including BT has been shifted in order to efficiently

utilize R&D budgets.

At the end of every January, each related ministry will submit mid- and long-term plans

in the BT field, the BT Expert Committee will review them, and the Office of Science and

Technology Innovation will consider the national strategic objectives and other factors to

establish budget limits by program. Afterwards, the headquarters will pool budget

requirements including those for other technology fields, set the total R&D budget size,

consult with the Ministry of Planning and Budgeting, and then determine the budget limit

by ministry. On the basis of these budgetary measures, each ministry will draft budget

requirements for submission by the end of May. Then, these requirements will undergo

technical review by the technical committees by the end of June and review by the R&D

Budget Review Committee by mid-July to fix rough budgets for the related programs.

These budgets are reviewed by the Planning and Budget Adjustment Committee and the

Steering Committee under the National Science and Technology Council, and the council

finally thereafter confirms the budget adjustment and allotment plan before sending it to

the Ministry of Planning and Budgeting. This ministry reflects it in its budgetary plans for the

next year <Table 2-1-1-1>.

Changes in the procedure of budget adjustment and allotment have entailed the

strengthening of survey, analysis, and evaluation functions. From February 1992, the

National Science and Technology Council conducted reviews at the program level, but

encountered difficulties in undertaking an in-depth review due to limited time and

manpower. To resolve this difficulty, the council, under the new system, shares certain

members of the evaluation subcommittees aimed at evaluating the purposes of the

programs and of the R&D Budget Review Committee for adjusting and allotting budgets to

reflect the survey, analysis, and evaluation results in the adjustment and allotment of the

R&D budgets. In addition, the technical review results issuing from the technical review

committees are reviewed by evaluation subcommittees according to the purpose of

programs for an in-depth evaluation <Figure 2-1-1-2>.

32


Procedure Timeline

Receive mid- and long-term business plans

Hold R&D budget review special committee meeting

Determine each ministry’s budget limit, and send it to each ministryand the Ministry of Planning and Budgeting

Receive program requirements from each ministry

Hold program presentation sessions and review by the technical reviewcommittees

Technical review committees write review results

R&D Budget Review Committee conducts reviews

Planning and Budget Adjustment Committee under NSTC

Steering Committee under NSTC

NSTC confirms R&D budget adjustment and allotment plan

End of January

End of February - early March

End of May

End of June

Early July - mid-July

End of July

End of July

End of August

<Table 2-1-1-1> Changed Procedure of R&D Budget Adjustment and Allotment

The Office of Science and Technology Innovation is also responsible for categorizingcore R&D programs in the BT field and analyzing and reviewing them, as well as forreviewing the outcome of adjusted and allotted budget execution.

The changed procedure for the adjustment and allotment of budgets in the BT field hasstrengthened the link between national development strategies and R&D budgets with theaim of bolstering future national competitiveness.

<Figure 2-1-1-2> System of National R&D Budget Adjustment and Allotment

End of March

Early June - end of June


33

C. Major Adjustment Cases in the BT Field

The launching of the new administration system of science and technology hasstrengthened the function in the government to adjust and allot R&D budgets and attunethem with the national development strategies. Vigorous efforts by numerous ministriesregarding BT R&D programs have brought about substantial growth in this field, but lesseffective cooperation between ministries in certain programs has been made. Given thatthe BT field is very diverse and that its R&D projects are speedily expanding, there hasbeen an increasing need for its adjustment. When there is a need among ministries toadjust policies in the BT field, the Office of Science and Technology Innovation gathersthe views of the related ministries and civilian experts, formulates solutions, and submitsthem to review by science and technology-related ministers’ meetings or the NationalScience and Technoloy Council(NSTC) in order to determine policies. The governmentthen positively reflects budgetary requirements in the R&D budget adjustment andallotment procedure to help fulfill policy goals.

The Office of Science and Technology Innovation presented efficient direction for BTR&D efforts jointly with eight BT ministries at the 7th science and technology-relatedministers’ meeting in May 2005. Subsequently, it presented at the 12th science andtechnology-related ministers’ meeting in November an effective BT R&D strategy toensure an efficient, differentiating cooperative and linkage system among the relatedministries to comprehensively coordinate, plan, and evaluate BT R&D efforts. Theconference established three major directions: BT R&D; the facilitation of BT industries;and enhancing public awareness of BT. It also established seven strategies: 1) tostrengthen the system to adjust BT R&D policies; 2) to invest vigorously in the world’sleading and most promising fields; 3) to formulate BT budget operation methods andestablish a system to evaluate performance; 4) to formulate strategies to facilitate the bio-industries; 5) to expand across-the-board infrastructure through strengthened inter-ministerial linkage; 6) to analyze policy impact and reshape circulation systems aimed atcreating new industries; and 7) to bolster the national awareness of BT.

For specific examples of such adjustment efforts, the Office of Science and TechnologyInnovation formulated national management measures for biological and gene resources,expanded the budget of the Korea Food & Drug Administration to ensure safety in foodsand drugs, and increased budgets for developing technologies to eradicateBursaphelenchus Xylophililus - a national issue. Furthermore, the Office of Science andTechnology Innovation is currently striving to formulate strategies to oversee and adjustinter-ministerial R&D efforts for the development of ‘novel drugs’.

The national management measures for biological and gene resources were designed

34


as a positive response to the stiff international competition to secure biological resourcesand to other domestic and overseas environmental changes, and to increase the value ofbiological resources as national assets by developing a system to efficiently preserve andutilize the biological resources currently managed by the various ministries and managethe related information. Each ministry is allowed to maintain the current system tomanage individual working-level fields and individual information, while the Office ofScience and Technology Innovation, through the National Biological and Gene ResourcesTotal Management Committee, which comprises personnel from the related ministries, isresponsible for comprehensively managing the information <Figure 2-1-1-3>. The Officeof Science and Technology Innovation is also pushing to establish a National BiologicalResources Information Center, amend the Biotechnology Fostering Law, and reshape thelaw aimed at preventing the overseas drainage of domestic biological resources in eachministry.

For another example of the adjustment efforts, the budgets for the KFDA R&D effortswere expanded to ensure safety in foods and drugs. The KFDA R&D budget jumped from44.4 billion won for 2005 to 54.6 billion won for 2006. The increase ratio is 23% year-on-year, and is far above the average increase of 15% for the nation’s total R&D budget for2006. The drastic boost given to the budget, based on a technical review of the BT-related R&D programs, reflects the nation’s high requirements for enhanced life quality insupport of the development of technologies for evaluating safety in foods and drugs.

<Figure 2-1-1-3> Diagram of Measures for the Comprehensive ManagementofNational Biological and Gene Resources


35

A good example of such budgetary boosting can be found in the massive R&D budget

expansion aimed at addressing the problem of Bursaphelenchus Xylophililus.

Bursaphelenchus Xylophililus, dubbed the ‘HIV of the pine tree’, causes serious damage

to Korea’s pine trees. The insect first found its way into Korea in 1988, hitting Mt.

Geumjeong in Busan. Since then, the infection has reached every area, as the insect

moved northwards to Andong, North Gyeongsang Province, as of August 2005, wreaking

damage in 22,525 ha of forested areas. In the case of Japan, the insect first appeared in

1905, and a special law was enacted in 1977 to cope with the insect, but its pine trees are

now in danger of total destruction. Given the rapid spread and the size of the insect

damage, Korea needs to take action at the national level. The related R&D budget for

2006 was adjusted to increase from the originally requested 950 million won (650 million

won for the Korea Forest Service and 300 million won for agricultural technology

development programs at the Ministry of Agriculture and Forestry) to a whopping total of

5.4 billion won, and the Korea Forest Research Institute was advised to lead the formation

of a project team in which industries, academia, research centers, and the government all

participate. Currently, the Ministry of Agriculture and Forestry, the Korea Forestry Service,

and the Korea Forest Research Institute are currently discussing the formation of the

team and the intended direction of the project.

The government has been pushing since February 2005 to establish inter-ministerial

R&D strategies by considering the characteristics of the development of novel drugs that

require 10-15 years of long-term investment, and working together across industries,

academia, research centers, and the government in order to heighten the efficiency of the

R&D efforts. Korea’s pharmaceuticals market size was about 1 trillion won as of 2003, the

world’s tenth-largest market. However, compared to the market size, domestic

pharmaceuticals are excessive at over 200, and their R&D investment costs represent

only 3 - 5% (10 - 20% in the case of advanced pharmaceutical companies) of sales. As

such, most of them have not yet reached the critical mass for developing novel drugs.

Support for research costs for new drug development in Korea began with the Ministry of

Science and Technology’s leading technology development projects. As a result, 2005

saw the development of eleven domestic novel drugs (including Stillen capsules

manufactured by Donga Pharmaceutical Co.), and 2004 saw the development of Factive,

making Korea the eleventh nation to develop novel drugs. However, the development of

novel drugs still requires further invigoration. To cope with the situation, as of February

2005, the government reached an inter-ministerial agreement, and is discussing the

agenda, including ways to boost efficiency at the developmental stage, plans to identify

the status of the development of novel drugs, related ministers’ roles, and ways to link

inter-ministerial research efforts. In light of the fact that efforts to put BT R&D to practical

use clearly result in the development of novel drugs, related ministries such as the

36


MOSC, MOCIE, and Ministry of Health and Welfare, are working together to make BT

R&D projects successful by maximizing efficiency on the basis of overall national

strategies within the given R&D budget.

D. Direction for Comprehensive Adjustment in the BT Field

While 2005 saw the launch and settlement phase of the new science and technology

administration system, 2006 will witness a phase of maturity for the system. Whether the

system takes root and becomes a locomotive factor in reaching per-capita GDP of USD

20,000 in Korea will depend on whether the various related systems formulated this year

are established and operated effectively or not. At this maturity stage, efforts are essential

to comprehensively adjust the various R&D programs in the various technology fields.

The ever-developing biotechnologies represent both a good opportunity and a crisis alike

for Korea, and should be utilized as an effective growth engine for enhancing the people’s

life quality and national economic development.

With the mandate of biotechnologies in the current era, the Office of Science and

Technology Innovation will continue its efforts to comprehensively adjust BT policies

across ministries, effectively adjust and allot R&D budgets in the BT field, and, in

particular, conduct comprehensive and in-depth analysis in the fields of geonomics,

proteomics, brain research, basic medical science, and disease-related research.

Regarding R&D programs in the agricultural field, another axis of BT, in addition to the

basic life sciences and healthcare fields, the Office of Science and Technology Innovation

will formulate effective strategies to respond to the rapidly changing external

environments through systematic review and inter-ministerial discussions. The Office of

Science and Technology Innovation will also prioritize agricultural R&D programs, set the

investment direction, and differentiate the support for R&D budgets.

The Office of Science and Technology Innovation will ascertain worldwide research and

policy trends in the field of fast-developing new fusion technologies, analyze the R&D

projects in fusion technologies of the various ministries, and formulate policies to support

this field.

Lastly, the Office of Science and Technology Innovation will review the causes of the

delay in the industrialization of the BT fields, and formulate strategies to come up with a

virtuous cycle involving R&D, industrialization, and reinvestment.


37


A. Summary

BT fostering by the government began when the Ministry of Science and Technologygave its support to a specific research and development project in 1982, selecting BT as acore strategic technology. The Ministry then prepared a legal basis for BT fosteringsupport by passing the "Genetic Engineering Promotion Law" in 1983 (currently the"Biotechnology Fostering Law"), on the basis of which it established the "GeneticEngineering Center" (known as "KRIBB") at KIST and launched a full fostering supportprogram.

The specific research development project broadens this support, establishing researchsupport programs such as the Leading Technological Development Project (G7), theFocused Research Development Project, the National Policy Research DevelopmentProject, the National Research Laboratory Project (NRL), the 21st Century FrontierResearch Development Project, the Nano-Bio-based Technology Development Project,as well as research cooperation centers within the universities such as the ExcellentResearch Center (SRC, ERC), National Core Research Center (NCRC), and the BasicMedical Science Research Center (MRC).

In December 1993 the Ministry also established the BT Basic Fostering Plan (Biotech2000, 1994 ~ 2007) involving the participation of 8 departments. The 3rd stage (2002 ~2007) of the plan is now in operation, backed by annual working plans. In order topromote research into the human brain, the Ministry also enacted the "Brain ResearchFostering Law", established the Basic Plan for the Fostering of Brain Research in 1998(Braintech 21, 1998 ~ 2007), and is elaborating annual working plans.

B. R&D Support System

1) Legal and Institutional Foundations

(A) Biotechnology Fostering LawThe Ministry of Science & Technology enacted the "Genetic Engineering Technology-

Promotion Law" in order to foster genetic technology more effectively by creating aresearch foundation, and to contribute to the healthy development of the nationaleconomy by promoting industrialization.- In 1995, the Ministry passed the 3rd amendment

38


so as to expand the scope of the application of the law from genetic technology to BT,and renamed the Law as the "Biotechnology Fostering Law".

With the increasing importance of, and concern surrounding, genomes, the basis of BT,the ministry has pursed the eighth amendment of the Law by including genomics in theBT field and expanding BT-related ministries to include the Ministry of Maritime Affairsand Fisheries and the Ministry of Information and Communication. The BiotechnologyFostering Law aims to create the base for BT research, effectively foster and develop BT,facilitate the industrialization of such developed technologies, and thereby contribute tothe sound development of the national economy. Its main content is to formulate basicplans for fostering BT as well as yearly execution plans, install and operate aComprehensive BT Policy Review Committee, and implement BT fostering measures andpolicies in eight ministries (Ministry of Education and Human Resources Development,MOST, MOAF, MOCIE, MIC, MOHW, MOE, and MOMAF).

(B) Brain Research Fostering LawThe Ministry enacted the Brain Research Fostering Law in June 1998 in order to foster

more effective research into the brain with the creation of a foundation for brain researchfostering, and to contribute to the improvement of national welfare and the healthydevelopment of the national economy by promoting the industrialization of developmentaltechnology.

The Brain Research Fostering Law aims to create the base for promoting brainresearch, to more effectively foster and develop brain research, to facilitate theindustrialization of corresponding developed technologies, and to thereby contribute to theenhancement of national welfare and the sound development of the national economy.The main content of the Law consists of the establishment of a Basic Plan for theFostering of Brain Research and an annual working plan, the establishment and operationof a BT Comprehensive Policy Deliberating Committee, the expansion of brain researchinvestment, and the pursuit of BT fostering measures by five ministries (The Ministry ofEducation and Human Development, The Ministry of Science and Technology, TheMinistry of Commerce, Industry, and Energy, The Ministry of Information andCommunication, and The Ministry of Health and Welfare).

(C) BT Comprehensive Policy Deliberating Committee, Brain Research FosteringCommittee

In order to establish a basic plan for BT fostering-and undertake the task of itsimplementation and coordination, the BT Comprehensive Deliberating Committee, chairedby the Minister of Science and Technology and attended by the Deputy Ministers of eightministries and various specialized civil commissioners, was created.


39

The Brain Research Fostering Deliberation Committee, created under MOST, chaired bythe Vice Minister for Science and Technology, and composed of general-directors fromthe four related ministries and civilian personnel, has been designed to deliberate theestablishment of basic plans for brain research fostering, budget expansion measures,and the development and exchange of brain researching staff, as well as define mattersdelegated under the Brain Fostering Law and matters necessary for implementing them,thus deliberating and adjusting important matters concerning brain research.

2) The Korea Research Institute of Bioscience and Biotechnology (KRIBB)

MOST, in accordance with the Genetic Engineering Fostering Law, established theGenetic Engineering Research Center staffed with 30 personnel as an attachment ofKIST in February 1985, thereby initiating the support and nurture of genetic engineeringresearch in earnest. Afterwards, in December 1990, MOST renamed the center as theGenetic Engineering Research Institute as an attachment to KIST. And, with the GeneticEngineering Promotion Law amended to the Biotech Fostering Law, the institute wasrenamed as the Postech Biotech Center as an attachment of KIST in March 1995. In May1999, this center became an independent Postech Biotech Center under the KoreaResearch Council for Fundamental Science and Technology. In January 2001, this centerwas promoted to the Korea Research Institute of Bioscience and Biotechnology under theKRCF, and it is currently a state-invested research center under MOST. Its role is toresearch proteomes, cell bodies, bio drugs, bio materials, and fusion biotechnology areas,as well as develop and spread core source technologies. Some 950 researchers and staff(including 300 regular staff and 190 Ph.D holders) work with a total budget of 98 billionwon. The KRIBB is currently pressing to construct local branches and a second campusin Ochang in an effort to upgrade itself as Korea’s foremost research institute inbiotechnology.

3) Biotechnology Basic Fostering Plan and the Establishment of a Working Plan

(A) Biotechnology Fostering Basic Plan Since 1994 the Ministry of Science and Technology has been implementing a pan-

national Biotechnology Basic Fostering Plan (Biotech 2000, 1994 ~ 2007) on the basis ofthe Biotechnology Fostering Law in order to promote effective R&D in the BT field.

40


The whole objective of the basic plan is to elevate the level of Korean technology to thatof the advanced countries by the early 2000s by investing a total of 16.924 trillion won(state: 6.4134 trillion won; private: 9.679 trillion won), and to occupy more than 5% of theglobal biotechnology market by raising the competitive level of Korean technology.Currently, the 3rd stage (2002 ~ 2007) of the basic plan is being pushed through (1ststage: 1994 ~ 1997; 2nd Stage: 1998 ~ 2001), with a projected investment total of12.9075 trillion won (state: 5.162 trillion won; private: 7.7455 trillion won). The same planwill be jointly pursued by the Ministries of Education and Human Resources Development;Science and Technology; Agriculture and Fisheries; Commerce, Industry, and Energy;Information and Communication, Health and Welfare; Environment; and Maritime Mattersand Fisheries. The investment results and ministerial plans are shown in <Figure 2-1-2-1>, and the strategy for pursuing the basic plans for fostering BT are shown in <Figure 2-1-2-2>.

(B) Establishment of Yearly Working Plans for Fostering BTMOST, in accordance with the BT Fostering Basic Plan based on Article 5 of the BT

Fostering Law, formulates and implements yearly working plans for fostering BT inconjunction with the related ministries.

Major contents of the 2005 working plan include: eight ministries including MOSTinvested a total 708.6 billion won to research and develop the basic science, fusion,healthcare, agricultural/livestock/fisheries, food, environmental, and marine BT fields, as

<Figure 2-1-2-1> Biotechnology Fostering Pursuit System


41

well as the manufacturing, bioprocess, and bio-information fields. They also support thestructuring of public R&D infrastructure such as national genome information centers.Investment results and the plans of the ministries are shown in <Table 2-1-2-1>.

<Figure 2-1-2-2> Strategy for Pursuing the Basic Plans for FosteringBiotechnology

42


C. Major R&D Programs

1) Basic Science Research Project

The support project for basic field research at universities and institutes involves specific

basic research support, creative research promotion projects, basic medical science

research centers (MRC), as well as the National Core Research Center (NCRC), the

scientific research center (SRC), the engineering research center (ERC), and the

provision of about 63.9 billion won to support the field of bio-engineering in 2005.

DepartmentYear

<Table 2-1-2-1> R&D Investment Results and Plans by Ministry

Description MOST MOE &HRD MOAF MOHWMOCIE MIC

2004 outcome

2005 plan

Change (%)

R&D

Infrastructure

Total

R&D

Infrastructure

Total

1,893

154

2,047

2,158

167

2,325

13.6

233

0

233

264

264

13.3

589

159

748

609

183

792

5.9

632

652

1,284

801

1,088

1,889

47.1

MOE MOMAF Total

576

743

1,319

686

692

1,378

4.5

88

27

115

102

40

142

23.5

189

17

206

195

18

213

3.3

46

18

64

62

21

83

29.7

4,246

1,770

6,016

4,877

2,209

7,086

17.8

(A) Specific Basic Research Support Project

This is a project in which the basic research in the creative science fields and the

interdisciplinary research into adjacent human and social sciences are co-performed by 3

researchers with a maximum annual research fund of 0.12 billion won per assignment, to

be supported for a maximum of 5 years in order to construct a basis for the cultivation of

excellent research manpower.- 2005 saw support of about 24.7 billion enter the BT field.

(B) Creative Research Promotion Project

The creative research promotion project is to support an annual fund of 500 million to

800 million won over the next nine years to explore next-generation researchers, nurture

them into world-class scientists, bolster basic research capabilities, and prepare the

foundations for creating core and source technologies and future new industries. 2005

saw financial support of 102 million won enter the BT field.


43

(C) Basic Medical Science and Engineering Research Center

(MRC: Medical Science and Engineering Research Center)

This is a project in which the support, expected to be available for a maximum of 9

years, has been offered since the beginning of 2002. It aims to establish and operate a

base for large-scale and long-term R&D in the fields co-applicable to biotechnology and

clinical medicine, and to cultivate manpower specialized in basic medical science and

engineering. 2005 saw financial support of 6.45 billion won channeled into 18 research

centers.

(D) National Core Research Center (NCRC) Project

For the promotion of knowledge and competition in the field of futuristic fusion science

and technology, this project has been designed to spur academic fusion research and

foster experts. To this end, the NCRC was established in 2003 and is being run. 2005

saw financial support of 6 billion won enter the BT field.

(E) Excellent Research Centers

(SRC: Science Research Center; ERC: Engineering Research Center)

This is a project in which groups of the world's leading scientists are cultivated,

composing objective-centered research assignments and groups as the basis for

university excellence and potential in research, in order to develop research centers of

international excellence capable of playing a leading role in the development of basic

research and the activation of university research. 2005 saw financial support of 16.5

billion won enter the BT field.

2) Specific R&D Project

This R&D program aims to strengthen national competitiveness and contribute to the

improvement of living standards through the strategic development of future source and

core basic technology and public welfare technology, and to lead new industries into the

21st century. Support was first given in 1982, while programs in the field of biotechnology,

including a nano-biotechnology development project, a next-generation bio novel drug

and organ project, the 21st Century Frontier R&D Project, and the National Research

Laboratory Project (NRL), are currently being funded, with about 139.8 billion won

channeled into the field of biotechnology as of 2005.

(A) Nano and Biotechnology Development Project

The nano biotechnology development project, a mid- and long-term R&D project to play

an incubator role in large-scale R&D projects, aims to develop core source technologies

in both the nano and bio fields that will lead the new 21st century industry and technology

44


innovation and augment the related infrastructures. The projects that are already

underway in the biotechnology field include bio discovery projects (the analysis and

research of molecular, cellular, and metabolitic functions), bio fusion projects (systems

biology, bioinformatics, bioelectronics, etc.), bio infrastructure structuring projects

(national genome information center, support for and utilization of gene resources,

development of technologies for evaluating safety, etc.), and bio co-work projects

(research into beneficial materials extracted from plants). 2005 saw financial support of

about 49.2 billion won enter this field.

(B) Next-generation Bio Novel Drug and Organ Project

To help Korea’s transformation into an advanced economy with a per-capita GDP of

USD 20,000, this project aims to develop core products through bio novel drug and organ

projects. The project is focused on fields that anticipate patents and the commercialization

of core technologies within the next five years, has specified its final goals and scope, and

is developing core products in four fields such as organ cloning and transplanting

technologies, protein chip technologies, intelligent drug delivery systems, and immunity

function control technologies. 2005 saw financial support of 10 billion won enter this field.

(C) 21st Century Frontier R&D Project

This is a long-term and large-scale project for selecting the technological fields judged to

be comparatively superior in competitive terms to those of the advanced countries,

supporting them broadly and upgrading them to a superior first-class rating. Depending on

the project, around 10 million won is given every year for 10 years. Currently, the BT field

involves 8 projects such as human gene function research, native plant utilization

technology, plant gene function research, bio function control substance development,

microbiological gene utilization technology, cell application technology, the utilization of

proteomics, brain function utilization, and the technological development of brain sickness

treatment. 2005 saw financial support of about 64.6 billion won enter this field.

(D) National Research Laboratory Project (NRL)

The mid-term NRL project aims to intensively support small-scale laboratories geared

toward fundamental technologies and destined for the greater public good, to help them

become excellent laboratories, and to thereby contribute to the enhancement of industrial

competitiveness. The project offers yearly financial support of 200-300 million won to

each related laboratory over the five years. In the BT field, the project currently supports a

total of 73 laboratories, 40 of which were selected in 2001 ~ 2003, 14 in 2004, and 19 in

2005. 2005 saw financial support of about 16 billion won enter this field.


45

D. Pursuit Directions and Development Assignments

1) Strengthening the Linkage between BT Development Projects

MOST is poised to strengthen the linkage between nano-bio technology developmentprojects, 21st century frontier R&D projects, and next-generation growth-engine industriesin the BT field, activate research in the BT field, and pursue effective R&D.

2) Strengthening the National Publicity Campaign

As BT is a science which deals with living things, it is necessary to inform people aboutBT and form public opinion on the matter. MOST is poised to present the future vision ofBT and boost national recognition of BT. The ministry is also striving to work together withrelated ministries such as MOHW and MOCIE in order to raise the legal and systematicfoundations relating to embryonic stem cell research, living modified organisms, andothers to an international level.

3) Strengthening Overseas Cooperation

In order to accelerate the domestic technological level in the BT field and foster world-class BT industries, it is necessary to acquire the excellent research techniques ofadvanced countries by drawing positively from excellent overseas institutes. MOST is setto establish common biological resources research centers in overseas areas with amplebiodiversity, systematically gather local biological resources, and thus secure diversebiological materials, as well as receive the transfer of technologies through joint researchwith superior overseas researchers, by strengthening overseas partnerships.

46


3. Bio-industry Fostering Policies (Ministry of Commerce, Industry, and Energy,MOCIE)

MOCIE is pushing the 3.12 Bio-industry Development Project, formulated in July 2005,

which aims to bolster Korea’s bio-industry competitiveness. First, with the presentation of

the policy vision of exploring first-class corporations and achieving exports of USD 10

billion by 2010 by commercializing traditional bio products as world-class products: to this

end, the ministry is intent on developing technologies that will prompt the industrialization

of cutting-edge BT products, create infrastructures designed to spur regional innovation

and lead the advance into the global market, and improve corporate management

conditions in the bio-industries. To achieve these three policy objectives, the ministry has

set - and is tackling - twelve policy tasks.

A. Pushing for the Development of Industrializing Technologies

1) Formulation of a Roadmap for BT Industrializing Technologies

The ministry will survey the size and development possibility of domestic and overseas

markets in the bio-industry, grasp the characteristics of technologies by development

stage and related domestic and overseas trends, offer the status and development

direction of tools and platform technologies that are leading the development of the bio-

industries, and explore and support first-priority tasks.

2) Intensive Investment in Industrialization-oriented BT R&D

The ministry supported a total of 69.5 billion in 118 short-, mid-, and long-term

technology R&D projects in 2005. The mid- and long-term R&D projects are focused on

drugs, bio chips, information technology, BT, and fusion technologies, while the focus of

the short-term projects is on drugs, materials, food, diagnostic equipment, medical

equipment, and others.


47

<Figure 2-1-3-1> Roadmap for Policies on Bio-industry Development Strategies

48


Description Technology Field

Protein-related products (for medicine/industrial use),

Small-molecule drugs

Industrial enzymes (amino acids, carbohydrates, etc.),

bio materials

Drug delivery system (continuous injections, oral agents, etc.)

Practical platform technologies (QC/QA/Scale-up/HTS/safety

evaluation, etc.)

Bio chips (DNA chip/protein chip/Lab-on-a-chip, etc.)

Bioinformatics technology (bioinformatics/HW/SW/activation

analysis, etc.)

Proteomics-related technology (analysis of protein

structure/function, etc.)

Development of super-sense high contents screening system

technology

Development of gene therapy technology (development of non-

viral gene delivery systems for particular diseases, etc.)

Development of cell therapy technology (development of cell

therapy-based anticancer drugs, etc.)

Development of technologies for immunity adjustment treatment

drugs

<Table 2-1-3-1> 13 Technology Fields in 4 Categories (mid- and long-term technology development)

Bio materials(4 categories)

Applied platform technologies(2 categories)

Bio fusion technologies(4 categories)

Therapeutics(3 categories)

3) R&D Project Pursuit for Creating Bio Stars

The ministry launched the Bio Star Project reflecting the characteristics of the bio-

industry in 2005 to present global market success cases of leading corporations by

developing world-class products. In particular, the ministry will offer financial support

covering pre-clinical and early clinical stage costs (between 1 and 1.5 billion won annually

per project) to bio-star projects to enable them enter the global market and thus create

blockbuster-grade novel drugs. This year, five corporations were selected in this category,

and are now receiving R&D support.

2

1

Sangju

2

Gang-neung

1

Andong

Uljin

2

1

2

1


49

Region

<Table 2-1-3-2> Status of the Structuring of 24 Bio Centers

Type ItemSupport

until Region Type

S.Chungcheong

Province

’03

’07

’07

’07

’05

’07

’03

’03

’07

’07

’03

’08

Item Supportuntil

’03

’08

’03

’07

’05

’07

’05

’05

11 centers with the mark of * were conducting production activities as of the end of June 2005.

2

1

2

1

Hwasun

Jeonju

Jecheon

Yeongdong

Ochang

Nonsan

2

1

Regionalcenter

BVC*

Regionalcenter

BVC*

Regionalcenter

BVC*

Regionalcenter

BVC*

Regionalcenter

Regionalcenter

Regional center

BVC*

Regionalcenter

BVC*

BVC*

Regionalcenter

Regionalcenter

BVC*

Regionalcenter

Regionalcenter

Regionalcenter

Regionalcenter

Regional center

BVC*

Cosmeceu-ticals

Food

Food

BT

Marine

BT

Healthindustry

Marine, andenvironment

Korean medicine

Food

Chemicalmaterial

Chemicalmaterial

Marine

Marine

Food

Organism

Agriculture, vaccine

Food

Traditionalmedicine

Food

Healthcare

Animalresources

BT

Medicine

Jeju

N.Gyeongsang

Province

Gangwon

Gangwon,and

Chuncheon

N. Gyeongsang

Province

N. Gyeongsang

Province

Daegu

S.Gyeongsang

Provinceand Jinju

Busan

S. JeollaProvince

S. JeollaProvinceand Naju

N. JeollaProvince

N.ChungcheongProvince

Daejeon

’08

’08

’07

’07

50


B. Augmentation and Quality Advancement of IndustrialInfrastructures

1) Fostering of Bio Clusters Linked with Region-specific Resources

Nine bio venture support centers in line with industrial policies, and 15 region-specificbio centers for balanced regional development, are being established. The ministry plansto structure a Korea Bio-Hub Center linking all these centers, network 24 bio centersnationwide, and foster them into innovative clusters that can create high added value.

2) Expansion of the Base for Production, Evaluation, and Testing for JointUse by Industries, Academia, and Research Centers

Presently, Korea has no cGMP (current Good Manufacturing Practice) plant, apharmaceutical production facility that makes it possible to enter advanced markets. Assuch, to facilitate the entry by bio corporations into advanced markets and promoteKorean drugs as global products, the ministry is set to establish commissioned bio drugsmanufacturing facilities which conform to the U.S. FDA standards. The BT IndustrializingTechnology Center, under construction in Songdo, Incheon, since 1998, will comprisepharmaceutical plants (cGMP building, animal cell cultivation lines, microbial fermentationlines, and finishing lines), as well as various annexed facilities (non-GMP building, QC-Lab, etc). It will be completed in 2005, validated in 2006, and enter commercial productionin 2007.

Furthermore, to ensure the GLP (Good Laboratory Practice) operation system, a global-level pre-clinical facility, the ministry plans to structure the Safety Evaluation Center underthe Korea Research Institute of Chemical Technology from 1997 ~ 2002 at a cost of 40billion won, and the Toxicity Test and Evaluation Center under the KRICT from 2000 ~2005 at a cost of 5.7 billion won. It also plans to structure the Functional Food ClinicalSupport Center at Chonbuk National University from 2004 ~ 2008 at a cost of 5 billionwon to support the clinical test of functional foods, and the Korean Medicine ClinicalSupport Center at Daegu Haany University from 2004 ~ 2005 at a cost of 3.5 billion wonto support the clinical testing of Korean medicines and Korean medical products, therebyenhancing the foundations for the production, evaluation, and testing in the bio-industriesto the level of the advanced nations.

3) Fostering BT Experts

The bio-industry is a knowledge-based industry; securing superior manpower is the vitalkey to its competitiveness. Since talented personnel in the state-of-the-art technologiesand experts in these ever-developing technologies are currently scarce, however, theministry is seeking to expand education opportunities to foster experts and improve thedemand and supply system.


51

Quality Advancement in 3 Projects of Fostering BT Experts

Fostering hi-tech R&D professional manpower for leading BT development *Short-term program of fostering BT manpower : a cost of 8 billion won, ’01-’05*Plan to open overseas programs of fostering professional manpower in cGMP

Supplying frontline-tailored manpower to effectively respond to rapidly changingbioindustries *Fostering manpower in BT production : a cost of 8 billion, ’02-’05*Structuring regional re-education networks linking to 24 regional centers,municipalities and regional corporations

Operation of industrial-oriented programs in advanced BT education*Cooperative courses among industries, schools and research centers aimed atinnovating BT education : a cost of 9.3 billion won, ’03 -’07

*Opening interdisciplinary education programs to respond to the technology fusionsuch as BIT and BNT

C. Improvement of the Management Conditions at BT Corporations

1) Reshaping of Systems relating to BT Production, Distribution, and Trade

The ministry is pursuing the timely reshaping of the laws and systems relating to domesticsales and the international trade of BT products, supporting related companies to facilitateproduction and exports, easing and improving the excessive regulations governing productionand sales, enacting domestic enforcement laws in line with the Biological Weapons Convention,reshaping living modified organisms-related domestic laws (enactment of the enforcementordinances and enforcement rules), and structuring the foundation for the evaluation ofhazardous substances.

2) Forming of Strategic Partnerships between Participants in the Value Chain

To maximize the capabilities of participants in the value chain across the board from thebottom to the top with the aim of developing the bio-industries, the ministry is supporting theoperation of policy forums in which experts in technology, management, and policy participate,as well as the structuring of the base for transferring biotechnologies from 2005 ~ 2009 at a costof 3.5 billion won.

52


3) Strategic Overseas Advancement and the Pursuit of Cooperative

Projects

The ministry plans to attract the R&D and manufacturing bases of advanced U.S. and

European corporations in order to divert their entry into the Asian market into Korea. It is

also preparing to utilize the economic networks of the wider East Asian community to

foster the bio-industries, and thereby actively support the advance of domestic BT

corporations into overseas markets.

D. Fostering Bio-industries and MOCIE

Worldwide bio-industries have been growing by a hefty 11%+ annually since the 1990s.

With the ageing of the population and the innovative development of biotechnologies,

huge BT markets with enormous potential are likely to emerge, and competition is

consequently stiffening among the advanced nations. Amidst this new situation, the

ministry - following a review of the capabilities of the domestic bio-industries (which are

taking off from the birth stage) and of the vision and development strategies for the bio-

industries - presented the 3.12 Bio-industry Development Project and the 2015 Bio-

industry Future Vision and Development Strategy in 2005.

As such, the ministry formulated strategies for intensive investment in Korea-strong

areas with the promise of early industrialization through selection, concentration and early

occupation of the future market, and presented a vision for entry to the ranks of the G7 in

terms of BT power, production worth 60 trillion won, and exports of USD 25 billion by

2015.

To this end, MOCIE plans to invest budgets of 2 trillion won over the next ten years in

support of bio-industry R&D and the creation and structuring of the related infrastructures.

4. Policies for Basic Science Promotion and Manpower Cultivation in BT (Ministry of Education and Human Resources Development, MOE&HRD)

53

4. Policies for Basic Science Promotion and ManpowerCultivation in BT (Ministry of Education and HumanResources Development, MOE&HRD)

A. Basic Science Promotion in the BT Field

1) Necessity

Recently, somatic cell cloning and human embryonic cloning tests have beensuccessful, and rapid progress has been made in gene research and nerve net research.As such, the latest biotechnologies are signaling big changes in our life. A large numberof diseases are being eradicated and life expectancy is increasing due to thedevelopment of new medical treatments and medicines through the application of basicscience. The achievements in bioscience have been made possible by the developmentof the relevant basic science fields. In other words, they have been derived from theresults of experimental technologies in basic scientific fields such as biology,biochemistry, physiology, and biophysics. Furthermore, with an increasingly ageingsociety, demands are rapidly rising for the activation of industries for elderly people andother BT areas, and - with the trend of fusion and development together with IT, NT, andET - BT is under an intense spotlight as one of the areas that will lead the development ofthe 21st century cutting-edge industrial society.

The United States, through its NIH, is channeling its efforts into utilizing the outcome ofthe human genome project, and developing and commercializing novel drugs. (US Budgetfor 2005: USD 28.6 billion.) Japan too, in an attempt to get ahead in the post-genomeresearch race, is investing heavily in the BT field. (Japanese budget for 2004: 252.7 billionyen.)

2) Pursuit of Basic Science Promotion

The MOE&HRD has been pushing for an academic research creation project since 1963to balance the fostering of basic sciences (humanities and sociologies, and basicsciences), strengthen professors’ basic research capabilities, bolster graduate schoolstudents’ research abilities, and structure the nation’s basic research infrastructure. Ofthese projects, those relating to science and technology include support for pure basicresearch groups, as well as support for basic science research aimed at facilitating theproduction of creative scientific and technological knowledge.

54

4. Policies for Basic Science Promotion and Manpower Cultivation in BT (Ministry of Education and Human Resources Development, MOE & HRD)

(A) Support for Pure Basic Research Groups MOST is advancing purposeful, basic projects geared towards excellence and

superiority, while MOE&HRD, through the Korea Research Foundation, is providingintensive support for pure basic research projects geared towards universality andgenerality. Thus, MOE&HRD is striving to create a healthy research climate driven by thequest for new knowledge and principles, structure a research base in the basic sciencefield, and boost potential in the development of national science and technology byhelping bring together researchers in the same fields in universities, research centers,and others.

Classification

<Table 2-1-4-1> Support Situation for a Pure Basic Research Group

Supported Objects

Supported Fields

Support Scope

Contents

Pure basic research groups in the same majors

Pure basic research areas in mathematics, physics,chemistry, biology, earth science, statistics, astronomy,

geology, atmospheric science, oceanography, etc.

19.1 billion won for 2005 (66 projects)

Remarks

(B) Basic Science Research Support The ministry continues to support the basic science fields and thus facilitate the

production of creative and scientific knowledge that is essential to the knowledge-basedsociety.

Classification

<Table 2-1-4-2> Situation of Basic Science Research Support

Supported Objects

Supported Fields

Support Scope

Contents

Tasks for Basic Science

Mathematics, physics, chemistry , geophysics,biology, statistics, astronomy, geology, atmosphericscience, oceanography, and basic medical science

15 Billion Won for 308 Tasks in 2005

Remarks

3) Status of Pursuit of Projects Transferred by MOST

Of the projects transferred in October 2004 from MOST, Support for Fostering LeadingScientists and Support for Leading Basic Science Laboratories are aimed at supportingR&D in the pure basic sciences and enhancing their quality, boosting the morale ofresearchers, and fostering manpower.

MOST : Ministry of Science and Technology


55

(A) Support for Fostering Leading Scientists This project was conceived to help researchers in the basic sciences enhance their

research qualities, boost their morale, and bolster competitiveness in science andtechnology, by selectively supporting them.

Classification

<Table 2-1-4-3> Status of Support for Fostering Leading Scientists

Supported Objects

Support Scope

Contents

Tasks for Basic Science

Mathematics, physics, chemistry, and life science,geophysics

4.05 billion in ’05 (44 tasks)

Remarks

(B) Support for Leading Basic Science Laboratories This project was designed to boost the nation’s competitiveness in science and

technology in the 21st century by supporting research in the pure basic sciences.Specifically, the project strategically supports highly creative research groups in relatedareas.

Classification

<Table 2-1-4-4> Status of Support for Leading Basic Science Laboratories

Supported Objects

Supported Fields

Support Scope

Contents

Labs for researching pure basic science areas

Mathematics, physics, chemistry, geophysics, biology

5 billion won in ’05 (25 research institutes)

Remarks

B. Manpower Cultivation in the BT Sphere

1) Pursuit Situation

To pursue the core task of supplementing and supplying excellent BT manpower inorder to secure the national competitiveness of BT as an emergent growth industry for the21st century.

Supported Fields

56


(A) Manpower Cultivation for National Strategic Fields

In the case of the BK21 project, the ministry offered financial support of 26.8 billion won

and 13.4 billion won in the BT field in 2003 ~ 2004 and 2005, respectively. A total of 85.6

billion won was offered from 1999 ~ 2005. With the 2nd BK21 project (2006 ~ 2012)

already planned, support for the BT field will continue.

<Table 2-1-4-5> Yearly Support for the BT Field in the BK21 Science andTechnology Category

No. ofuniversity

No. of BTprojectgroup

1st(’99)

2nd(’00)

3rd(’01)

4th(’02)

5th(’03)

6th(’04)

7th(’05)

10 11 7,549,000 13,043,000 12,698,000 12,130,000 13,408,000 13,408,000 13,408,000

(Unit: 1,000 won)

(B) Foundation Construction for BT Manpower Cultivation, including the

Introduction of a Medical/Dental Science Graduate School System

Aiming to consolidate the base of manpower in the BT field, the ministry increased the

number of national university professors specializing in the basic sciences by 70 in 2002

and 31 in 2003, respectively. It plans to add 70 more professors in 2005 ~ 2006. The

ministry is also starting to introduce graduate schools for the medical/dental sciences,

thus implementing both an undergraduate medical education (2-year premedical course

plus a 4-year medical course), and a graduate school medical education (4-year

undergraduate course plus a 4-year graduate school course).

As such, a high quality medical education is expected, outstanding clinical doctors with

diverse academic backgrounds will be cultivated, and M.D. and Ph.D. courses will be

introduced, thereby nurturing medical scientists to lead the development of the basic

sciences in the medical field.

In 2005, four medical colleges and five dental colleges converted themselves into

medical/dental graduate schools. By 2009, 20 medical colleges and 7 dental colleges,

totaling 27 (52%), will follow suit.


57

2) Problems and Improvement Plans

Although the government continued increasing investment in the BT field, the 2005

budget for BT R&D was 704.6 billion won (a 17.6% increase on the previous year),

representing 9.0% (13% in the case of the Japanese government) of the total R&D

budget, but nevertheless a smaller budget compared to those of the advanced nations.

2010 will see the need for some 3,000 researchers in the cutting-edge BT fields,

including geonomics, proteomics, and bioinformatics. However, only 1,000 researchers

are anticipated, thereby implying a serious shortfall. Currently, manpower in the BT field in

Korea stands at 12,000, just one-third of the figure for the United States.

<Table 2-1-4-6> Status of Graduates in the BT Field in the U.S. and Korea

No. ofuniversity

No. of BTprojectgroup

1st(’99)

2nd(’00)

3rd(’01)

4th(’02)

5th(’03)

6th(’04)

7th(’05)

1998

2000

2003

85,079

83,148

-

10,230

10,183

-

6,549

6,791

6,526(’01)

96,858

100,122

-

22,689

23,128

24,330

4,999

6,115

7,129

1,661

2,141

2,575

29,349

31,384

34,034

(Unit: No. of people)

(Source: S&E Indicators, Appendix Table 2, NSF, 2004)

Also, the manpower in production technologies, with the recent explosive increase in BT

ventures, looks likely to be greatly lacking.

Thus, the government will expand investments in the BT field - including new core fields

and next-generation growth-engine industries by increasing related budgets and stepping

up university education to cope with manpower shortages and increasing market

demands. The government also needs to foster high-skilled manpower in the core

technologies that are leading the development of the bio-industries, and enhance

society’s awareness of the need to foster the essential related manpower.

58


5. BT Fostering Policy in the Agricultural Field (Ministry of Agriculture & Forestry,MOAF)

A. Outline of the Policies for Fostering Biotechnologies inAgriculture and Forestry

Agricultural BT is receiving attention as part of the policy to overcome the aftermath of thedeterioration of the agricultural environment and traditional agriculture following the opening ofthe country’s agricultural import market, reshuffle agriculture into the ranks of the nation’s majorwealth-producing industries, and convert it from an essentially labor-intensive industry into anenvironmentally-friendly, high added-value, knowledge-based industry.

MOAF is striving to foster and utilize agricultural BT, develop our unique source technologiesand application technologies, cultivate diverse new-function items of agricultural products, andsecure national competitiveness in agriculture. It is also endeavoring to develop cutting-edge BTindustrializing materials and convert agriculture into a high added-value knowledge-basedindustry, thereby enhancing the quality of life in rural areas.

1) Basic Strategies of the Policy for Fostering Agricultural BT

(A) The core policy seeks to reshape related systems and secure superior researchmanpower, as well as strengthen BT research functions in research institutes bycrop, thus structuring a national research system that plays the central role inagricultural BT research.

(B) The policy seeks to structure alliance systems with agricultural BT research-relateduniversities, state-invested research institutes, and private research institutes, aswell as establish systems for role-sharing and cooperation with BT R&D-relatedministries, thereby operating national systems that comprehensively plan, adjust,and link with one another.

(C) The policy advances large-scale state-run research projects involving industries,academia, and research centers in which experts from the Rural DevelopmentAdministration, universities, state-invested research institutes, and private researchinstitutes participate.


59

Korea’s agricultural BT field, compared to that of the U.S. and other advanced nations, is farless competitive and has yet to boost its efforts to develop source technologies, although it hasstructured its basic infrastructure. Thus, if positive investments are made, the nation can securesufficient international competitiveness in the agricultural BT sector.

Currently, with regard to its agricultural technologies, Korea boasts the world’s largest riceproduction per unit area, the world’s best technologies for cultivating rice, and conductscomprehensive research on all organisms including crops, livestock, and microorganisms, thusensuring a solid base and ample information on organisms. As such, the nation, if it secures thesource materials and applies practical technologies, could trigger explosive effects by fullydeveloping the agricultural BT field.

<Table 2-1-5-1> Status of Worldwide Development of Genetically ModifiedOrganisms

Description Corn Rape Bean Cotton Potato Tomato Others (11 items) Total

No. of item 21 17 5 9 7 6 2287 items in

17 farmproducts

(OECD, January 2005)

<Table 2-1-5-2> Status of Cultivating GMOs by Nation

Description

USA

Argentina

Canada

China

Others (12countries)

Total

1996 2000

30.3(69%)

10.0(22)

3( 7)

0.5( 1)

0.3( 1)

44.2(100)

2001

35.7(68%)

11.8(22)

3.2( 6)

1.5( 3)

0.4( 1)

52.6(100)

2002

39.0(66%)

13.5(23)

3.5( 6)

2.1( 4)

0.6( 1)

58.7(100)

2003

42.8(63%)

13.9(21%)

4.4(6%)

2.8(4%)

3.8(6%)

67.7(100%)

2004

47.6(59%)

16.2(20%)

5.4(6%)

3.7(5%)

8.1(10%)

81.0(100%)

(million ha, ISAAA, January 2005)

1.5

0.1

0.1

1.7

B. Overseas Trends

1) Worldwide Status of BT-based Crops

Since the mid-1990s when living modified organisms first began to be cultivated, theirproduction has increased rapidly every year. 2004 saw the total worldwide area for cultivating

Change from theprevious yr. 11% 19% 12% 15% 20%

60


LMOs reach 81 million ha (James, 2004), a 20% increase on 2003 when it stood at 67.7 millionha.

In 2004, a total of 17 nations accounted for the cultivation of LMOs by 8.25 million farmers,with the United States’LMO cultivation covering an area of 47.6 ha, or 59% of the worldwidetotal. Argentina cultivated an area of 16.2 million ha (20%); Canada, 5.4 million ha (6%); Brazil,5 million ha (6%); and China, 3.7 million ha (5%).

By crop, beans were cultivated on 48 million ha worldwide, representing 60% of the total LMOcultivation area, a slight increase on 2003’s 41.4 million ha. Genetically modified corn wascultivated on 19.3 million ha (23%), greatly exceeding the 2003 figure of 1.55 million ha. Cottoncultivation reached the 9 million ha (11%) mark, a marked rise from 2003’s 7.2 million ha, andrapeseed was grown on 4.3 million ha (6%).

<Table 2-1-5-3> Cultivation Trend of GMOs by Crop

Description

Bean

Corn

Cotton

Rape

Others

Total

1996 2000

25.8

10.3

5.3

2.8

Under 0.1

44.2

2001

33.3

9.8

6.8

2.7

Under 0.1

52.6

2002

36.5(62%)

12.4(21)

6.8(12)

3.0( 5)

Under 0.1

58.7

2003

41.3(61.3%)

15.5(23%)

7.2(11%)

3.6(5.3%)

Under 0.1

67.7

2004

48.4(60%)

19.3(23%)

9(11%)

4.3(6%)

Under 0.1

81.0

0.5

0.3

0.8

0.1

Under 0.1

1.7

<Figure 2-1-5-1> By Nation in 2004 <Figure 2-1-5-2> By Crop in 2004

- LMO cultivation area - - LMO cultivation area -


61

By cultivation area, beans were raised on 86 million ha. worldwide, with genetically modifiedbeans accounting for 60% of this area. Corn was raised on 143 million ha, with LMOsrepresenting 14%; cotton was raised on 32 million ha, with LMOs accounting for 21%, andrapeseed was farmed on 23 million ha, with LMOs accounting for 19%. The total cultivationarea of these four crops was tallied at 284 million ha, with LMOs representing 29% of the total, a25% increase on 2003.

In terms of the market size, 2004 saw the worldwide LMO crop market’s value reach USD 4.7billion, representing 15% of 2003’s total worldwide crop market size of USD 32.5 billion, and16% of the global seed market, worth some USD 30 billion.

<Figure 2-1-5-3> Ratio of LMO Cultivation Area by Crop in 2004

<Figure 2-1-5-4> Worldwide Trends of the LMO Seed Market

62


The worldwide LMO market is forecast to grow to over USD 6 billion in 2005. In particular, the

market of the currently noteworthy 3rd-generation LMOs- healthy functional foods - will rise from

the current USD 65 billion to USD 15 trillion in 2027 (an annual increase rate of 22.5%).

C. Domestic Status

1) Goals and Pursuit Strategy of Agricultural BT

The government should play a more crucial role to enhance the nation’s weak agricultural BT

to the level of the advanced nations and explore new avenues of agricultural revenue. Thus, to

boost its role, the government has set a yearly major pursuit direction, and is investing heavily in

the related areas.

(A) Agricultural BT by Field in line with the Long-term Plan Based on Agricultural

Administration Purposes.

The ministry will draft the roadmap, reflect user needs, and structure the total cycle

research system, as well as develop industrialization-oriented technologies and enhance

efficiency in investment.

(B) The preparation of source-based technologies and the industrialization of developed

technologies are to be actively encouraged, as continuous growth slows and the leakage

of national wealth increases in the absence of any native source base technology.

Furthermore, the technologies concerned will be opened to the public and a technology

transfer system will be constructed in order to prevent dual investment.

(C) As it is impossible to pursue continuous growth without an accurate understanding

of the agricultural bio-industry, various publicity programs and an institutional,

technological system of safety management for the enforcement of Bio-safety Protocol

are to be established.

2) MOAF’s Planned Projects for 2005

(A) Investment Results and Plan

58.1 billion won for 2003; 74.8 billion won for 2004; and 76.2 billion won for 2005. (Up by

5.9%)


63

<Table 2-1-5-4> Investment Results and Plan

Project name

Agricultural technology developmentproject

Bio organ production research project

Bio novel drug production researchproject

Agricultural BT development project

Agricultural BT development project

Forestry resources production andutilization technologies aimed at highadded value

Veterinary science technologydevelopment project

Infrastructure structuring project

Total

Project period

’04 - ’13

’94 -

’01 - ’10

Continuing

‘04 results

20

240

246

(159)

748.2

‘05 plan Organizingagency

(Unit: 100 million won)

45

233

308

(183)

762.7

MOAF

RAD

RAD

RDA

※Agricultural BT development project (including budgets for structuring the infrastructure: 15.9 billion won for

2004, and 18.3 billion won for 2005))

(B) Major Pursuit Direction① The ministry will select more competitive agricultural BT fields, invest in them intensively,

and develop high added-value and high-function new products within a short term, therebyfocusing on developing platform technologies for the industrialization of BT, as well asutilizing and industrializing research achievements.

② The ministry will use the milk and urine of transgenic livestock, and develop technologiesfor producing and industrializing high added-value novel bio drugs.

③ The ministry will invest intensively in developing technologies to secure safety in agriculturalBT and organize the infrastructure for activation of the bio-industries, as well as establishcomprehensive management measures for agricultural gene resources, the material forfostering biotechnologies.

3) Status of R&D into Genetically Modified Organisms

(A) R&D by the Rural Development Administration The RDA, which began BT research in 1991, is now developing 50 kinds of transgenic crops

and 20 livestock species, but has yet to put crops to practical use. However, the agency is noweither selecting promising transgenic crops or evaluating their safety.

Since ’94

’05- ’13 - 13 RDA

’04- ’13 8.1 9.1 KFS

Since ’98 160 98 NFRDI

51.6 56.6 MOAF

64


Description Outline

Stage of validating the introduction of genes 22 kinds such as catechin-producing lettuce

19 kinds such as vitamin E-enhanced perilla and iron-

enhanced potato

4 kinds such as herbicide-resistance rice plant, chili, and

perilla, and virus-resistance potato

* Four farm products, isolated and packaged, are undergoing testing for agricultural characteristics, environmental

impact and others. They will likely be put to practical use in 3-4 years.

<Table 2-1-5-5> Status of the Development of Transgenic Crops : 45 kinds in 18farm products

Description Outline

Stage of validating the introduction of genes

Stage of validating functions

2 kinds including such as pigs effective in facilitating blood

creation and decomposing fibers

3 kinds such as chickens effective in treating thrombosis,

producing albumin and easing obesity

<Table 2-1-5-6> Status of the Development of Transgenic Livestock : 5 breedsfrom 2 livestock species

(B) Status of R&D in Universities and the Private Sector

Domestic universities, research institutes, and seed companies are conducting R&D, but have

yet to come up with transgenic crops that have been approved for distribution and sale.

Transgenic crop data released from the related associations are shown in the following table,

but it is difficult to confirm the contents.

Stage of assessing safety

Stage of validating functions


65

Farm product name Outline

Rice plant

Potato

Chili

Carrot

Apple

Lettuce

Watermelon

Tomato

11 kinds such as herbicide-resistance, and drought-resistance rice plant

6 kinds such as disease-resistance and insect-killingpotatoes

5 kinds such as holistic resistance, and blooming-adjustment chili

2 kinds such as carrot used in manufacturing vaccines forpreventing bacterial diseases in livestock

4 kinds such as blooming-adjustment and coloring-enhancement apple

2 kinds such as salt-resistance and drying-resistancelettuce

2 kinds such as disease-resistance and disaster-resistance watermelon

2 kinds such as productivity-enhancement and insect-killing tomato

1 kind of chrome-resistance

2 kinds such as virus-resistance and different colors

2 kinds such as heavy metal-resistance

2 kinds such as heavy metal-resistance, and drought-resistance

<Table 2-1-5-7> Status of the Development of GMOs as Reported by Universitiesand the Private Sector

Classification

<Table 2-1-5-8> Comparison of the Production Technologies for Novel Bio Drugs

Thrombosis treatmentsubstance(tPA)

Hemophilia treatmentsubstance(vWF)

Contents

Produce EOP using a cell culturemethod, and post annual sales of USD6.8 billionCell culture method: culture andproliferate animal and plant cells, thusproducing medical substances

Produce and extract thrombosistreatment substances in antelopes

Separate hemophilia treatmentsubstance from human blood (world market volume valued at USD 2.6 billion)

Produce EOP using a cell culturemethod, and post annual sales ofUSD 6.8 billionCell culture method: culture andproliferate animal and plant cells,thus producing medical substances

Produce and extract thrombosistreatment substances in antelopes

Separate hemophilia treatmentsubstance from human blood(world market volume valued atUSD 2.6 billion)

Remarks

* EPO(erythropoietin): hormone that secretes in the kidney and makes red blood cells

tPA(tissue plasminogen activator): works to dissolve thrombus formed in the bloodstream

vWF(von willebrand factor): substance to treat Von Willebrand Disease, a kind of hemophilia

Brassica juncea var.integrifolia

Carnation

Poplar

Korean Aspen Hybrid, Populus xalbaglandulosa

Anemia treatmentsubstance(EPO)

66


(C) Status of the Development of the Production Technologies for Novel BioDrugs

The BT market is growing dramatically, led mainly by the United States and Europe. However,Korea has recently developed production technologies for innovative novel bio drugs to treatserious medical conditions such as anemia, thrombosis, and hemophilia.

① The value of the worldwide anemia treatment drug market has been estimated at USD 6.8billion; in 1998, Korea successfully developed transgenic pigs whose blood is rich inerythropoetin - or EPO - necessary for producing an anemia treatment substance, and thistechnology far exceeds that used by the U.S. to produce anemia treatment substances bycultivating cells.

② The thrombosis treatment substance is priced at 54 million won per gram, and thus hashigh added-value: its worldwide market is estimated at USD 600 million. In 2003, Koreadeveloped transgenic pigs with the gene (tPA) required to treat human thrombosis.

③ The worldwide hemophilia treatment drug market is estimated at USD 2.6 billion. In 2004,Korea developed the world’s first transgenic pigs, which have been used to produce ahuman hemophilia treatment substance (vWF). A hemophilia treatment substance wascreated by separating and refining the milk of the pigs. Korea will undertake clinical tests ofthe substance for its industrialization.

(D) Status of R&D into Bio Organ Production ① In accordance with the establishment in April 2004 of a comprehensive action plan for the

next-generation growth-engine industries, the development of technologies for closing andtransplanting bio organs is being undertaken and pursued jointly by MOST (for sourcetechnologies), MOAF (production of bio organs), and MOHW (for clinical technologies).

② To develop aseptic transgenic pigs for use in the production of bio organs, MOAF plans toinvest 58.5 billion over the next ten years. - Investment schedule: 2 billion won in 2004; 4.5 billion won in 2005; and 6.5 billion won in2006.

D. Prospects for Development

1) Farmers also prefer living modified organisms, citing economy and laborsavings.

8.25 million farmers from 17 nations currently prefer LMOs because they have proved to beeffective in increasing output, reducing labor, and preventing environmental pollution inparticular. Genetically modified beans are now cultivated in over 60% of the world’s entire beancultivation area.


67

Description

<Table 2-1-5-9> Examples of LMOs

Vermin-resistancetransgenic corn

Vermin-resistancetransgenic cotton

Herbicide-resistancetransgenic bean

Economical gain(Crop increases, and

production costdecreases)

150$/ha

514$/ha

160$/ha

Preventingenvironmental pollution

(Use of pesticidesdecrease)

6%

14%

28%

Reducing labor(Sprays decrease)

14%

22%

30%

2) The market for new-function LMOs is rapidly growing

The central axis of BT is forecast to gradually move from the medical BT field to theagricultural, environmental, and energy BT fields. The market for new-function LMOs is forecastto expand rapidly. Since 1996, when the cultivation of LMOs first began on 1.7 million ha offarming land, the cultivation area has increased to 81 million ha in 2004, an increase of 48times.

3) The key issue is how to evaporate distrust in consumers with regard to LMOs

As agricultural biotechnology has a low possibility of success and invested funds have a slowrecovery period, it is difficult to attract positive investment from civil enterprises, and awidespread lack of faith in LMOs works as an obstacle to commercialization, thereby hamperingthe constant development of agricultural biotechnology. Thus, publicity efforts should alsocontinue to clarify that LMOs are safe.

68


R&D Investment

Project for Developing Novel DrugsProject for Developing Bio OrganTechnologies Project for Developing MedicalEquipment Project for Developing Medical ITProject for Developing Health-FunctionProductsProject for Developing Healthcare BTProject for Developing HealthcareTechnology Infrastructure

Infrastructure Construction

Osong BioscienceComplex ConstructionGenome Practicalization Project

Health Care TechnologyTransfer Project Enterprise-supported FundConstruction / ManagementExport Promotion Project

Industrialization Support

6. BT Fostering Policies in Healthcare Field (Ministry of Health and Welfare,MOHW)

A. BT Fostering Policy Summary of the Health Care Fields

Standard concepts of healthcare are likely to change as it is fused together with BT, IT, andNT, and the corresponding social structure and lifestyles are likely to change considerably aswell. Consequently, the Ministry of Health and Welfare is to implement strategies for investmentin R&D, construction of infrastructure, and industrialization support, thereby maintaining itsvision of a ‘rich healthy country achieved through the fostering of high-tech bio-healthindustries’.

B. R&D Investment Situation and Plans

MOHW enacted the Healthcare Technology Promotion Law in December 1995, and has since

been implementing the project to research and develop healthcare technologies in novel drugs,

medical equipment, medial science, and other areas. The ministry will invest a total of 1.3 trillion

won by 2008.

1) Results of the Research

The ministry began the project of promoting healthcare technologies in 1995, and by 2005 had

achieved superior research results, including the creation of seven novel drugs, 116 items of

medical equipment, and 48 BT products, and the export of eleven technologies. In particular,

eleven Korean-produced novel drugs (seven of which received government support) including


69

the nation’s No. 1 novel drug - SK Chemicals Life Science’s Sunflower- have thus far been

developed, making Korea the eleventh nation to develop a novel drug. Furthermore, Chonnam

University’s Intestine-related Geonomics Research Center became the first in the world to

completely read the genome base sequence for vibrios, and registered the outcome with the

U.S. National Center for Biotechnology Information (NCBI) in December 2002.

2) R&D Investment Situation

The ministry is supporting the project to develop novel drugs, structure domestic

pharmaceutical makers’ own novel drug development system, and help the nation accede to

the ranks of the advanced nations capable of developing novel drugs. In particular, following the

enactment of the Natural Substance-based Novel Drugs Development Promotion Law in

January 2000, the ministry has supported efforts to this end. Also since 2004, the ministry has

been providing pre-clinical and clinical testing support in six fields such as cell therapy,

treatment vaccines, and antibody drugs, in order to develop the next-generation growth engine

of bio drugs. The ministry also selected Functional Cell Therapy Drug Development Centers

and Antibody Drug Development Centers to foster research centers specializing in these fields.

To internationalize the domestic development of novel drugs, the ministry also supports joint

research efforts with advanced nations, costing 1 billion won over a period of nine years.

The ministry is supporting the project to develop bio organs technologies for the treatment of

intractable diseases and facilitate organ transplants. It supports stem cell research and research

into organs as in musculo-sketal systems. To secure source technologies to produce bio

xenogenic organs, the next-generation growth engine, mass-produce the organs, and test them

clinically, the ministry selected the Bio Xenogenic Organs R&D Group, and has started

providing yearly support of up to 4 billion (for 9 years) since 2004.

Since 2002, the ministry has been supporting the project to develop medical equipment by

utilizing new next-generation technologies (BT, IT, and NT), create human-oriented healthcare

environments involving smart equipment, assisting equipment and sense restoration equipment

for disabled people. Furthermore, the ministry is supporting the project to develop medical IT to

support research into medical information standardization and electronic health recording, as

well as the project to develop health-function products such as high added-value foods and

cosmetics.

The ministry is also advancing the project to develop healthcare BT for genome research, and

70


develop technologies for treating intractable diseases as well as high added-value bio

substances and other future core technologies. To research healthcare genomes, proteomes,

life expectancy and ageing, and develop healthcare NT, the ministry designated 12 Research

Centers for Genomes by Disease Group, 3 Research Centers for Pathogenic Microorganism

Genomes, 1 Pharmacogenomics Research Center, 1 Comprehensive Support Center for

Proteomes in Disease Genes, 2 Life and Ageing Research Centers, 1 Nano Artificial Sight

Development Center, and 1 Medical Nano Material Development Center, and has provided

intensive support, in anticipation of establishing a base for reliable, tailored medicine based on

individuals’ genome types. The ministry has also selected and been supporting two Diagnostic

DNA Chip Development Centers, a next-generation growth engine since 2004.

Project name

Project for Developing Novel Drugs

Project for Developing Bio OrganTechnologies

Project for Developing Medical Equipment

Project for Developing Medical IT

Project for Developing Health-FunctionProducts

Project for Developing Healthcare BT

Project for Developing HealthcareTechnology Infrastructure

Total

~2004

1,282

1,109

142

609

5,578

281

109

38

237

1,033

2005

<Table 2-1-6-1> Status of Investment in R&D


The ministry is also pressing ahead with the project to develop healthcare infrastructurecapable of supporting the R&D for BT-based medical science. In particular, the ministry newlyselected 6 regional Clinical Test Centers intended to activate the development of novel drugsand upgrade the clinical test infrastructure to the level of the advanced nations, as well as 6Clinical Research Centers for Solid Tumors, Ischemic Heart Diseases and other pathologies toenhance the status of the nation’s medical infrastructure. Since 2005, the ministry has beenapplying the results of basic research to the healthcare field, and has specified and beensupporting disease-centric translational research in order to activate creative research.

143 77

289 55

2,005 237


71

3) Future Plans

On August 22, 2003, BT-based novel drugs, organs, and chips were selected as the next-generation power industries that will lead our economic growth for the coming 5-10 years.As the competent authority for health care, the Ministry of Health and Welfare will play aleading role in various issues including their technological development, production, andaccompanying bio-ethics.

It is vital that the BT fostering policy for health care distributes limited resources efficientlyby engaging the research fields that are necessary for health promotion, precipitates R&Dand production by employing highly skilled manpower, and gives the necessary policysupport to the development of treatment technologies, new drugs, and medical toolsdestined for the medical domain. The Ministry of Health and Welfare is to pursue the BTfostering policies that are necessary for the rational distribution of resources such ashospitals and medical manpower, as well as the operation of a medical insurance system.

In January 2004, the ministry formed and operated a planning committee designed tointensively foster BT-based novel drugs, organs, and chip fields, formulating a plan for next-generation growth engines in the healthcare sector. In accordance with this plan, theministry is supporting the related projects with the sharing of roles by ministry. At the sametime, the ministry will enact the Life Ethics and Safety Law to address the problems of lifeethics and safety arising from embryonic and genetic research, as well as allowing BT tocontribute soundly to the nation’s health.

The Ministry of Health and Welfare also agreed to a mutual manpower exchange and jointresearch venture by signing an MOU with the U.S. Department of Health on July 22, 2003. Ifan agreement on the approval procedure simplification of the U.S. FDA is reached throughcontinued exchange hereafter, our bio-industries will lay the foundations for competitivenessin the world market.

C. Planning and Construction of Infrastructure

1) Construction of the Osong Bioscience Complex

The project for the Osong Bioscience Complex, which began as part of the health caretechnology innovation plans in 1994, has been fully underway since 2002. With sitecompletion reaching its final stage, a breaking ceremony for construction of the complexwas held on October 27, 2003.

The Osong Bioscience Complex is our first Bio Health Industry Specialized Complex inwhich industrial-educational-research-governmental technology support and businessexchanges can be jointly conducted. The complex is intended to serve as a basis for a

72


series of activities related to bio-industry fostering to be carried out within the complex. Thecomplex will function as a northeastern hub for the bio-industrial field by accumulating theR&D and industrialization activities and constructing the personnel and materialinfrastructure required to link them.

To this end, it is planned not only to transfer to the complex such major national policyinstitutions as the Korean Food & Drug Administration, the Korean Center for DiseaseControl and Prevention, the National Institute of Toxicological Research, and the KoreanHealth Industry Development Institute by 2006, but also to establish by 2007 supportfacilities such as the Health Science and Technology Institute for fostering high-techmanpower, the Biomedical Science Institute for supporting R&D and production, the Bio-health Industry Information Center, and the Business Incubation Center.

Currently, more than 160 enterprises involved in drugs, medical machinery, food, andcosmetics, etc. hope to move into the Osong Bioscience Complex, where the construction ofthe Specialized Complex for Foreign Enterprises has been planned to attract excellentforeign investment enterprises.

2) Genome Practicalization Projects

The Genome Institute at the Korean Center for Disease Control and Prevention isundertaking genome practicalization projects in order to construct the domestic genomeresearch infrastructure related to diseases by collecting and managing the gene sources ofKoreans and pathogenic microbes, and offer the scientific grounding necessary forconstructing a prevention-oriented national disease management system. To this end, 110.3billion won will be invested up until 2010.

Targeting groups in regional communities, the Korean Center for Disease Control andPrevention is conducting a large-scale epidemiological examination into clinical andepidemiological information relating to food, life, nutrition, family history and living habits,and constructing a domestic genome research network in connection with the research intohealth care genomes being conducted as an R&D project. Based on the informationcollected through such projects, a combined information database is being developed toconduct clinical-epidemiologic-genomic-proteomic linkage analysis, and activate thegenomic research in domestic health care by collecting, managing and distributing a total of49,066 genomic samples (immortalizing cell, genome, serum, urine, gene, BAC clone, etc).Furthermore, bio-industrial manpower is being cultivated, and the joint basis technologies forgenomic research are being developed and provided to domestic research teams. Thefoundations for joint domestic and foreign research are also being laid following the closureof an agreement with the Medical Center at Geio University in Japan in September 2003,along with the grounds for genome information exchange and cooperation by holdinginternational symposiums and domestic genome research conventions annually.


73

D. Industrialization Support Policies

If R&D does not lead to product realization and industrialization, national competitiveness

cannot be secured. The technology transfer project for the prompt realization of production

technologies to support industrialization, the construction of an enterprise support fund for

solving the financial difficulties of small-scale health care businesses, and the preparation of

strategies for export promotion of health care industries is underway.

1) Health Industry Technology Transfer Projects

The transfer of technology has been underway since September 2001 when the Health

Industry Technology Transfer Center was established within the Korean Health Industry

Development Institute, whereby investment efficiency is raised through the proliferation of

technologies obtained through investment in R&D. As of 2003, 16 technological transactions

have either been completed or are being conducted. Furthermore, the industrialization of health

care technologies is being supported through a variety of projects including high technology

explanation meetings, health industry technology exhibitions, and patent cost support.

First, technology transfer in the health industry field and the expansion of commercialization

support centers are being established through the operation of an on-line technological

assessment and transfer system centered on the Health Technology Transfer Center.

Secondly, in order to expand the business area of the Health Technology Transfer Center,

overseas technology marketing projects are being pursued on a large scale and opportunities

for technological transfer and the business partnering of domestic health industries are being

provided by seeking overseas partners in the U.S., Europe, and Asia. Patent cost support

projects are also being pursued to establish the industrial property rights of advanced health

industry technologies.

Thirdly, not only is efficient transfer being sought by the construction of a network linking the

institutions concerned (the Korean Technology Transfer Center, the Invention Promotion

Association, the University Technology Transfer Center, and the Metropolitan Area Public

Technology Transfer Consortium), but also by the securing of network and cooperation projects

with the support institutions for technology transfer and commercialization located in the U.S.

and Europe, which are major users of health industrial technologies.

74


2) Construction and Operation of the Enterprise Support Fund

The number of venture enterprises in the bio-health industrial field has undergone aconsiderable increase compared with the period preceding 2000, but it is difficult to expect agreat deal of civil investment, as early investment costs are high and the period of investmentrecovery is long.

For this reason, the Ministry of Health and Welfare is establishing and operating the Bio-investment Cooperative following the revision of the Enforcement Ordinance of the NationalPensions Act in July 2001 by which stock and venture investments of the national pensionsfund may be permitted. The Bio-investment Cooperative, which was established with the aid of5 billion won (comprising 2.5 billion won from national pensions and 2.5 billion won fromdomestic technology investment), began investing 4.4 billion won in 6 enterprises as ofNovember 2003, with plans to expand the scope of investment into promising bio-healthventure enterprises in the future.

3) Health Industry Export Support

As the opening of health industries has been inevitable due to the WTO DDA DDA: DohaDevelopment Agenda. The fourth multilateral trade negotiations agreed at the ministers' talks inKhatar on November 14, 2001. negotiations, technological development efforts andtechnological protectionism are being strengthened by advanced countries-preoccupied withthe strategic priority of the health industries. In order to overcome the various structuralproblems facing the domestic health industry (its small-scale nature, information shortage foroverseas markets, failure to join international quality attestation institutions like the ICH, PIC, orCE) ICH: National Institute of Health Sciences in Japan; PIC: Prior Informed Consent; CE:Certificate of Europe. and strengthen the export competitiveness of the health industry in theface of increased global competition, an organization dealing exclusively with export has beennewly established in the Korean Health Industry Promotion Institute, and strategic preparationsare being made for export expansion and overseas advancement, and the domestication andimport substitution of health industry products.

Support is being given to the participation in first-rate overseas exhibitions classified by thehealth industry in order to back up the overseas marketing of the health industry, and plans areafoot to expand projects including the dispatch of market opening groups to promising overseasmarkets in Vietnam, Russia, etc.

Furthermore, projects for export promotion will be actively developed, notably by providing thehealth industry with import-export related information and by supporting the construction of anexport support network among the institutions concerned, including the overseas branch of theKorean Health Industry Development Institute (KHIDI-Europe) and the Trade InvestmentPromotion Corporation.


75

7. BT Fostering Policies in IT Field(Ministry of InformationCommunication,MOIC)

A. Background

IT-BT fusion technology is expected to become a core technology in addressing future socialproblems such as health problems in the ageing society, and environmental and safetyproblems. Futurologist Alvin Toffler once mentioned that Korea should, based on the fusion ofIT and BT, create new industries and markets, as its future may well depend on fusiontechnologies. The European Union and other advanced nations have recognized thepossibilities being raised by the growth of fusion technologies and their ripple effects, and haveestablished developmental strategies for fusion technologies in order to prepare for the fusiontechnology revolution. In 2004 the EU established strategies for fusion technologies aimed atbuilding knowledge-based societies. Korea, which is strong in IT and IT infrastructure, needs todevelop rapidly the promising fusion technologies backed by its IT, create new markets, andensure safe and healthy lives for its citizens.

B. Prospect for Market

Fusion technology is a technology designed to fuse technologies of different kinds, and createnew products and services or improve the performance of existing products. As such, the IT-BTand IT-NT fusion technologies are being actively pursued, and will most probably lead thefusion of different kinds of technology.

The worldwide IT-BT fusion technology market was valued at USD 22.2 billion in 2005, and isexpected to climb to USD 72 billion by 2010. In particular, the bio-electronics (worth USD 51billion), bioinformatics (USD 10 billion), and bio information interface (worth USD 7 billion)markets are expected to surge.

<Figure 2-1-7-1> Prospect for Major IT-BT Fusion

76


C. Levels of Domestic IT-BT Fusion Technologies

The overall level of Korea’s IT-BT fusion technology is still at the initial stage of development

(70-80% that of the advanced nations). In particular, Korea’s basic and source technology

fields - such as bio computers - lag greatly in terms of the level of technology compared with

advanced nations.

Technology name

<Table 2-1-7-1> Korea’s IT-BT Fusion Technology Level

Stage Domestic status Overseas status Technology level

Bio electronics

Bioinformatics

Bio computer

Bioinformation

Bioinformationinterface

Introduction

Introduction

Germination

Introduction

Introduction

Frontier projectcenter, ETRI*

KRIBB , ETRI

ETRI

ETRI

U.S.: thegovernment(NIH),an

d corporation(Agilent)

U.S.: thegovernment (NIH) Corporations: R&D

U.S.: DNA BTDevelop computer

chip platformtechnologies

Field test in thepublic sector in the

U.S. and Europe

Europe:government-led

R&D

[Development stages: germination stage, introduction stage, growth stage, and maturity stage]

* ETRI: Electronics and Telecommunications Research Institute, KRIBB : Korea Research Institute of Bioscience

and Biotechnology

D. Fusion Technology Industries and Venture Firms

Overseas global IT companies are investing heavily in healthcare, bio chip, bioinformatics, and

other fusion technology fields. Representative global IT companies have advanced the IT-BT

fusion technology field as follows:

<Status of Global IT Companies’ Advancement into the Fusion Technology Field>

Healthcare: Intel, CISCO, HP, GE, Hitachi, Motorola, Philips, Qualcomm, etc.

Bio chip: Intel, Agilent, Infineon Technology, etc.

65%

70%

80%

80%

75%

MOCIE, next-generation new

technology project


77

Bioinformatics: Sun Microsystems, Compaq, IBM, Hitachi, Fujitsu, etc. Korea’s fusiontechnology industries are currently at the initial stage, and a few large corporations and venturefirms are pushing to use fusion technologies and develop and commercialize products.However, fusion technology-related venture firms are short of the related information databases,and thus depend on overseas databases for their R&D and commercialization information.

<Status of Korea’s Large Corporations and the Advancement of Venture Firms into the IT-BTFusion Technology Field>

Large corporations: LG Electronics unveiled a product combining a mobile handset and ablood sugar measurement device in 2004. Venture firms: Macrogen developed a DNA chip for diagnosing hereditary diseases,reaping sales of 11 billion won in 2003. LabFrontier developed a protein chip that achievedsales of 10.7 billion won in 2004.

E. Status of Professional Manpower in Fusion Technology

In 2002, some universities in Korea opened fusion technology-related departments orassociated courses in order to foster specialists in fusion technology. Currently, ten universities(three run related departments, seven run associated courses) have 452 students on fusiontechnology courses. A survey of the industrial community found that about 80% of respondentswere lacking in manpower in fusion technology (KIET, 2004). To develop fusion technology, it isnecessary to analyze the long-term demand for and supply of manpower, and formulatestrategies for fostering professional manpower equipped with academic knowledge and therelevant technologies. Likewise, it is necessary not only to educate IT manpower in other fieldssuch as BT and NT, but also for interdisciplinary majors in industries, schools, and researchcenters to conduct joint research into fusion technologies. It is also necessary to structureinternational cooperation systems designed to secure and foster superior manpower equippedwith global competitiveness. To this end, now is the time to activate international joint researchand human exchange.

F. Analysis and Implications of the SWOT of Korea’s FusionTechnology Industries

Korea’s fusion technology industries receive strong government support and are equippedwith world-class IT and infrastructure, as well as enjoying a broad public reception of newservices. Despite these strengths, they lack technological competitiveness, source

78


technologies, and related professional manpower, and suffer from a weak cooperative systembetween industries, schools, and research centers.

As reviewed above, the worldwide IT-BT fusion technology market is expected to growdramatically (though fusion technology is still at the initial stage of development), and greatpositive ripple effects on diverse industries are also anticipated. Meanwhile, the advancednations that have secured source technologies are expected to take advantage of thecorresponding intellectual property rights and mount attacks on nations lacking them, whilechallenges from emerging nations such as China will also pose a threat. Furthermore, in view ofthe nature of fusion technology, risky long-term R&D investment is required.

Thus, it is imperative to secure source technologies and bolster our competitive edge, as wellas formulate strategies for intellectual property rights over source technologies and attain therequisite technological standards in order to secure competitiveness. It is also necessary tostructure a cooperative system between the different fields of technologies, make efforts tocreate the initial market, and prepare systematic support measures for corporations in order toactivate the fusion technology industries. The fostering of interdisciplinary-trained professionalmanpower constitutes a further essential requirement.

G. Strategic Fields of IT-BT Fusion Technologies

The government forecast the changes and demands for related services, and took intoaccount market size, the time required for commercialization of the related technologies, andthe possibility of securing technologies, outlined the core technologies, and pin-pointed thestrategic fields of the fusion technologies, with a view to meeting future service demandsthrough such technologies.

The future society will fulfill the social need for healthy living and pleasant, safe environments,and expand the demand for new technologies-based services like U-Health in order to satisfythese requirements.

The government reflected the potential demands of the future society, took into account themarket size (30%), the time required for commercialization (30%), and the possibility of securingtechnologies (40%), and selected eight IT-BT strategic technologies such as BT informationanalysis software, bio-sensors, imaging of organisms, bio-chips, sensors of hazardous organicsubstances, signal interfaces for organisms, protection of bio data, and protection of informationon organisms.

The government selected the Pervasive Lifecare Companion as a strategic field of fusiontechnology designed to utilize the outlined core fusion technologies and satisfy the demands offuture society for services to the fullest. The Pervasive Lifecare Companion service seeks tosense individuals’ health state in real time and provide U-Health service designed to helpmanage their health and prevent emergency situations, as well as to sense information on


79

objects and environments in real time, monitor levels of environmental pollution and thepresence of harmful foods, and provide environmentally-related services such as disaster andcalamity warning systems.

Demands of the Future Society

<Table 2-1-7-2> Prospects for the Demands and Services of the Future Society

Demands forServices

Healthy andpleasant life

Pleasant and safeenvironment

Monitor the elderly people’s health andremote-diagnose them Give constant examination to patientssuffering from adult diseases, chronicdisease and others Tailored health management program Monitor and warn exposure to harmfulsubstances

Monitor residential environments andprevent environmental pollution Monitor environmental pollution/tracethe movement path of pollutants Structure effective disaster/calamityprevention systems

U-Healthservice

* Source : Issues and Demands of the Future Society for Forecasting Science and Technology (STEPI, 2003) as rearranged

<Figure 2-1-7-2> Policy Pursuit System of IT-based Fusion Technologies

Healthy life

Safety/environmentmonitoring service

80


H. Development Vision and Pursuit Strategy of Fusion Technologies

The government is set to strengthen the nation’s IT fusion technology R&D, facilitate the

industrialization of fusion technologies, and create the initial market, thereby ranking the nation

among the world’s three IT fusion technology powers and gaining a 5%+ share of the global

fusion technology market by 2015. As such, it is poised to create a base for fulfilling a healthy

and safe future society.

The policy for the development of IT-BT fusion technologies is as follows: (i) early occupation

of technologies in strategic fields; create the initial market; and synchronize the facilitation of

industrialization to achieve cyclical development of fusion technologies; (ii) pursue strategies for

developing the existing NT/BT technologies and differentiating service-oriented technologies

(synchronization with source technologies/parts and materials/systems); (iii) expand

interdisciplinary research forums where experts in diverse fields of technologies can freely

research and discuss; (iv) install and operate an organization to closely oversee, coordinate,

and develop fusion technology development strategies, R&D, manpower, and the fostering of

related industries; (v) seek interdisciplinary joint research, and install and operate a cooperative

system to share roles among industries, schools and research centers, and between related

ministries and agencies.

I. Plans for IT-BT Fusion Technology R&D and Industrialization

The ministry will gradually create a base by 2015 for fulfilling diverse tailored Pervasive

Lifecare services to measure obesity, stress, and other health conditions, examine cancers and

chronic diseases, monitor harmful living environments, and thus ensure a healthy and safe

living environment.

The ministry will structure a Digital Convergence Center for Korea to serve as the hub of

fusion technology R&D. The center seeks to gather and provide domestic and overseas trends

on fusion technology-related technologies, markets and policies, provide support to conduct

interdisciplinary research and international joint research and establish strategies for fusion

technology development and industrialization, and provide services such as the common use of

facilities for testing and accrediting fusion technology-based products and services. The ministry

is also poised to strengthen basic research capabilities at universities and attract overseas R&D

centers with the aim of establishing a strategic cooperative system for research with advanced

nations, as well as to develop core and source technologies aimed at expanding international


81

technology patents, thereby achieving early occupation of the future markets and bolstering

global competitiveness.

To foster manpower in the IT-BT technologies, the ministry seeks to first establish mid- and

long-term plans for the demand and supply of manpower in the fusion technologies, as well as

to foster core manpower in diverse fields through universities and others in the long-term, and

attract superior overseas personnel. In particular, the ministry is set to structure a reeducation

system of tailored frontline technologies that fits the characteristics of the fusion technologies.

To create the initial market for IT-BT fusion technologies, the ministry will explore related

model businesses, and pilot-operate them in both u-cities and corporate cities. MOST, in

consultation with MOHW and the Seoul Metropolitan Government and related agencies, is set

to explore one model business every year from 2007 ~ 2010. The ministry will also devise

measures to foster firms providing fusion technology-related products and services, and to ease

market entry regulations.

To facilitate investment by IT firms in the fusion technology field and formulate fusion

technology-related regulations, the ministry will consider structuring industrial cities of fusion

technology, transfer technologies owned by state-funded research institutes to the related

private sector, and expand joint R&D projects, thus providing support to venture firms in the

fusion technologies to develop and industrialize the related technologies.

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8. BT Fostering Policies in the Environmental Field(Ministry of the Environment,MOE)


A. Necessity of Technology Development

1) Environmental Biotechnology

In general, Environmental Technology (ET) concerns technology which reduces, prevents,

and rehabilitates environmental pollution. The Law on Environmental Technological

Development and Support defines ET as a technology which improves the self-purifying abilities

of the environment, suppresses and eliminates environmental damage-inducing factors (human

and natural), as one needed to maintain, manage, and rehabilitate a polluted and damaged

environment, and as one which will help to prevent environmental pollution in the first place.

In the field of ET, EnviroBio Technology (EBT), which has been created through the

application of biotechnology (BT) and the bio-processing of ET in order to reduce, prevent, and

rehabilitate environmental pollution, requires the organic cooperation of environmental science,

ecology, and molecular biology.

Of the basic core biotechnologies Technologies for manipulating genes (genetic engineering),

cell fusion technologies (cell engineering), massive cell culturing technologies (cell culture

engineering), bioprocess technologies (enzyme engineering), and technologies for utilizing

microorganisms (microbial BT)

EBT utilizes mainly bioprocess technologies (fermentation process control, separation and

refinement, and design and manufacturing of culturing equipment) and technologies for using

microorganisms (technologies for separating and culturing microorganisms and exploring

anticancer substances). Such EBT has not yet proven its role and weight to a great extent, but

with the recent positive development of cutting-edge technologies in various fields, EBT is

expected to expand from the remediation of polluted environments to pollution prevention and

pollutant detection based on biological methods.

2) The Shift of the Environmental Technology Development Policy Paradigm

The development of environmental technology is moving in the direction of methods for

dealing with the environmental problems which have arisen as a consequence of the drastic

development of scientific technologies such as bioscience, new matter, IT, etc. The combined

access strategies of both technological and social science research are being strengthened, as

the environmentally conscious approach to environmental problems shifts from a meso-level


83

perspective of unit systems to the macro-level perspective of a network concept. At the same

time, the pursuit of an environmental policy based on the scientific clarification of nano-levels

has been made possible by the fact that environmental problems can now be explained at the

nano-level following the development of nano technology and the electronic microscope.

Description

<Table 2-1-8-1> Changes in the Field of ET

Environmentalrecognition

Main features oftechnology development

Academic area

1st generationenvironmental

technology R&D

It is inevitable to createpollutants in the courseof pursuing economicdevelopment

Waste treatmenttechnologies

Environmental/chemicalengineering, andmechatronics

2nd generationenvironmental

technology R&D

Minimize the creation ofenvironmentalpollutants fundamentally

Prevent pollution andproduce environment-friendly products

Environmental/chemicalengineering,mechatronics, newmaterials, and BT

3rd generationenvironmental

technology R&D

Maintain sustainableenvironments from theperspective of socio-economic integration

Restore, preserve andreproduceenvironments, andforecast and responseto environmentalchanges in the long-term

BT, new materials, nanotechnologies, IT, etc.

<Figure 2-1-8-1> Changes in the Paradigms of ET Development Policies


84

To effectively respond to diverse environmental problems and the ever increasing

complexities of modern societies, it is imperative to pursue new scientific and technological

knowledge-based environmental policies and cope with the increased demands for developing

EBT through synchronization with BT and other new technologies.

B. Status of Domestic and Overseas Development of EBT

As international environmental issues such as the destruction of the ozone layer, greenhouse

gases, biodiversity, and the need for international environmental regulations gain in global

importance, the United States, Japan, and other advanced nations are pushing to positively

develop technologies that effectively respond to environmental problems in order to keep their

industries competitive.

Major advanced countries are also actively promoting environmental (human & ecological) risk

assessments for modified living organisms (LMOs) following the development of biotechnology.

The environmental risk assessment for existing chemicals and new chemicals from the

development of the pharmaceutical and chemical industries has also come to prominence due

to the problem of endocrine disrupting chemicals. Since the 1990's continued soil and

underwater pollution has been recognized as an environmental problem that requires enormous

long-term funding to aid recovery. Thus, many advanced countries have promoted the

development of technologies for ecological conservation and recovery to deal with this problem.

1) USA

As regards technology for the prevention of water pollution, the development of advanced

treatment technology for the removal of nitrogen and phosphorus and the prevention of the

eutrophication of sewage disposal plants, the development of treatment technology for

wastewater and sewage, and the development of a closed system that does not discharge

wastewater have all progressed to the commercialization stage using BT technology.

As to preventive measures for pollution, the following areas have attained partial levels of

commercialization: the development of clean substances including plastics and surfactants that

can fundamentally eliminate environmental pollution by changing chemical substances into non-

pollutant or low-pollutant materials; the development of photodegradable polymers than can be

degraded by sunlight, biodegradable polymers that can be degraded by microorganisms, and

naturally-degradable polymers possessing both these characteristics.

Among the environmental recovery technologies, bioremediation-related technology is used in

the treatment of oil spills, soil pollution by leakage from oil storage tanks, polluted underground


85

water, sediments, and surface water.

2) Japan

Technology using microbes is now widely utilized, but the degradation and treatment of

insoluble substances has not progressed well. Natural or microbial surfactants with a high level

of biodegradability are under investigation, and carbon dioxide fixation technology has been

intensively investigated using micro-algae in earth environment conservation technology.

Bioremediation technology for polluted sites has not been commercialized, but the activities of

related companies are gradually progressing, including a budget increase for bioremediation

guidelines.

3) Korea

The development of technologies using microbial agents is underway, the major ones of which

include microbes that degrade organic substances and, more specifically, those that degrade

insoluble substances or eliminate bulking condition. The use of bio-cubes (microorganism

attachment materials such as activated carbon) and the development of bio-media (fluidized

bed such as plastics and fixed bed such as cilia biofilm) in the wastewater treatment system are

also being developed. However, the scale and range of research are limited and the overall

level of the technology is insufficient compared to that of the advanced countries.

C. EBT Fields relating to Next-generation Core ET DevelopmentProjects

The ministry has been pushing the next-generation ET project dubbed as Eco-Technopia

(ET21 project) since 2001 to intensively develop promising ET, positively address

environmental problems, enhance life quality, keep both the environment and economy vibrant,

and ensure that the nation is geared towards sustaining enhanced environment and welfare

status.

The ET21 project seeks to utilize the environmental research capabilities acquired from the G-

7 environmental engineering project (‘92 ~ ’01), intensively develop source technologies and

next-generation technologies in preparation for future environmental demands, and also

develop technologies for addressing pending environmental problems and promising export

industrial technologies, with an investment total of one trillion won over ten years (2001 ~ 2010;

100 billion won yearly). Investment figures are: 50 billion won in 2001; 70 billion won in 2002; 75

Total

2001

2002

2003

2004

2005

billion won in 2003; 88.4 billion won (including 3.4 billion for reinvestment in technological

royalties) in 2004; and 88.2 billion won in 2005.

Project achievements as of June 2005 include 835 cases of the application and registration of

intellectual property rights, 4,174 instances of research being published in academic journals

and presented at forums, and 170 technology execution contracts (contract money of 13.3

billion won). In terms of industrial competitiveness, achievements such as exports worth 7.6

billion won, construction worth 160.2 billion won, and domestic product sales worth 25.6 billion

won are worth noting.


86

Classification

<Table 2-1-8-2> Investment plan for the ET21 project

Stage 1(2001~2003)

Stage 2<estimate>(2004~2007)

Stage 3<estimate>(2008~2010)

Basic goals

Investment(0.1 billion won)

Success in raising ETlevel to 5th in the world

2,950

1,950

1,000

6,600

4,600

2,000

4,950

3,450

1,500

Total

Government

Private

14,500

10,000

4,500

<Table 2-1-8-3> BT-related Projects among ET21 Projects

Project yearNo. of contract

projects

1,537

219

317

340

365

296

State-providedsubsidy

ET 21

3,716

500

700

750

884

882

No. of contractprojects

384

43

68

90

103

80

State-providedsubsidy

763

99

126

171

189

178

%

29

20

18

23

22

20

BT-related projects among ET21 Projects

Security of pendingenvironmentalpollution treatmenttechnology

Security ofmedium-termstrategicenvironmentaltechnology

Security of futuresourceenvironmentaltechnology


87

There are 4 main ET areas grafted with BT in the ET21 Project:

1. The development and improvement of microbial strains includes: the isolation and culture of

microbes; the design and manufacture of incubators (bioreactor development); the

separation and purification of proteins; the development of bio-filters for the elimination of

foul odors/VOCs; the fermentation evaporation system; and the development of complex

microbial agents that degrade insoluble organic substances(oils).

2. The development of bio-analysis technology includes: the manufacturing technology and

control system for multi-sensors for indoor air quality, a DNA micro-array technology

enzyme sensor, lab-on-a-chip technology, and DNA diagnostic methods.

3. The improvement of the treatment process includes: the development of a new process for

high concentration wastewater treatment and the development of an integrated control

system; the examination of the information treatment function of microorganisms; and the

development of an environmental monitoring system.

4. The utilization of unique biological resources includes: the decay and the proliferation of

phagocytic animals (insects).

BT-related projects account for 20% of the ET21 projects as follows.

D. Directions for Future Promotion

As part of the ET21 Project, the Next-Generation Core Environmental Technology

Development Project was prepared (July 2002) to set goals for core technology development,

elaborate a Technology Road Map (TRM), and create a fund-raising plan by establishing

medium- to long-term environmental technology developmental goals and measured project

goals in stages and areas based on domestic and foreign environment technology. Thus, in

accordance with the TRM, first-rate EBT with high utilization and a degree of environmental

improvement was to be selected and intensively supported over a medium- to long-term time

scale.

As the Stage 1 project (2001 ~ 2003) nears its end, research output and weaknesses have

been analyzed, showing that the it promoted systematic technological development on the

basis of the TRM, although the actual reflection of the pluralistic promotion strategy that was

required for the10-year master plan was considered insufficient for maintaining a one-way

project structure such as supporting the practicalization and commercialization-centered (80%)

individual project.

Thus, the second stage seeks to reflect the strategies of the 10-year master plan, and diversify

support size, support period, project management, and other support conditions according to

the project pursuit types such as project groups, projects for developing practical supporting

technologies, and projects for developing future source technologies. In particular, the project to

develop future source technologies seeks to synchronize with BT and other new technologies,

further bolster ET competitiveness, and address environmental problems in the areas of

atmosphere, water quality, waste, ecosystems, soil, and hazards management. It thus aims to

enhance the life quality of Korean citizens, lead the development of new future-oriented ET

products, and secure science and technology-based environmental management capabilities

on a level comparable with that of the advanced nations, including the securing of standard

environmental technologies based on scientific research.

New technology includes technology that has not yet been fully commercialized, and base

technology that can create a promising industry for the future by improving or replacing

conventional industry. The ET field has grown rapidly in the wake of IT to form a new industry,

but its level is far behind that of the advanced countries, while the technological level of

domestic IT is as developed as 60 ~ 70% of the advanced countries. It is now believed that the

long stagnation of the Japanese economy is due to "the lack of industrial reorganization

centering on new technology", and that the lack of investment in new follow-up technologies

such as ET and BT will become an obstacle to growth in the future, except in IT,-which has

grown by keeping pace with international trends in the IT industry.

The early occupation of new industrial markets in the future through investment in new

technologies will inevitably be adopted into our survival strategy for continuous growth, hedged

between the rapid growth of developing countries such as China and a further technological

upsurge in advanced countries such as the USA. R&D investment in new follow-up

technologies in the ET field will be expanded to maintain the vitality of our economy and to

maintain growth. To attain the overall development of environmental technology and investment

in advanced environmental technology,-public interests such as pollution prevention measures

grafted with new technologies like IT and BT, environmental recovery, and the conservation of

the global environment will be expanded continuously.


88

9. BT Fostering Policy in Marine Biology and Fisheries(Ministry of Maritime Affairs and Fisheries,MOMAF)

89


A. Introduction

BT, together with IT, NT, aerospace technology, ET, and cultural technologies, constitutes the

primary field of cutting-edge technology and will lead the development of the nation in the 21st

century. As such, BT can address the crucial issues faced by humankind such as the surge in

population, the exhaustion of resources, and environmental pollution, playing a revolutionary

role in changing human lives. In BT-related R&D and industries, marine BT using marine biota

has gained in importance. The ocean represents about 71% of the earth’s surface and is

inhabited by 80% of the earth’s animals and plants, while the peculiar bio structures and bio

functions of marine biota that are adjusted to diverse marine environments are crucial material

for BT. As the search for useful new materials shifts from landside biota to marine biota the

development of unmanned submarines and other cutting-edge equipment will enable us to gain

access to polar zones and deep sea waters that were inaccessible in the past, and explore and

report on new deep-sea marine resources, thus expanding the scope of research. Marine BT

has a wide range of applications such as the securement of gene resources in marine biota, the

production of drugs and new materials using marine natural materials separated from marine

biota, the production of fishery food resources through molecular breeding and the genetic

transformation of useful marine biota, and the management of genetically modified marine

products in the fields of environment, industrial new materials, food resources, health, hygiene,

and energy Korea Ocean Research & Development Institute. 2005. Marine Bio.

The ministry, aware of the importance of marine BT, is pursuing policies to foster the marine

bio-industry as a natural cutting-edge industry of the future.

B. Current Situation

1) Policies for Fostering Marine BT

MOMAF, through the Marine Development Basic Plan (1996) and Marine Korea 21 (2000),

aims to ensure Korea’s status as a first-class nation in the 21st century marine age,

Korea Ocean Research & Development Institute. 2005. Marine Bio.

announcing plans to foster marine BT using cutting-edge marine science and technology. In

2000, the ministry produced planning and research reports concerning the future of marine BT,

thus laying the groundwork for establishing and implementing comprehensive systematic

developments in this field. The ministry established the Marine Bio 21 Project in 2004 and, since

October of that year, has been implementing the project. In particular, the ministry established

marine technology (MT) development plans designed to bolster the competitiveness of the

marine industry and strengthen the management of marine territory.


90

<Table 2-1-9-1> BT R&D Investment Results in the Government and MOMAF

(Unit: 100 million won, %)

Description

2004

2005

Change(%)

R&D

Government MOMAF

4,246

4,877

Infrastructure

1,770

2,209

Total

6,016

7,086

17.8

R&D

46

62

Infrastructure

18

21

Total

64

83

29.7

According to the plan, the ministry is set to invest over 300 billion won over the next ten years

in order to systematically manage the small-scale projects currently implemented on a sporadic

basis, apply BT to the restoration of fisheries resources, cutting-edge farming, and

development, and the use of marine biota and gene resources, and foster them as future major

industries. MOMAF (2004) Development Plan for Marine Technology

Marine BT-related R&D budgets totaled just 3.4 billion won in 2001, but they were increased to

6.4 billion won in 2004, and then to 8.3 billion won in 2005, signaling a steady rise. See <Table

2-1-9-1>. Compared with other ministries, MOMAF has yet to boost R&D investment. The

ministry accounted for only 1.2% of the government’s BT R&D budgets for 2005, although it

increased its own investment in this field by 29.7% from the previous year. This figure is much

higher, given that in 2005 the government increased BT investments by 17.8% on the previous

year. The ministry is set to continue increasing the R&D budget every year, with a budget of

over 10 billion won scheduled for 2007, in order to contribute to the development of marine BT.

In March 2005 the ministry formulated measures for the structuring of management systems

MOST and others, 2005 Implementation Plan for BT Fostering Measures

MOMAF (2004) Development Plan for Marine Technology


91

for marine fisheries R&D projects and for activating these projects, placing the R&D projects

managed by various departments under the control of the Marine Policy Bureau. Furthermore,

starting in 2006, the ministry is pushing to establish a marine fisheries research management

agency, and integrate the management of R&D projects that are currently commissioned for

management by the National Fisheries Research & Development Institute, KORDI, and the

Korea Maritime Institute. With the planned operation of the agency, it is expected that initiatives

by experts will be activated to forecast research trends and technologies in the related fields

and survey demands for the technologies, while systematic management aimed at

industrialization will be made possible, thereby boosting R&D efficiency.

2) Major R&D Projects

(A) Marine Bio 21 Project

The Marine Bio 21 Project aims to invest 250 billion won in research from 2004-2013,

intensively develop cutting-edge marine BT, and foster the marine bio-industry as a leading high

added-value growth engine for the 21st century. Under the project, the three major projects -

namely, research into the molecular genomics of biota in marine and extreme environments,

marine bioprocess research, and research into novel drugs based on natural marine

substances - are conducted by research groups at KORDI, Pukyong National University, and

Seoul National University. The project will massively explore useful genes in marine biota,

develop technologies for using them, develop new materials for use in the marine industry, for

environmental use, and as marine functional foods, candidate substances for novel drugs, and

disease treatment drugs, thereby utilizing marine BT and industrialized high added-value

marine biota resources. MOMAF. 2004. Marine Bio 21 Project Plan. The ministry has also

incorporated a project (conducted since 1999) for using marine biota and developing useful new

materials into this project, thereby further synchronizing related research programs. The ministry

has linked a project for researching useful biota resources in extreme environments and

developing marine biota resources in the Southwest Pacific with this project, creating the

momentum to utilize biota resources in extreme environments and overseas research bases

and expand the scope of marine BT R&D.


92

<Table 2-1-9-2> Major Marine BT Research Projects

2004 2005 Description

30

16

0.42

17.38

63.8

Project name

Utilize marineorganisms anddevelop useful newmaterials

Total

Outline

Utilize marine BT andindustrialize marineresources into highadded-value products

Secure gene resources ofmarine organisms,preserve species andutilize BT and thusdevelop new farmedproducts

62

-

0.3

20.5

82.8

R&D

R&D

R&D

Infrastructure


<Figure 2-1-9-1> Major Research Contents of the Marine Bio 21 Project

-

Marine BT 21Project

Structure safetymanagement system formarine LMOs, andoperate LMOs’ biosafetyinformation center

Research forassessing the safetyof marine LMOs

Development ofmarine BT


93

(B) Research Safety Evaluation of Marine Living Modified Organisms

Since 2003, the NFRDI has provided a structured safety management system for fisheries

and marine living modified organisms with the aim of researching the safety evaluation of

marine LMOs, and a bio safety information center for fishery and marine LMOs. The research

aims to establish technologies for assessing the risk of fishery LMOs and prepare for

international regulations following the export and import of fisheries, as well as designate and

operate agencies for assessing the risk of marine fishery LMOs and manage an accreditation

marking system.

(C) Development of Marine BT

To structure a bank of marine biota gene resources aimed at securing bio resources, the

NFRDI is conducting research into genomes and molecular breeding with the aim of developing

superior breeds, and developing technologies for utilizing them, as well as research into the

industrialization of fisheries in order to extract functional natural substances from fishery and

marine biota resources and create high added-value fishery-based food and medicine

industries. It also operates a gene information bank of organism resources designed to conduct

genetic analysis of Korean native breeds, target breeds for farming, and explore foreign-

transplanted breeds, and operates a gene resources bank. It also conducts research into the

improvement of farmed organisms to enhance the major target breeds for farming under the

breeding program research.

<Figure 2-1-9-2> System for Pursuing the Project to Structure infrastructure

3) Future Project Direction

Although the marine bio-industry is not yet at the market forming stage, it appears to have a

high market potential and requires intensive state investment. In particular, since Korea’s basic

BT level does not greatly differ from that of the advanced nations, the application of its existing

BT to marine organisms will trigger further research. Furthermore, Koreans enjoy marine

products traditionally, and Korea possesses many world-recognized farming technologies, while

its high-growth technologies for developing transgenic fisheries are already at the level of

advanced nations. Thus, if intensive investment is made, Korean marine BT can effectively

reach world-class status in a short period of time, enter the ranks of the world’s five marine BT

powers, and take a 5% share of the global marine bio-industry market. The ministry is dedicated

to exploring projects with a high possibility of being industrialized, prompts such industrialization

at an early date, fosters the marine bio-industry, and utilizes genetic breeding technologies

aimed at developing new breeds and producing premium fishes, with the ultimate goal of

ensuring a stable supply of foods. It is also committed to developing technologies for managing

diseases in marine products and safety technologies for marine LMOs, thereby bolstering

confidence in marine foods and environments.

The international marine BT field is developing very rapidly. Korea was late in entering the

marine R&D field compared with its other BT fields, and has yet to boost the relevant budgets.

However, to help the nation enter the ranks of marine BT powers, the government will offer

strong support to the systematic establishment of related plans, the structuring of related

infrastructures, and the development of the necessary technologies. Related research groups

are of course required to develop the basic and practical technologies, while industries should

lead the development of technologies for industrialization. As such, each sector has an

important role to play in the development of marine BT.


94


95

Section 2

Biotechnology Competitiveness Index Situation


A. R&D Investment Status by Government

1) Trends in the Size of the R&D Budget

The government of Korea formulated the Science and Technology Basic Plan (2003 ~ 2007),

which is designed to promote a science and technology-centric society and create a science

and technology-strong nation by emphasizing the role of science and technology in running the

state. In accordance with the plan, Korea’s science and technology policies seek to reflect the

inter-ministerial National Technology Roadmap formulated in 2002 in the major national

strategic technologies development plans, and present five major projects and technology

development directions for the future, centered on the concepts of knowledge acquisition,

healthy living, information access, the creation of the ‘intelligent’ society, and the attainment of a

sustainable, development-led society. To develop core and strategic technologies in these

categories through the principle of selection and concentration and the pursuit of vigorous next-

generation growth-engine industries from 2004, the government prepared to increase its R&D

investment each year at rates higher than those of its total budgets.

The government earmarked total R&D budgets for 2004 at 6.0273 trillion won including

general and special accounts, up 45.05 billion won (8.1%) on 2003’s 5.5768 trillion won. The

government’s total R&D budget - including general and special accounts - represented 4.8% of

the total budget for 2004, up 0.3% on 2003’s 4.5%.

96


The government’s R&D budget direction for 2004 was characterized mainly by intensive

support for next-generation growth-engine industries, continuous expansion of investment in

basic research, budgetary measures aimed at addressing youth unemployment and the

shortage of science and technology majors, and decentralization. The budgetary trends for the

government’s R&D investment over the last three years are shown in <Table 3-2-1-1>.

<Table 2-2-1-1> Trends in the Size of the Government’s R&D Budgets (2002 ~ 2004)


Description

R&D Budget size

(general account, A)

(A/B, %)

General account and

special account

Government’s budget size

(general account, B)

2002 budget 2003 budget(A)

52,678

55,768

1,181,323

2004 budget(B)

56,751

60,273

1,183,560

(B-A)

4,073

4,505

2,237

%

7.7

8.1

0.2

Change

48,501

51,583

1,096,298

Source: Government’s R&D Budget Status for 2004 (KISTEP)

(2) R&D Budget Status in 6T’s

The government has selected six promising new future technologies aimed at creating future

growth engines such as biotechnology, nano technology, information technology, environmental

technology, space technology, and cultural technology, and is intensively expanding investment

in these fields. R&D investment in these 6 categories represented 29.9%(1.8022 trillion won) of

the total R&D budget for 2004, up 7.4% (124 billion won) on 2003, and continues to rise in line

with the government’s policy to expand investment in future promising new technologies. The

budgetary status of promising new technologies over the last three years is shown in <Table 2-

2-1-2>.

(4.4) (4.5) (4.8)


97

<Table 2-2-1-2> Current budgetary status of promising new technology(2002 ~ 2004)

Description

Budget Ratio Budget (A) Ratio Budget (B) Ratio (B-A) %

BT

IT

NT

ET

ST

CT

Total

R&D budget

4,329

4,513

1,740

2,311

1,799

134

14,826

8.4

8.7

3.4

4.5

3.5

0.3

28.7

4,964

5,015

1,992

2,718

1,844

249

16,782

8.9

9.0

3.6

4.9

3.3

0.4

30.1

5,504

4,726

2,158

3,184

2,207

243

18,022

9.1

7.8

3.6

5.3

3.7

0.4

29.9

540

-289

166

466

363

-6

1,240

4,505

10.9

5.8

8.4

17.1

19.7

2.7

7.4

8.1

(OECD, January 2005)

51,583 55,768 60,273

2002 2003 2004 Increase / Decrease

Data: Government's R&D budget status (KISTEP) in 2004. These values were calculated by estimation and differfrom the values of the promotion plan by area, and may be used as reference data to examine the budgetdistribution among technologies.

Figures for the distribution of the government's R&D budget distribution in these 6T areasshow that IT was the recipient of the highest amount up until 2003, but that BT received thehighest amount from 2004 at 9.1% (550.4 billion won). The overall budget in the IT field wasreduced because the MOCIE’s projects for developing e-commerce technologies andstructuring B2B networks in the industrial sector in accordance with the readjustment of R&Dproject criteria were excluded. The budget in the BT field was increased because the budgetsfor research into functional human genomes and technologies for utilizing microbial genomesout of MOST’s 21st Frontier R&D Project were increased, and because the budgets for theMOCIE’s BT Industrializing Technology Center and the MOHW’s bio- health technology R&Dwere raised.

B. Status of Major Ministries’R&D Investments in the BT Field

1) Government’s Investment Status in the BT Field

Government investment in biotechnology has been promoted by the Biotech 2000 initiative,which was established in 1994 following the enactment of the Biotechnology Fostering Law.Since 1994, when the Basic Plan for BT Fostering was formulated, the government’s budget inthe field has continued to rise at an annual rate of 28%. The government’s BT R&D budgetstatus is shown in <Figure 2-2-1-1>.

98


2) 2005 Investment Plan

In accordance with its 2005 BT Fostering Working Plan, the government’s investment totaled

708.6 billion won, consisting of 487.7 billon won for R&D, up 14.9% from 2004, and 220.9 billion

for infrastructure, a year-on-year increase of 24.4% <Table 2-2-1-3>. Such a budget increase is

mainly attributable to the fact that 106.8 billion won was invested in MOCIE’s infrastructure

support project, while 6.2 billion won was allocated to MOMAF’s Marine Bio 21 Project, 10.2

billion won to MIC’s BIT fusion source technology development project, 41.9 billion won to

MOST’s nano-bio project, 22.4 billion won to MOE&HRD’s BK21 Project, 29 billion won to

MOHW’s novel drug development project, 30.8 billion won to MOAF’s Bio Green 21 Project,

and 19.5 billion won to MOE’s next-generation core environmental technologies development

project.

<Figure 2-2-1-1> Government’s Budget Status in the BT Field

<Table 2-2-1-3> R&D Investment Plan by Ministry

2005Invest-mentPlan

Ministry

R&D

Total

Descrip-tion MOST MOE&

HRD

609

183

792

MOAF

801

1,088

1,889

MOCIE

686

692

1,378

MOHW

102

40

142

MIC

195

18

213

MOE

62

21

83

MOMAF

4,877

2,209

7,086

Total

(Unit: 100 million won, %)

Year

2,158

167

2,325

264

-

264

Infra-structure


99

The government’s investment plan for 2005 is based on the BT Fostering Working Plan.

By ministry, four ministries - MOST, MOCIE, MOHW and MOAF - have made solidinvestments in the BT field, with MOST accounting for 32.8%, MOCIE 26.7%, MOHW 19.4%,and MOAF 11.2% <Figure 2-2-1-2>.

<Figure 2-2-1-2> Government’s BT Investment Ratio by Ministry (2005)

Project name

21st Frontier R&D Project

Bio Novel Drug and organ cloning and transplanting

Project

Detailed project name

Functional human genome project, Plant diversityresearch program, Crop functional genomics project,Biological modulator development project, Microbialgenome utilization technology development project, Cellapplication research project, Proteomics utilizationproject, and Brain function utilization and brain diseaseresearch project

Bio discovery project , Bio fusion project, Bioinfrastructure project, and Bio co-work project

Project to develop source technologies for producingtransgenic pigs for use in organ transplantation, Proteinchip technology development project, Intelligent drugdelivery system technology development project, andImmunity function control technology development project

Total

646

100

1,168

Detailed projectname

<Table 2-2-1-4> Investment Status of MOST’s Major Projects


BT R&D Project 422


100

3) Status of the Four Major Ministries’Investment

(A) MOSTOf the pan-ministry projects of the 21st Frontier R&D Project, the following received

investments totaling 64.6 billion won. These include the project to analyze the functions ofhuman genomes and develop technologies for diagnosing, preventing, and treating stomachcancer and liver cancer; the project to preserve and utilize plant diversity and develop naturalnew functional foods and drugs; the project to research the structure and function of cropgenomes and develop practical technologies aimed at fostering breeds; the project to developcandidate substances and new technologies for synthetic novel drugs for the treatment of adultdiseases; the project to utilize information from microbial genomes and develop technologies forredesigning and applying high-function cells; the project to develop technologies for regulatingstem cell differentiation and clinical treatment technologies; the project to research cutting-edgeproteomics and drugs for treating commonly occurring group-specific diseases; and the projectto research the function of brain genomes, as well as brain hyper-function and the coremechanisms involved in brain diseases. Furthermore, a total of 42.2 billion won was invested inthe BT R&D project (Bio Discovery, Bio Fusion, Bio Infrastructure, and Bio Co-work), and a totalof 10 billion won was invested in bio novel drugs and the organ cloning and transplanting project(next-generation growth-engine projects) <Table 2-2-1-4>.

(B) MOCIEThe ministry invested 69.5 billion won in short-, mid-, and long-term projects to develop

technologies, and 105.3 billion won in infrastructure, totaling 174.8 billion won in the BT field(excluding the development of bio energy). The mid- and long-term R&D projects are focusedon drugs, bio chips, and IT-NT fusion technologies, while the short-term projects concentrate ondrugs, materials, foods, diagnostic devices, and other medical equipment <Table 2-2-1-5>.

Description

Mid- and long-term

Project name

Parts materials development; Common coretechnologies development; New technology-practicalization technology development; Region-specific technology development; Project for thedissemination of environmentally-friendly productiontechnologies

Total

475

220

695

2005 budget

<Table 2-2-1-5> Status of MOCIE Investment in Major TechnologyDevelopment Projects (Unit: 100 million won)

Short-term

Mid-term foothold technology development; Next-generation new technology development; Growth-enginetechnology development; Bio star project; bio fusionproject; Bio challenger; International cooperation-basedtechnology development; and core platform development


101

Description Project name

BT Industrializing Technology Practical ApplicationCenter; Biosafety Information Center; LMO RiskAssessment Center; Structuring of the Korea Bio-Hub;Structuring of joint research base among industry,schools and research centers; Proteomics bio-information infrastructure; Structuring of bio drugproduction facility standardization base; Project to fostermanpower for industrializing technologies; Structuringof bio-industry technology transfer base

Regional technology innovation centers; Nine municipaland provincial regions specialty centers; Two-stepregional specialty centers in four cities and provinces;Regional innovation specialization model project; Projectfor technological support in four regions; and Project tofoster manpower in four regions

Total

2005 budget

<Table 2-2-1-6> Status of MOCIE Investment in Major InfrastructureDevelopment Projects


For the infrastructure project, the MOCIE is focused on developing industrial infrastructures for

cGMP, safety assessment, preclinical facilities and standardization, and aims to structure bio

centers suitable to municipal and provincial-suitable situations aimed at ensuring balanced

regional development <Table 2-2-1-6>.

(C) MOHW

The ministry has invested intensively in R&D for bio novel drugs, bio organs, bio chips, and

other next-generation healthcare growth engines, and supported the advancement and

globalization of domestic novel drug development based on cooperative research with

advanced nations. In preparation for the now rapidly ageing society, it has also invested in

research into life and ageing to help maintain healthy lives and prevent the degenerative

diseases generally suffered by the elderly.

Furthermore, the ministry has developed infrastructures aimed at facilitating the development

of healthcare technologies in order to activate the project to industrialize healthcare

technologies such as technology assessment, technology intermediation, and support for

business initiation <Table 2-2-1-7>.

1,053

Structuring of infrastructure 340

713Regional projects


102

Project name 2005 budget

Novel drug development project

Bio-organ technology development project

Medical device and equipment technology development project

Medical information technology development project

Health functional product development project

Healthcare BT development project

Healthcare technology infrastructure development project

Korean medicine-based treatment technology development project

Osong Life Science Complex Creation project

Total

290

80

113

39

57

245

210

65

279

1,378

<Table 2-2-1-7> Status of MOHW Investment in Major Projects


Organizing agency

MOAF

Rural DevelopmentAdministration

Korea ForestryService

National VeterinaryResearch and

Quarantine Service

Project name

Agricultural and forestry technology development project Bio-organ production research project

Bio novel drug production research project Agricultural organisms development project Agricultural BT development project Infrastructure development project (including the establishmentand operation of an agricultural BT information center)

Development of technologies for producing and exploiting thehigh value of forestry resources

Veterinary science technology development project

Total

5645

9

98

762

2005 budget

<Table 2-2-1-8> Status of MOAF Investment in Major Projects (includingagencies under the MOAF)


13233308

(183)


103

(D) MOAF

The MOAF invested a total of 76.2 billion won in the following: the project to further policies

based on the practical application and industrialization of agricultural BT R&D outcomes

(development of high added-value knowledge-based BT including high-quality functional

products, and the utilization and industrialization of research results through technology transfer

and activation of the related markets); the project to utilize transgenic livestock and develop

technologies for producing bio novel drugs and organs (utilize transgenic livestock, develop

technologies for producing and industrializing high added-value bio novel drugs, and develop

and industrialize human-transplantable transgenic aseptic cloned pigs); and the project to

organize infrastructure and create environments aimed at activating agricultural bio-industries

(develop technologies for assessing GMO safety and qualitative and quantitative analysis, and

strengthen measures to manage information on BT and agricultural gene resources, and

support that work) <Table 2-2-1-8>.

104

2. Current Status of Human Resources MOE & HRD, Korean EducationalDevelopment Institute, Educational Statistics Annals

2. Current Status of Human Resources MOE & HRD,Korean Educational Development Institute, EducationalStatistics Annals

A. Current Status of BT Human Resources Park Jae-min, Status and Prospects of Mid- andLong-term BT Manpower Demand and Supply, Mid- and Long-term Human ResourcesDemand and Supply, MOE & HRD, Korea Research Institute for Vocational Education &Training, 2005 (planned).

1) Current Status of Bio-industry Human Resources

According to a 2004 survey released by the Bio-industry Association of Korea, Korea’s totalbio-industry human resources drawn from university graduates or higher stood 7,051 in 2003.The bio-industry is a cutting-edge technology-based knowledge-intensive industry; as such, itwas found that most corporations channel investment into R&D, and that the greater part ofhuman resources was engaged in research. As shown in <Table 3-2-2-1>, of the 7,051personnel, 5,248 (or 74.4%) were researchers.

In terms of educational status, Ph.D. holders account for 14.7%, while M.S. degree holdersand B.S. degree holders each account for a little more than 40% of personnel; thus, the holdersof M.S. degrees or higher represent 57.5% of the total personnel, making for a highly educatedhuman resources pool. The survey also found that post-graduate personnel were more likely tobe engaged in research work, with 97% of the Ph.D. holders and 88% of the M.S. degreeholders conducting research, while B.S. degree personnel were engaged in both research andproduction in equal measures. However, despite the existence of a bio-industry work forcecomposed of highly educated researchers, the ratio is declining every year.

MOE & HRD, Korean Educational Development Institute, Educational Statistics AnnalsPark Jae-min, Status and Prospects of Mid- and Long-term BT Manpower Demand and Supply, Mid- and Long-termHuman Resources Demand and Supply, MOE & HRD, Korea Research Institute for Vocational Education & Training,2005 (planned).

Description

<Table 2-2-2-1> Bio-industry Human Resources (2003)

Ph.D M.S. B.S. Total

Researchmanpower

Productionmanpower

Total 1,036 (14.7) 3,017 (42.8) 2,998 (42.5) 7,051 (100)

(Unit: no. of persons, %)

Note 1: Research personnel consist of BT researchers and research administrative personnel with a major in BT. Note 2: Production personnel consist of personnel engaged in bio-industries with the exception of research

agencies.Source: Bio-industry Association of Korea, 2004

35 ( 1.9) 363 (20.1) 1,405 (77.9) 1,803 (100)

1,001 (19.1) 2,654 (50.6) 1,593 (30.4) 5,248 (100)


105

Description

<Table 2-2-2-2> Employment Increase in Bio-industry by Education Level (1997 ~ 2003)

Ph.D M.S. B.S. Total

Researchmanpower

Productionmanpower

Total 22.1 19.3 27.5 22.8

(Unit: %/year)

Source: Bio-industry Association of Korea

2) Employment Trends in the Bio-industries

According to a survey on bio-industry human resources for 1997 ~ 2003 released by the Bio-industry Association of Korea, the work force during this period increased by an average of22.8% annually, as the bio-industry grew rapidly. During this period, R&D costs increased from126.3 billion won to 341.9 billion won, and facility investment costs surged from 60 billion won to133 billion won, reflecting such rapid growth.

Regarding the increase in manpower, production personnel increased more rapidly thanresearch personnel. Also, during this period, the number of B.S. degree holders rose by 27.5%more than the numbers of M.S. degree and Ph.D. holders. This contrasts with the white paperPark Jae-min, Status and Prospects of BT Manpower, -2003 BT White Paper-, MOST, 2003.for 2003, when the number of Ph.D. holders increased more rapidly, and reflects the rise inproduction manpower since 2000. At the same time, <Table 2-2-2-2> shows that there was astrong demand for manpower among the state-of-the-art technologies.

B. Demand and Supply Prospect of BT Human Resources

1) Demand Prospects for Bio-industry Human Resources

The entirety of bio-industry human resources was estimated based on employment increaserates in the bio-industries by education level and job, and new manpower demands wereforecast through to 2015. In particular, the demand prospects for BT human resources werebased on BAK’s surveys on BT-engaged corporations so as to avoid obtaining an exaggerated

Park Jae-min, Status and Prospects of BT Manpower, 2003 BT White Paper, MOST, 2003.

27.9 21.8 32.6 29.7

21.9 19.0 23.9 20.9

106


evaluation of demand based on the existing industry categorization criteria-defined BT.

With this trend, the demand for BT human resources is estimated to rise to about fromapproximately 10,000 in 2003 to 31,000 by 2010, and should top about 92,000 by 2015 <Table2-2-2-3>. As such, with the forecast for employment in the bio-industries predicting that it willtriple every five years, the new demand should see the number of Ph.D. holders rise from about300 in 2005 to 757 by 2010 and 2,015 by 2015, with the number of M.S. holders rising from 697to 1,687 by 2010 and 4,084 by 2015, and that of B.S. holders rising from 1,050 to 3,532 by2010 and 11,883 by 2015.

<Table 2-2-2-3> Perspectives on the need for BT human resources by technologylevel

(Unit: number of people)

Year

2005

’06-’08

’09-’11

’12-’15

Total

Total numberof employees Subtotal

2,025

9,490

18,219

53,274

83,008

Ph.D.

279

1,265

2,301

6,240

6,240

M.S.

697

3,008

5,113

12,777

21,595

B.S.

1,050

5,217

10,804

34,258

51,328

10,712

49,760

94,408

272,307

427,188

New requirements

2) Supply Trends and Prospects for BT Human Resources

To acquire expertise in the BT field, prospective students should major in the related academicfields, or be trained in the related fields. In particular, to apply state-of-the-art BT to theproduction processes and R&D activities, it will be necessary to study to the B.S., M.S., andeven Ph.D. level.

This section, in reply to the question, “Is the supply of manpower sufficient to meet futuredemand-”analyzes the supply structure for science and technology human resources in the BTfield. First, the average annual supply rate for BT manpower is shown in <Table 2-2-2-4>.Likewise, in 1999 ~ 2004, the number of BT-related graduates was similar every year. However,by education level, the number of Ph.D. holders increases by an average 7.9% annually, whilethe number of M.S. degree holders is rising by 2.4%, and that of B.S. holders declining by 0.7%.

Given this trend and the prospects for the academic environment, the supply prospects for BT


107

manpower for 2005 ~ 2015 by education level is shown in <Table 2-2-2-5>. Likewise, thenumbers of B.S. degree holders and higher-educated personnel are estimated to rise from9,353 in 2005 to an average rise of 9,290 from 2006-08, and an average of 8,672 and 7,062 in2009-11 and 2012-15 respectively. By education level, the number of Ph.D. holders isestimated to rise from 461 in 2005 to an average yearly increase of 503 for 2012-15, while M.S.holders will rise from 1,857 in 2005 to an average yearly increase of 1,981 from 2012-15.However, the number of B.S. holders looks likely to decline from 7,000 in 2005.

Total

<Table 2-2-2-4> Supply Increase Rate of BT Human Resources by EducationLevel (1999 ~ 2004)

0.1

Ph.D.

7.9

M.S.

2.4

B.S.

-0.7

(Unit: %/year)

Year

<Table 2-2-2-5> Supply and Demand Prospects for BT Human Resources byEducation Level

Subtotal Ph.D. M.S. B.S.

B.S.

2005

‘06-‘08

‘09-‘11

‘12-‘15

Total

9,353

27,869

26,016

28,248

91,486

461

1,412

1,457

2,014

5,343

1,760

5,438

5,673

7,924

20,794

7,133

21,019

18,886

18,311

65,349

(Unit: number of people)

Source: MOE & HRD, KEDI

Forecasts are based on Educational Statistical DB, and KRIVET’s survey of the status of itsgraduates.

3) Analysis of the Demand-Supply Difference

The analysis of the difference between the estimated demand and supply is shown in <Table2-2-2-6>. In the ten year period from 2006 to 2015, the supply of Ph.D. and M.S. holders will belacking, while the supply of B.S. holders will be excessive. The demand for Ph.D holders

108


exceeds their supply, and the demand for and supply of M.S. holders are similar, while thedemand for B.S. holders is only 80% of the supply. However, during this period, the demand forpersonnel of all educational levels will rise faster than the supply, and thus the BT manpowersupply situation will switch from an excess to a shortfall and, by 2015, the overall supply will belower than the demand.

Year

<Table 2-2-2-6> Demand-Supply Ratios in BT Human Resources by TechnologicalLevel

subtotal Ph.D. M.S. B.S.

2005

’06-’08

’09-’11

’12-’15

Total

21.7

34.1

70.0

188.6

90.7

60.6

89.6

157.9

309.9

188.7

39.6

55.3

90.1

161.3

103.9

14.7

24.8

57.2

187.1

78.5

(Unit: %)


109


A. Outline of Patents

Patents have great significance in the BT field. BT requires huge levels of R&D investmentand time, and certain products and technologies take a long time to obtain legal approval beforeentering the market. As such, crucial to BT is the acquisition of patents, a legal mechanism thatensures a return on investments.

To formulate R&D policies in the BT field, it is imperative to analyze the related patents. Patentinformation is closely related to R&D, providing ample, objective information and easy access todata. Thus, the information can be utilized to measure R&D achievements and establishnational policies for science and technology.

B. Criteria for Analysis

Technologies in the BT field are categorized by referring to the OECD-defined BT based onpatent categorization and the criteria “Trends of BT Patents”KIPO, Korea Institute of PatentInformation 2004.

of the Korean Intellectual Property Office for categorizing 13 technologies in six industries.

Source : Park Jae-min, Status and Prospects of BT Manpower, 2003 BT White Paper, MOST, 2003.

<Figure 2-2-3-1> Categorization of Technologies in BT

D. Trend in the Number of BT-related Patents Registered in theUnited States

Surveys of the number of BT-related patents registered in the United States found that Korea

ranked 15th with 378 cases in terms of the number of patents registered over the past ten

years, submitting the second highest number of applications among Asian nations after Japan.

The analysis targeted the United States, which vigorously protects its patents and has a largemarket to identify trends in Korea and the global community. Patent applications andregistrations for the period 1995 ~ 2004 were surveyed.

C. Trend in the Number of BT-related Patent Applications andRegistrations in Korea

An analysis of BT-related patent applications revealed that they have risen rapidly since 1999.


110

<Table 2-2-3-1> Number of BT-related Patent Applications by Year in Korea

Korean

Foreigner

1995

546

633

1996

618

719

1997

670

918

1998

785

761

1999

856

799

2000

1,311

1,025

2001

1,577

1,102

2002

1,689

956

2003

1,798

1,001

2004

1,756

1,172

Total

11,606

9,086

<Table 2-2-3-2> Number of BT-related Patent Applications in Korea by Nationand Year

U.S.A.

Japan

Germany

U.K.

Switzerland

France

1995

245

127

58

22

24

22

1996

326

129

74

29

29

29

1997

380

156

87

50

33

43

1998

282

159

91

31

44

34

1999

337

154

73

34

28

29

2000

402

171

125

50

41

38

2001

423

247

114

51

25

33

2002

362

245

92

37

24

32

2003

328

231

115

43

45

31

2004

458

238

99

47

52

36

Total

3,543

1,857

928

394

345

327

Of the foreign patents applied for in Korea, the United States submitted the greatest numberwith 3,543 applications, followed by Japan with 1,857, and Germany with 928.


111

<Table 2-2-3-3> Number of BT-related Patents Registered in the U.S. by Nationand Year

U.S.A.

Japan

Germany

U.K.

TheNetherlands

France

Canada

Denmark

Switzerland

Australia

Israel

Sweden

Belgium

Korea

India

Taiwan

China

Total

1995

1,958

342

145

82

71

72

23

46

31

34

27

14

11

2

6

3

3,019

1996

2,744

398

195

125

117

104

50

52

40

37

31

15

18

4

5

2

4,154

1997

4,008

396

253

169

158

140

64

52

49

21

33

20

11

9

13

4

5,658

1998

5,623

606

311

249

220

205

116

78

82

64

70

49

29

12

13

7

8,125

1999

5,479

517

337

288

219

258

104

79

94

67

59

52

53

13

18

4

8,041

2000

4,831

468

287

240

194

233

113

76

59

47

56

57

33

12

14

7

7,086

2001

5,356

525

347

254

226

233

132

110

123

67

61

47

63

28

35

9

7,945

2002

5,148

439

377

227

203

249

144

141

109

71

63

55

56

56

31

15

7,883

2003

4,425

436

468

208

209

208

117

90

80

77

68

86

52

55

22

10

7,030

2004

4,199

415

372

176

152

181

131

79

75

52

55

78

52

47

25

18

6,575

Total

43,771

4,542

3,092

2,018

1,769

1,883

994

803

742

537

523

473

378

238

182

79

65,516

Rank-ing

1

2

3

4

6

7

8

9

10

11

12

13

15

17

19

25

-

78 88 122 182 189 188 144 299 232 279 1,801 5


112

<Table 2-2-3-4> Technological Level by Nation Based on Patents Registered in theU.S.

Nation

95 ~ 99 00 ~ 04 95 ~ 99 00 ~ 04 95 ~ 99 Ranking 00 ~ 04 Ranking

19,812

2,259

1,241

913

785

779

122

40

55

20

28997

23,959

2,283

1,851

1,105

984

1,104

256

198

127

59

36519

1.14

0.52

0.60

0.86

0.55

0.91

0.36

0.69

0.41

0.81

1

1.18

0.53

0.61

0.95

0.62

0.97

0.43

0.22

0.66

0.89

1

22,586

1,175

745

785

432

709

44

27

23

16

28997

1

2

4

3

7

5

20

21

22

25

28,272

1,210

1129

1050

610

1071

110

44

84

53

36519

1

2

3

5

6

4

14

21

18

20

No. of patents Patent impact index Technology strength

U.S.A.

Japan

Germany

U.K.

TheNetherlands

France

Canada

Korea

Taiwan

India

China

Total

In terms of patent registration by field and year, vigorous patent registration efforts were made

in the areas of bio drugs, genomes, measurement and diagnosis, and transgenic animal and

plant development technologies.

E. Technological Level by Nation of BT-related Patents Registered

in the U.S.

The BT-related technological levels were analyzed by nation using the number of patents and

the patent impact index.

As a result, Korea saw its technological ranking rise from 20th place in the period 1995 ~ 1999

to 14th place in 2000 ~ 2004. However, its technological level has yet to be boosted both

quantitatively and qualitatively when compared with nations in the upper level.

659 1,142 0.70 0.43 461 6 491 7

F. BT-related Patent Strategies by Nation Based on PatentsRegistered in the U.S.

The patent strategies were analyzed by technological field and by nation according to thecomparative intensity index and activity index. With the exception of the Netherlands, the majoradvanced nations had a high AI in the basic sciences, medicine, and process areas. Korea hadan AI of over 2 - twice the average figure - in the areas of biological resources exploration,biological pesticides, and environmental BT.


113

<Figure 2-2-3-2> Trend in the Number of Patents Submitted by DetailedTechnology Area and by Year

Proteom

es technology

Cuturing of anim

al and plant cells technology

Developm

ent of femented foods technology

Bioprocesses technology

Developm

ent of bio-pesticides technology

Developm

ent of bio medicines technology

Biological resoutce exploration technology

Genom

es technology

Measurem

ent and diahnosis technology

Developm

ent of transgenic animals and

plants technology

Use of antibodies technology

Environm

ental BT

technology

Enzym

e engineering technology

114


Appliedindustry

<Table 2-2-3-5> Activity Index by Nation and Technology

Basicscience

Medicine

Food

Detailedtechnology U.S.A Japan Germany U.K. The

Netherlands France Canada Korea

※ Analysis criteria: Targeting patents registered in the U.S. over the last five years (2000-2004), the activity index is

based on the following criteria: ∇(0<AI<1), ◎(1≤AI<2), ⊙(2≤AI)

With regard to the major nations, the review of their BT-related technology cycle time (TCT)

and non-patent reference (NPR) found that in recent years they have accelerated R&D in the

field of basic sciences. Furthermore, the TCT is gradually shortening, with the exception of

Japan.

Biological resourcesexploration

Culturing of animaland plant cells

Enzyme engineering

Genome

Proteome

Use of antibodies

Bioprocess

Measurement anddiagnosis

Development of bioedicines

Biopesticides

Transgenic animalsand plants

Fermented foods

Environmental BTEnviron-ment

Process

Agriculture

G. Front runners in the BT Field Based on Patents Registered inthe U.S.

As advanced industrial nations have been focusing R&D on the basic sciences, an analysis of

the front runners in the basic science area by technology over the last five years (2000 ~ 2004)

was conducted. The front runner in the recent controversy surrounding the stem cell technology

of animal and plant cell culture was the University of California (with 38 cases), while Isis

Pharmaceuticals registered the largest number of patents in the area of genome technology

with 256 patents.


115

<Figure 2-2-3-3> Trends in Research Direction (NPR) and TCT by Nation

116


Detailed technology

<Table 2-2-3-6> Frontrunners in the Basic Bio-industry R&D Based on PatentsRegistered in the U.S.

Applicant

2000-2004 (the last 5 years)

Nation No. of cases

Biologicalresourcesexploration

Genome

Proteomes

Use of antibodies

U.S.A.

U.S.A.

U.S.A.

U.S.A.

U.S.A.

U.S.A.

U.S.A.

U.S.A.

Denmark

U.S.A.

U.S.A.

U.S.A.

U.S.A.

U.S.A.

U.S.A.

U.S.A.

U.S.A.

U.S.A.

4

14

13

38

37

15

78

78

70

256

118

115

61

60

52

26

24

18

US Dept of Agriculture

Lexicon Genetics

E I DuPont de Nemours & Co

University of California

Pioneer Hi-Bred Int'l

University of Michigan

Smithkline Beecham

Applera

Novozymes A/S

Isis Pharmaceuticals

Smithkline Beecham

University of California

Smithkline Beecham

Genentech

Human Genome Sciences

Genentech

Human Genome Sciences

Johns Hopkins University

H. Status of U.S. Federal Government-supported Patents

The following shows the survey results on the status of patents (Interest: GI) created throughU.S. federal government-supported R&D.

In terms of the ratios of patents created through R&D support by department, in 2000 ~ 2004HHS accounted for 50% of the total of such patents. By research entity, universities representedabout 65% of the total researching agencies, indicating that in the case of the United States, thefederal government has focused its support on the BT research being conducted in universities.

Animal and plant cellculture

Enzyme engineering

Private

Corporation

Public agency

University

Sub-total

Private

Corporation

Public agency

University

Sub-total

Private

Corporation

Public agency

University

Sub-total

Private

Corporation

Public agency

University

Sub-total

Private

Corporation

Public agency

University

Sub-total

Total


117

GI (Government Interest): is a system provided under the U.S. laws under which research agencies receiving partial or whole financialsupport from the U.S. federal government are granted rights over related patents, but must report information on inventions and patentsto the related government agencies, and write in the patent claim specifications whether they received government support. Aimed atprompting the commercialization of inventions, it requires compliance with the requirements for reporting inventions, but grants rightsover patents to contracted agencies (universities or corporations).

<Table 2-2-3-7> No. and Ratio of Patents by Ministry and Research Entity

Department

HHS

Department of Energy

National

Science Foundation

Department ofAgriculture

Other departments

Research entityNo. of patents

1995~1999 2000~2004

72

934

11

1,558

2,575

12

72

4

108

196

8

24

0

110

142

0

18

2

86

106

19

206

40

191

456

3,475

Ratio

2.8%

36.3%

0.4%

60.5%

100%

6.1%

36.7%

2.0%

55.1%

100%

5.6%

16.9%

0.0%

77.5%

100%

0.0%

17.0%

1.9%

81.1%

100%

4.2%

45.2%

8.8%

41.9%

100%

-

No. of patents

85

941

33

2,061

3,120

5

74

2

140

221

6

17

2

173

198

6

20

5

126

157

22

218

38

209

487

4,183

%

2.7%

30.2%

1.1%

66.1%

100%

2.3%

33.5%

0.9%

63.3%

100%

3.0%

8.6%

1.0%

87.4%

100%

3.8%

12.7%

3.2%

80.3%

100%

4.5%

44.8%

7.8%

42.9%

100%

-

With regard to detailed technology, the survey found that solid investment was made in thefields of basic sciences and processes, and the medicines industry. In particular, the highestnumber of patents was created in areas of measurement and diagnosis, bio drugs, andgenomes.


118

Detailed technology

<Table 2-2-3-8> No. and Ratio of Patents with the U.S. Government by Technology Field

1995 ~ 1999

922(26.5%)

671(19.3%)

659(19.0%)

313(9.0%)

258(7.4%)

203(5.8%)

125(3.6%)

135(3.9%)

82(2.4%)

57(1.6%)

34(1.0%)

14(0.4%)

2(0.1%)

3,475

2000 ~ 2004

1,161(27.8%)

905(21.6%)

734(17.5%)

300(7.2%)

296(7.1%)

202(4.8%)

203(4.9%)

95(2.3%)

85(2.0%)

110(2.6%)

74(1.8%)

13(0.3%)

5(0.1%)

4,183

Total

2,083(27.2%)

1,576(20.6%)

1,393(18.2%)

613(8.0%)

554(7.2%)

405(5.3%)

328(4.3%)

230(3.0%)

167(2.2%)

167(2.2%)

108(1.4%)

27(0.4%)

7(0.1%)

7,658

Measurement anddiagnosis

Development of bio medicines

Genomes

Proteomes

Bioprocesses

Culturing of animal andplant cells

Enzyme engineering

Biological resources exploration

Use of antibodies

Development of transgenic animals and

plants

Development of bio-pesticides

Environmental BT

Development of fermented foods

Total


A. Introduction to publication

The purpose of R&D has two sides: one concerns cause and effect relations and the search

for the laws of natural phenomena; the other involves the establishment of technology and the

application of these phenomena (laws) to human society.

The result of the former is evinced largely in the form of publication, while the experience or

knowledge gained during the activity of the latter are shown in the form of publication. R&D

outcomes reported in publications become the common intellectual property of mankind. Thus,

it can be considered that the index of publications shows the level of R&D results and its

contribution to mankind’s knowledge of science and technology.

In establishing an index for science and technology publications, a literature database is used

to distinguish between the enormous volume of publications. In many cases the Science

Citation Index (SCI) Database is used internationally. It is considered to be the most highly

developed database owing to its broad coverage of science and technology, providing

reference information on publications and applying strict selection standards to the articles

seeking inclusion. The current status of publications was calculated on the basis of the National

Science Indicators (NSI, 1981 ~ 2004) of the Institute for Scientific Information (ISI).

B. Number of publications

In 2004 the number of SCI publications throughout the world stood at 787,677, with Korea

ranked 14th in the world with 19,279 (2.45%) publications.


119

<Table 2-2-4-1> Trends in the number of publications in Korea during the last 5 years

Year

No. of publications

World's total no. ofpublications

Percentage share of theworld’s publications (%)

World ranking

2000 2001

14,889

15

2002

15,862

14

2003

18,787

14

2004

19,279

14

12,471

16

738,617 756,322 752,287 813,832 787,677

1.69 1.97 2.11 2.31 2.45

120


C. Impact factors on publication

Of the 81,288 publications reported in Korea over a five-year period (2000 ~ 2004), the

number of publications cited more than once stood at 44,008, with an impact factor of 54.14%.

The total number cited over 5 years stood at 227,397, and the average number of citations per

publication was 2.80, ranking Korea 29th among the countries with more than 5,000

publications. This is only 64.67% of the world's average (4.33), and 47.95% of the average

(5.84) for the top 10 countries in terms of their impact factor, but this has increased as the

number of citations has risen over the years.

The average number of citations per publication by 5-year periods in Korea was low, but has

increased faster than the world average, showing that the quality of publications has also

improved.

Ranking

<Table 2-2-4-2> Lists of countries with a high average number of citations duringthe 5 years from 2000 ~ 2004

Country Average no. ofcitations No. of citations No. of publications

1

2

3

4

5

6

7

8

9

10

Switzerland

U.S.A.

The Netherlands

Denmark

Sweden

U.K.

Finland

Germany

Belgium

Canada

6.89

6.17

6.06

5.90

5.61

5.51

5.40

5.22

5.10

5.08

5.84

4.33

2.80

488,805

8,050,224

239,991

580,493

427,060

1,935,883

202,753

1,726,207

889,626

269,684

14,810,726

16,673,672

227,397

70,911

1,304,533

39,631

98,347

76,151

351,230

37,548

330,496

174,357

53,101

2,536,305

3,848,735

81,288

Average of the10 countries

World total

Korea

*Data was collected from countries with more than 5,000 publications.


121

<Table 2-2-4-3> Current status of the average number of citations in 5-yearperiods

Country

Korea

World average

’96 ~ ’00 ’97 ~ ’01

2.18

4.03

’98 ~ ’02

2.39

4.12

’99 ~ ’03

2.63

4.27

’00 ~ ’04

2.80

4.33

2.00

3.90

(Unit: number of citations)

D. The number of publications in the field of BT

Among the 18 areas of SCI science and technology sub-classification, the number of BT

areas reported by Korea stood at 6 between 2000 and 2004, and the current status of

publications is as follows:

<Table 2-2-4-4> Percentage share in publications in BT area by country duringthe 5-year period 2000 ~2004

Area No. ofpublications

Percentageshare in Korea

6.45%

0.92%

2.26%

1.45%

2.21%

3.17%

Total no. ofdomestic

publications

81,288

81,288

81,288

81,288

81,288

81,288

Percentage sharein the world

1.85%

1.19%

2.19%

1.07%

1.23%

3.16%

Total no. ofworld's

ublications

282,906

62,518

83,892

110,104

146,496

81,615

5,241

746

1,838

1,177

1,795

2,579

(Unit: number of publications, %)

Biology & Biochemistry

Immunology

Molecular biology &Genetics

Neuroscience & Behavioral

science

Pharmacology

The number of BT publications over the 5-year period revealed that the U.S.A.. was the mostproductive in all 6 areas, followed by Japan, the UK, Germany, and France. China and Koreahad a similar number of publications (biology and biochemistry: 6,514; immunology: 660;microbiology: 1,777; molecular biology and genetics: 2,027; neuroscience and behavioralscience: 1,974; pharmacology: 3,031)

122


Area

<Table 2-2-4-5> Current of No. of publications tn the BT area by country duringthe recent 5-year period


Immunology

Microbiology

Molecular biology andGenetics

Neuroscience &behavioral science

Pharmacology

Description

No. of publications

No. of citations

Average per publication

No. of publications

No. of citations


No. of publications

No. of citations


No. of publications

No. of citations


No. of publications

No. of citations


No. of publications

No. of citations


2000

878

8,195

(9.33)

126

1,229

(9.75)

306

2,173

(7.1)

121

1,615

(13.35)

280

2,889

(10.32)

387

2,594

(6.7)

2001

914

6,526

(7.14)

152

1,106

(7.28)

311

1,620

(5.21)

113

1,271

(11.25)

305

2,351

(7.71)

386

2,019

(5.23)

2002

1,052

5,416

(5.15)

123

561

(4.56)

370

1,520

(4.11)

111

753

(6.78)

335

1,587

(4.74)

492

1,600

(3.25)

2003

1,177

2,588

(2.2)

150

376

(2.51)

458

709

(1.55)

149

460

(3.09)

434

948

(2.18)

636

775

(1.22)

2004

1,220

400

(0.33)

195

79

(0.41)

393

97

(0.25)

152

79

(0.52)

441

117

(0.27)

678

106

(0.16

00-04

5,241

23,125

(4.41)

746

3,351

(4.49)

1,838

6,119

(3.33)

646

4,178

(6.47)

1,795

7,892

(4.4)

2,579

7,094

(2.75)

<Figure 2-2-4-1> Current status of No. of publications in the BT area by countryduring the recent 5- year period

U.S.A Japan UK Germany France China Korea

Biology and biochemistry

Immunology

Molecular biology and genetics

Neuroscience and behavioral science

Pharmacology


123

In 1984, Korea published only 62 SCI papers in the six BT categories combined. However, in1994, it published 238 papers in biology and biochemistry (9.9 times the previous figure), 21papers in immunology (21 times), 108 papers in microbiology (7.7 times), 26 papers inmolecular biology and genetics (13 times), 52 papers in neuroscience and behavioral science(26 times), and 117 papers in pharmacology (5.6 times). Afterwards, the publication of papers inBT surged. For example, in 2004 Korea published 1,220 papers in biology and biochemistry(1.5 times), 195 papers in immunology (9.3 times), 393 papers in microbiology (3.6 times), 152papers in molecular biology and genetics (5.8 times), 441 papers in neuroscience andbehavioral science (8.5 times), and 678 papers in pharmacology (5.8 times) compared with tenyears ago.

<Figure 2-2-4-2> Trends in publications in the BT area by year


Microbiology


Immunology

Molecular biology and Genetics

Pharmacology

E. Impact factor in the BT area

In the last five years, of the 5,241 papers published in biology & biochemistry, the number ofpapers quoted once or more stood at 3,462, establishing a rate of paper citation of 66.06%,1.22 times the average domestic paper citation rate of 54.14%. Furthermore, immunology had acitation rate of 61.39% (1.13 times), molecular biology and genetics 68.14% (1.26 times), andbioscience and behavioral science 59.16% (1.09 times). Thus, the citation rates for Koreanpapers in immunology, microbiology, neuroscience and behavioral science, and pharmacologywere higher than the world’s average.

124


<Table 2-2-4-6> Ratio of impact factor in the BT area in the last five years

Area Impact factorratio

Number ofpublications cited

3,462

458

860

802

1,062

1,394

Number ofpublications

5,241

746

1,838

1,177

1,795

2,579

Ratio to theworld's level

0.93

1.04

1.04

0.96

1.05

1.00

World's averageimpact factor

71.25

59.14

45.12

71.24

56.17

54.02

66.06

61.39

46.79

68.14

59.16

54.05


Immunology

Microbiology

Molecular biology & Genetics

Neuroscience & behavioralscience

Pharmacology

In the last five years, Korea’s impact factor in terms of the number of BT papers published isshown in <Table 2-2-4-7>, and compared to the domestic average index (2.80), it is high in fiveof the six fields (except pharmacology) including a 2.5 ratio in molecular biology and genetics.However, the index in the same fields is very low compared to the world’s average.

<Table 2-2-4-7> Current status of the impact factor in the BT area in the last fiveyears

Area Average (I.F.) Number ofcitations

23,125

3,351

6,119

8,394

7,892

7,094

Number ofpublications

5,241

746

1,838

1,177

1,795

2,579

Ratio to theworld's level

0.60

0.43

0.50

0.56

0.57

0.58

World's average(I.F.)

7.39

10.34

6.60

12.64

7.75

4.76

4.41

4.49

3.33

7.13

4.40

2.75


Immunology

Microbiology



Pharmacology


125

The average number of citations in the BT field for each five-year period shows a rapid growthin biology and biochemistry, molecular biology and genetics, neuroscience and behavioralscience, and pharmacology.

<Figure 2-2-4-3> The number of citations per BT paper for Korea and the worldfor the last five years (2004 ~2005).

* The number of citations in parentheses ( ) indicates the average impact factor in the world.

Biology & Biochemistry 4.41(7.39)

Immunology

4.49 (10.34)

Pharmacology

2.75 (4.76)

Microbiology

3.33 (6.6)


7.13 (12.64)


4.4 (7.75)

Average in Korea(IF)

Averageworldwide(IF)

<Table 2-2-4-8> Status of the Average Number of Citations in the BT Field foreach Five-year Period

Area ’ 96~ ’ 00 ’ 97 ~ ’ 01

3.41

4.07

3.84

2.08

’ 98 ~ ’ 02

3.85

4.67

2.97

2.35

’ 99 ~ ’ 03

4.16

5.27

3.17

2.52

’ 00 ~ ’ 04

4.41

4.49

3.33

2.75

3.03

3.44

3.78

1.79


Immunology

Microbiology



Pharmacology

(Unit: number of citations)

4.12 5.25 5.92 6.53 7.13

3.80 4.17 4.26 4.37 4.40

126


<Figure 2-2-4-4> Number of Average Paper Citations in the BT Field for eachFive-year Period


Microbiology


Immunology


Pharmacology

3. Current Status of Biotechnology-

Related Laws and Regulations

127

Trends in Bio-safety Section 1

1. Introduction2. Issues Surrounding the Protocol 3. Domestic Trends

Trends in Bioethics-related Legislation Section 21. Outline2. Regulations on Somatic Cell Cloning3. Prospects and Tasks

Trends in the BT Intellectual Property SystemSection 3

1. Outline2. Status of BT-related Patent Applications3. Expansion of Review Infrastructure in BT4. Operation of the Microbe Deposition System

BT Companies and Their Support SystemSection 5

1. Worldwide Trends2. Overseas Situation3. Domestic Trends 4. Development Challenges

Current Status and Suggestions for BT ProductsApproval Procedures

Section 4

1. Introduction2. Characteristics of, Approval and Permission Procedures for Bio

Drugs3. Domestic and Overseas Bio Drug Development Trends4. Influences of Biotechnology on the Pharmaceutical Industry 5. Promotion of Safety Management for BT Products by KFDA 6. Present Tasks for the Industrialization of BT Products7. Suggestions for Future Development

1. Introduction

129

Section 1

Trends in Bio-safety

1. Introduction

A. Definition and Scope

The products of modern biotechnologies - living modified organisms (LMOs) - offer

humanitymany potential benefits from the economic, technical, and scientific perspectives.

However, in another respect, these LMOs may pose certain risks that could adversely affect

human beings and ecosystems, and the concurrent controversies are set to continue. In

particular, as LMOs are being utilized by international industries and are thus being transferred

from nation to nation, the need has arisen to establish international regulations that will prevent

the corresponding potential impact and ensure human safety. Thus, signatories to the

Convention on Biological Diversity (CBD) of 1995, in response to these international

requirements, prompted the drafting of the Cartagena Protocol on Bio-safety (hereonreferred to

as ‘the protocol’) to deal with the potential risk posed by LMOs. The protocol took effect on

September 11, 2003, with the focus placed firmly on the trans-boundary movement of LMOs,

and, as of 2005, 126 nations had signed the protocol.

Regarding the signing of the protocol, it is noteworthy that of the 17 nations known to be

raising LMOs, eleven (China, Spain, Germany, Romania, Mexico, Honduras, Colombia,

Paraguay, Brazil, India, and South Africa) signed it, while six nations accounting for the greater

part of the cultivation areas (the United States, Canada, Argentina, Australia, Uruguay, and the

Philippines) did not sign it <Table 3-1-1-1>. These nations did not sign the protocol presumably

because they were concerned about the effect it would have on their LMO exports if they sign it.

However, the 4th-largest LMO-raising nation China signed the protocol before the COP/MOP-2

in February 2005, thereby giving greater resonance to the protocol.

130

1. Introduction

Korea signed the protocol in September2000. In orderto respond to the demands of civicgroups and other organizations to secure bio-safety and lay the groundwork for theimplementation of the protocol, the law on the trans-boundary movement of LMOs and otherrelated issues was enacted and promulgated in March 2001 under the impetus of MOCIE.Thereafter, each ministry made efforts to enact the sub-laws and regulations necessary forimplementing this law enforcement ordinances to this law were enacted as recently asSeptember 20, 2005.

Thus, this section will review the agenda raised at the two conferences of the parties attendingthe convention and the meetings of the parties involved in the protocol (COP/MOP) followingthe enforcement of the protocol on September 11, 2003, as well as take a look at the effortsKorea is making to implement the protocol and secure bio-safety.

Region

<Table 3-1-1-1> Signatory Status of the Cartagena Protocol on Bio-safety 126 members as of the end of October 2005

Africa

Central andEasternEurope

Central and SouthAmerica, Caribbean

Area

50 nations signed theprotocol initially

(October 5, 2000 - June 13, 2003)

Bochwana, Cameroon,Djibouti, Ghana, Kenya,Lesotho, Liberia, Mali,

Mauritius, Mozambique,Tanzania, Tunisia,

Uganda(13)

Belarus, Bulgaria, Croatia,Czech, Moldova, Slovenia,

Ukraine(7)

Barbados, Bolivia, Colombia,Cuba, Ecuador, Mexico,

Nicaragua, Panama, SaintKitts and Nevis, Trinidad and

Tobago, Venezuela(11)

Austria, Denmark, France,Luxembourg, Norway, Spain,

Sweden, Switzerland, theNetherlands(9)

Nations which signed the protocol after ittook effect

( - October 2005)

Nigeria, Burkina Faso, Republic of SouthAfrica,Senegal, Ethiopia, Madagascar,

Egypt, Zambia, Seychelles, the Gambia,Togo, Rwanda, Algeria, Niger, Namibia,

Zimbabwe, Benin, Eritrea, Congo, Sudan,Libya, Mauritania

Mongol, North Korea, Malaysia,Cambodia, Tonga, Jordan, Iran, Japan,

Cyprus, Vietnam, Bangladesh, Tajikistan,Syria, Kiribati, Sri Lanka,

Solomon Islands, Laos, Indonesia,China, Kyrgyzstan, Papua New Guinea

Romania, Lithuania, Slovakia, Poland,Hungary, Latvia, Estonia, Armenia,

Albania, Azerbaijan, Jugoslavija

Saint Vincent, Antigua and Barbuda, ElSalvador, Brazil, The Bahamas, Grenada,

Belize, Paraguay, Peru, DominicanRepublic, Guatemala, Saint Lucia

Turkey, Ireland, U.K., Germany, Italia,Belgium, Greece, Finland, Portugal, New

Zealand

Total

19

Source: the homepage of the bio-safety protocol(www.biodiv.org/biosafety/).

Western Europe and Others

Bhutan, Fiji,India, Maldives, the MarshallIslands, Nauru, Niue, Oman,

Palau, Samoa(10)Asia-Pacific

35

31

18

23


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A. Agenda in COP/MOP-1

The 1stConference of the Parties to the Convention/meeting of the parties to the Protocol

(COP/MOP-1) was held on February 23-27, 2004, five months after the enforcement of the

protocol, in Kuala Lumpur, Malaysia. The COP/MOP-1, organized by the CBD Secretariat, was

attended by some 2,000 delegated from signatories and non-signatories to the protocol, UN-

related organizations, inter-governmental organizations, and non-governmental organizations.

The conference dealt with such major issues as the procedures and mechanisms designed to

facilitate importing nations’import decisions, information-sharing and the Bio-safety Clearing

House (BCH), the enhancement of capacity, the handling, transportation, packaging, and

identification of LMOs, the procedures and mechanisms for observing duties, liability and

compensation of damages, monitoring and reporting, and financial systems.

The MOP/COP-1 conducted a heated discussion on LMOs intended for direct use as food or

feed, or processing (LMOs-FFP) - a controversial point even upon adoption of the protocol- with

the focus on documentary requirements for the trans-boundary movement of LMOs. Exporters

of agricultural products including Australia, New Zealand, Canada, the United States, and

Brazil, and the importers of agricultural products such as the EU and many developing nations

are now sharply pitted against each other.

As a result, some agreement was reached on the details of handling, transportation,

packaging, and identification of the LMOs moving between nations, and further details were left

to future meetings of experts. The parties to the protocol thus agreed to form a compliance

committee and an ad hoc group on liability and redress, thus confirming the delegation power

and laying the groundwork for implementing the protocol as an effective international norm for

transporting LMOs between nations. The conference also adopted eleven resolutions regarding

the handling, transportation, packaging, and identification of LMOs, compliance with duties,

liability and redress, capacity building, information-sharing and the BCH, the decision

procedures of importing nations, and the mid-term project plan of the protocol.

As mentioned above, following the MOP/COP-1’s decision to form an ad hoc group, the said

group drafted the following resolution statement beforeand in preparation for the 2nd MOP/COP

<Table 3-1-2-1>.


132

<Table 3-1-2-1> Status of Ad Hoc Working Group’s Discussions

1

2

3

4

Conference date

January 26-27, 2005(Montreal, Canada)

January 27-28, 2005(Montreal, Canada)

March 16-18, 2005(Montreal, Canada)

Name of conference

1stmeeting of government andinternational organizationcoordination conference forimplementing activities forcapacity building for bio-safetyand fund-raising.

Meeting of the Liaison Groupon Capacity-building for Bio-safety.

1st meeting of the ComplianceCommittee under the Bio-safety Protocol.

1st meeting of the Ad HocOpen-Ended Working Groupfor requirements regardingidentification of LMOs-FFP.

Discussion details

Adopted operationalprocedures and guidelines forthe coordination conference,and detailed rules for operatingthe capacity-building networkfor bio-safety.

Discussed measures forfacilitating the implementationand coordination of capacity-building action plan aimed ateffectively fulfilling theprotocol; and deliberated andadopted delegation details andoperational rules of the liaisongroup.

Adopted the draft compliancecommittee regulations,subjectto the approval thesecond COP-MOP scheduledat May-end, 2005.

Attempted to write the draftresolution statement foridentification requirements ofLMOs-FFP in accordance withthe Protocol, Article 18,Section 2(a), but failed toreach agreement.

Source: Broadly taken from Bio-safety Trends (1stquarter of 2005, www.biosafety.or.kr).

B. Issues of the 2nd COP-MOP

On May 30-June 3, 2005, the second COP-MOP was held in Montreal, Canada, the city

where the protocol was originally adopted. The second meeting was convened in accordance

with the first meeting held in February 2004, which mandated the opening of the COP-MOP

every year for the following five years. Attending the second COP-MOP were over 750

personnel including delegates from 100 nations and 119 parties involved in the protocol,

delegates from eleven observer nations including the United States, members from the FAO

and other organizations, and personnel from 89 NGOs such as the U.S. Grains Council and

Greenpeace. Such a large attendance lent the conference the aura of a gala event.

The second COP-MOP, like the first, hotly debated the adoption of a resolution on

documentary requirements for the handling, packaging, and transportation of LMOs-FFP

between nations. In addition, the agenda included the adoption of meeting rules for the

March 14-16, 2005(Montreal, Canada)


133

compliance committee, the adoption of a BCH operation and working plan, support for capability

building of the developing nations, notification of the exporting nations, establishment of

guidelines and systems of risk assessment and management, liability and redress systems,

research into the social and economic impact of LMOs, cooperation over the exchange of

information, and the enhancement of public awareness and participation. This conference was

expected to be of considerable help in laying the groundwork for effectively fulfilling the protocol.

Korea was an observer at the second COP-MOP, since it did not ratify the protocol following

the first COP-MOP. However, it has been assiduously preparing for fulfillment of the protocol,

and successfully showed its determination to do so by presenting capacity-building workshops

run by the Korea Bio-safety Clearing House for the benefit of other Asian nations, and by

completing the project to establish the UNEP-GEF national bio-safety structure. Furthermore,

Korea briefly introduced to the conference its plan to ratify the protocol upon the reshaping of

related domestic laws, and emphasized the need to reflect evenly the interests of all parties

based on a realistic approach to the protocol.

In particular, Korea presented its position on BCH and other major issues, and indicated a

need to cut the timeframe for the multi-year BCH operation plan formulated by the Secretariat,

which is intended to further activate BCH projects, thus enabling the reduction of the timeframe

to be reflected in the resolution.

The 2ndMOP-COP also failed to adopt a resolution on the details of documents

accompanying LMOs-FFP, a focal issue. This failure suggested once again the difficulty arising

from coordinating the conflicting interests of the exporters of LMOs-FFP (Australia, New

Zealand, Canada, the United States, and Brazil) and importers such as the EU and the

developing nations. As such, this issue was referred to the third COP-MOP scheduled for

March 2006 in Brazil. However, with only a few months remaining before the third MOP-COP, it

remains to be seen whether the sharply conflicting interests of the exporting and importing

nations regarding detailed identification of LMOs-FFP will be resolved.

Meanwhile, although the conference failed to adopt a resolution on detailed identification of

LMOs-FFP, the parties to the protocol adopted a total of 14 resolutions following constructive

discussion of various issues such as the formulation of diverse measures for the

implementation of the protocol, the assessment and management of the risks of LMOs -

regarded as important for the successful fulfillment of the protocol, the operation of the BCH and

its activities, capacity building, and the need to raise public awareness and encourage public

participation.

3. Domestic Trends

A. Trends of Domestic Protocol Fulfillment Laws

Korea signed the protocol in September 2000. The law on the trans-boundary movement ofLMOs and others, under the initiative of the MOCIE, was enacted and promulgated in March2001 with the aim of fulfilling the protocol domestically and securing bio-safety. Following theenactment of this law, in June 2002, the planned legislation of the corresponding enforcementordinances (draft) was announced, but their confirmation and the National Assembly’sratification of the protocol, aimed at building national capacity and laying the necessarygroundwork for securing bio-safety, were considerably delayed.

However, in the interim, the relevant ministries strove to reshape considerable portions of therelated enforcement ordinances, rules, and guidelines, and thus, on September 20, 2005, theenforcement ordinances passed the cabinet meeting and were finally confirmed. The domesticprotocol fulfillment law stipulates the import and production approval systems of LMOs, theinstallation of research facilities for the development and use of LMOs, and the establishment ofa Bio-safety Committee. The enforcement ordinances defined the details concerning LMOsimports and the methods and procedures of LMOs production approval, and other matters.

The enforcement ordinances outline the job description of the central administrative agencyaccording to the usage of LMOs (enforcement ordinances, Article 2), import and productionapproval of LMOs (Articles 5-15), deliberation of the risks involved (Articles 16-17), approval ofresearch facilities (Article 23), the establishment of the Bio-safety Committee (Articles 28-29),and other matters, therebylaying the groundwork for securing the safety of LMOs.

B. Movements of the Related Ministries regarding Bio-safety

The related ministries secured the recent confirmation of the enforcement ordinances asfollows. First, MOCIE, responsible for fulfilling the protocol, worked to confirm the enforcementordinances and regulations of the domestic protocol fulfillment law by reshaping and clarifyingambiguities and the abuse of power in the draft enforcement ordinances in consultation withrelated ministries. In addition, MOCIE is pushing to formulate notices on the deliberation ofassessment data on the environmental risks of industrial LMOs, risk assessment criteria anditems, the procedures of identification, handling,and management, the reporting andexamination of industrial LMOs, as well as plans on the composition and operation of the Bio-safety Committee.

3. Domestic Trends

134

3. Domestic Trends

135

MOAF, in accordance with the domestic protocol fulfillment law and the agricultural productquality management law, allottedvarious tasks to the various agencies under its wing regardingthe R&D, production, and distribution of LMOs for agricultural, forestry and forest use in order toestablish an efficient safety management system for LMOs. Specifically, MOAF is working tosecure systems for: agricultural LMO research-related laboratory safety managementassessment and deliberation of the environmental risks posed by LMOs import and productionapproval of LMOs handling and management of LMOs trans-boundary surveillance of LMOsand identification of LMOs. Finally, in view of the demand and supply status of importedagricultural products, MOAF has either finished deliberating or is deliberating the LMOs that arebeing distributed - or that are highly likely to be distributed - in Korea.

MOHW is responsible for assessing and deliberating the human risks of LMOs for use inhealthcare, prior approvals of import, the development and use of LMOs in experiments andresearch, and permission for the installation and operation of LMO development or researchfacilities. As such, MOHW formulated notices of the state’s approval and deliberation guidelineson the import of LMOs and their development for use in experimentation and research. MOHW,jointly with MOST, also formulated draft installation criteria for LMO research facilities and safetymanagement regulations.

MOMAF is responsiblefor the assessment, deliberation, and distribution of LMOs for marineand fishery use. Although efforts to develop and commercialize LMOs for the marine and fisherysector are not yet fully underway, the risks posed by marine LMOs to the environment andhumans are being raised internationally just as much as those posed by agricultural LMOs.Thus, MOMAF perceives a need to secure more thorough safety management measures in themarine and fishery field. The ministry has structured a system in preparation for the domesticenforcement of the protocol, test operated a deliberation system for environmental risks,formulated and implemented an identification system and handling guidelines, and devised anassessment system for environmental risks and information protection.

MOE is responsible for safetymanagement concerning the development, production, importand export, sales, transportation and storage of LMOs for use in environmental cleaning. Theministry is also responsible for consulting the impact that LMOs under the responsibility of otherministries have on environments. Thus, MOE formulated notices on safety management of theenvironmental risks posed by LMOs for use in environmental cleaning, and is conductingresearch to assess the environmental risks raised by LMOs.

MOST is responsible for securing the safety of LMOs for use in experiment and research. Theministry has formulated corresponding guidelines, and is working to structure an informationsystem of the development and usage status of LMOs for use in experiment and research, aswell as an infrastructure designed for developing basic technologies and assessing the risksposed by LMOs.

C. Future Prospects

The major exporting and importing nations of LMOs-FFP are sharply pitted against each otherregarding identification details. As such, agreement was reached to decide the specific detailswithin two years of the enforcement of the protocol. However, the second COP-MOP, almosttwo years thereafter, failed to bring about an agreement, and attention is now being drawn towhat kind of result the third COP-MOP will bring. In particular, advanced nations have alreadyenacted LMO-related domestic laws and regulations and are acquiring protection regardingLMOs, while developing nations have not yet established their own related laws and ensuredproper protection from LMO-regulations, a cause of concern for the global community.However, with China having recently become a party to the protocol, the United States andother LMO- exporting nations - although non-parties to the protocol - could not overlook thetrans-boundary LMO movement system mandated by the protocol. Also, since the identificationof LMO-FFP details is linked to the system of compliance and liability and redress, the comingyears will be crucial for preparing a system for fulfilling the protocol.

Thus, Korea is spurring the last drive for ratification of the protocol. On September 30, 2005,the nation confirmed the enforcement ordinances of the law on the trans-boundary movementof LMOs, and is progressing to ratification of the protocol, enactment of the enforcement rules,and formulation of notices by related central government agencies. As such, the first half of2006 will see the enforcement of the protocol and its domestic fulfillment law.

Also, the related central government agencies are discussing issues that will arise from theenforcement of the protocol fulfillment law. Following reshaping of the enforcement rules,notices, and other sub-regulations, they are set to present the details on import, production,distribution, handling management, and LMO R&D to the related interests and formulateprocedures for enhancing those interests’ understanding.

3. Domestic Trends

136

1. Outline

137

Section 2

Trends in Bioethics-related Legislation

1. Outline

The ultimate objective of BT is to diagnose, prevent, and treat human diseases; it must

therefore develop in close relationship with humanity. Article 1 of the Law on Bioethics and

Safety states, "This law aims to secure bioethics and safety in BT, prevent the infringement of

human dignity and values and harm to the human body, and create conditions for developing

and using BT for preventing and treating human diseases, thus contributing to the

enhancement of national health and life quality." BT research, even from its initial stage, should

consider human-related values, risks, benefits, and so forth, as well as examine all the ethical,

legal, and social dimensions. Due to this situation, the ethical, legal, and social implications of

BT were included in the recent BT research, including research into genomes (ELSI).

With the birth of the cloned sheep Dolly, Korea saw a brisk ethical, legal, and social

discussion of BT, and, as a result, has enacted and is implementing the Law on Bioethics and

Safety. The law passed the National Assembly in December 2003, was promulgated as Law

No. 7150 on January 29, 2004, and took effect on January 1, 2005. The law serves as the basic

legal framework for the ethics of BT.

Global regulations regarding BT ethics are not as yet consistent. This situation is attributable to

the fact that the views on individual BT research are diverse and the BT field continues to

expand into new areas. In particular, probing questions over the permissible scope of research

are being raised, including the permission or non-permission for research into such areas as

stem cell research using somatic cell nuclear transfer technology and genetic testing. In the

case of Korea, despite its early enactment and enforcement of the Law on Bioethics and Safety

compared with other nations, such controversies continue to rage. Questions are raised, first,

because the BT field continues to develop and explore itself. BT research ultimately aims to

expand human understanding, treat human diseases, and enhance life quality, and since

138

1. Outline

humans exist, BT should logically continue to expand its areas. Thus, whenever new

dimensions to BT emerge or are forecast, new levels of discussion will arise. Second, the law

on Bioethics and Safety is the result of a compromise, and thus has limitations. BT researchers

do not want to have their research freedom impinged upon, and emphasize that BT will boost

national competitiveness and create economic benefits. In contrast, the religious community,

diverse civic groups, and other organizations have highlighted the ethical problems raised by

BT, and are trying to limit the scope of the research.

The Law on Bioethics and Safety consists of nine chapters and 55 articles, and a number of

supplementaryrules. Chapter 1 stipulates the purpose of the law, the definition of

theterminologies in the law, the application scope of the law, the duties of local governments

and BT researchers, and their decisionrights. Chapter 2 stipulates the National Bioethics

Review Commission under the presidential ordinance and the Institutional Review Boards

mandated in each related research institute.Chapter 3 stipulates the creation and research of

embryos and others. Section 1 stipulates the ban on human cloning and others; Section 2

stipulates the artificial fertilization of embryos including the creation of embryos; and Section 3

refers to somatic cell cloned embryos. Chapter 4 stipulates genetic testing; specifically, it

mentions regulations about genetic testing institutes, the permitted scope of genetic testing, the

provision and abolishment of testing objects, and management of and access to related

records. Chapter 5 stipulates the protection and use of genetic information and others, such as

a ban on discriminating against the use of genetic information, and the operation of gene banks.

Chapter 6stipulates gene therapy such as the elaboration of the scope of gene therapy, and

gene therapy institutes. Chapter 7 stipulates supervision under the law with supervisory entities

such as the Minister of Health and Welfare. Chapter 8 stipulates supplementary rules such as

the central government’s or local governments’ financial support for somatic stem cell research,

state subsidies, the power of delegation and commission of the MOHW, and confidentiality.

Chapter 8stipulates punishments against the violation of the law. Supplementary rules stipulate

the enforcement date of the law, and reports on the research of spare embryos.

Ethical, legal, and social controversies may arise across the BT field. In Korea the main

controversy concerns ethical, legal, and social agreement regarding stem cell research using

somatic cell nuclear transfer technology and genetic testing. As such, the next section deals

with the provisionsof the law regarding stem cell research using somatic cell nuclear transfer

technology.


139


A. Law on Bioethics and Safety

According to the Law on Bioethics and Safety, stem cell research using somatic cell nuclear

transfer technology has been granted limited permission. The earnest discussion of the law was

prompted by social discussion of life cloning using somatic cell nuclear transfer technology.

Thus, this law stipulatesvarious provisions with regard to life cloning using somatic cell nuclear

transfer technology.

The law’s basic attitude to somatic cell nuclear transfer technology is to prohibit the cloning of

individual humans and the fusion of different kinds, thus granting limited permission to stem cell

research using somatic cell nuclear technology. Article 11, Section 1, of this law, stipulates that

no one shall implant a somatic cell cloned embryo in the womb, maintain the implantation status

or give birth to the implanted embryo, thereby entirely prohibiting somatic cell nuclear transfer

for the purpose of producing individual humans. Furthermore, Article 11, Section 2, prohibits the

actsof provoking or arranging such acts under Section 1 of Article 11. Violation of Article 11,

Section 1, of the law, will incur a sentence of over ten years of imprisonment (Article 49, Section

1), and attempted violators will also face punishment. (Article 49, Section 2.) Furthermore, acts

of provocation and arrangement will incur a maximum sentence of three years in prison. (Article

51, Section 1, Subsection 1.)

In addition, Article 12 of the law prohibits embryo implantation between different breeds.

Section 1 of Article 12 stipulates that no one shall implant a human embryo in the womb of an

animal or an animal embryo in the womb of a human being, thereby banning outright all acts of

implanting a human embryo in the womb of an animal and the researching or creating of

individuals, or of implanting an animal embryo in the womb ofa human being and the

researching or creating of individuals. This measure aims to prevent the combination of human

beings and animals. Although an embryo is formed with a particular species, the individual that

is pregnant with the embryo implanted in its womb may exchange blood and nutrients with the

embryo and create the fusion of a different species; this broadly infringes the dignity of

humankind, and that is why such a provision is stipulated. Violators of this provision will face a

maximum sentence of five years in prison. (Article 50.) Section 2 of Article 12 elaborates on

banned acts, and violators of each of the banned acts will face a maximum sentence of three

years in prison. (Article 51, Section 1, Subsection 2.) Subsection 1 of Section 2 of Article 12

stipulates the prohibition ofthe act of either fertilizing human ova with animal sperms or fertilizing

animal ova with human sperms, provided that the medical testing of the activity of human

sperms is allowed. The act of fusing gametes of an animal and a human being is a typical

implantation of different species, and should be banned. Subsection 2 of Section 2 of Article 12

prohibits the act of transplanting an animal somatic cell nucleus into a human ovum that has

had its nucleus removed. This provision prohibits the act of transplanting between different

species using somatic cell nucleartransfer technology it considers that implantation between

different species can be conducted not only by direct implantation between gametes, but also

by somatic cell nuclear transfer technology. However, this provision prohibits only the act of

implanting an animal somatic cell nucleus into a human ovum that has had its nucleus

removed, but does not prohibitthe act of implanting a human somatic cell nucleus into an animal

ovum that has had its nucleus removed. When research is conducted by implanting somatic cell

nucleuses into human ova and stem cells are extracted to treat diseases, it may be difficult to

obtain human ova, and risks may be caused to women who donate their ova. Thus, certain

quarters insist that the use of animal ova in research should be permitted as they can be

obtainedmore easily and are less risky to humans, but the act of implanting human somatic cell

nucleuses into animal ova is a kind of act of implantation between different species, and thus

appropriate regulations against this act should be established. Subsection 3 of Section 2 of

Article 12 bans the act of fusing a human embryo and an animal embryo. This provision

considers that the development of BT couldenable a fusion of different species not only at the

stage of gametes, but also at the stage of embryos. Subsection 4 of Section 2 of Article 12

prohibits the act of fusing embryos with different genes. This aims to prevent not only a fusion

between different species, but also a genetic fusion between human beings. In the case of

natural reproduction as well, the genes of the sperm provider fuse those of the ovum provider,

thus creating a fertilized egg. Thus, the fusion of human genes with different genetic information

is a kind of reproduction. This provision aims to prevent theartificial fusion of genes at the

embryonic stage as it could lead to various side effects such as gene manipulation.


140


141

The pros and cons are sharply divided over the research of stem cells using somatic cell

nuclear transfer technology. Stem cell research using the said technology aims to treat human

diseases, and acquire knowledge of and develop therapy for sterility and others. However, the

focal point of the controversy over this research concerns the precise nature of the ethical and

legal status that should be granted to the nuclear transfer construct created in the process

Some hold the view that the construct is the same as a human embryo.. Since it is argued that

human embryos have the potential toeventually develop into human beings, Please refer to the

discussion of the legal status of human embryos by Jung Gyu-won "Legal Study on Human

Embryo Cloning Using Somatic Cell Nuclear Transfer," Bioethics Vol. 1, No. 1, 2000, pp. 24-25.

and that the scientific and medical utility gained from stem cell research based on somatic cell

nuclear transfer can be obtained from research conducted using spare embryos and research

into somatic stem cells Please refer for this discussion to Jung Gyu-won, "Legal Problems of

Human Embryo Closing," Medical Jurisprudence Vol. 2, No. 1, 2002, pp. 78-82. , strong

opposition has been made to stem cell research using somatic cell nuclear transfer. This

argumentis based on the presupposition that the construct created by somatic cell nuclear

transfer has the same ‘existence’ value as a human embryo, and that the human embryo

should be respected as a complete human being. Also, unlike in the case of spare embryos, the

construct created by somatic cell nuclear transfer is aimed at researching or treating other

people’s diseases; therefore, it is argued that although the use of spare embryos for the

purposes of research is allowed, stem cell research using somatic cell nuclear transfer should

not be allowed. Meanwhile, the argument wherein stem cell research based on somatic cell

nuclear transfer does not infringe upon human dignity stems from the fact that the beginning of

human life starts not with the moment of fertilization, but 14 days after fertilization when the

‘primitive streak’is created. This theory first cites the idea that the sign of a human being is

individual identity, and that an individual’s identity begins after the creation of the ‘primitive

streak’ second, somatic cell nuclear transfer uses nucleus-detached ova and somatic cells and

thus does not undergo the traditional fertilization process. Thus, it is argued that the output

created by the somatic cell nuclear transfer should not be called a human embryo, but should

instead be regarded as a construct created by somatic cell transfer.

Ultimately, the Law on Bioethics and Safety was a compromise between these prosand cons.

According to the law, somatic cell nuclear transfer is permitted only for the research of

muscular dystrophy and rare and intractable diseases stipulated under the presidential

ordinances. Also, the types and scope of the targets of researchbased on somatic cell

nucleartransfer shall be screened by the National Bioethics Review Commission and

determined by the President (the Law on Bioethics and Safety, Article 22). Violators of this

provision will face a maximum sentence of three years in prison (Article 51, Section 1,

Subsection 6 of this law). In addition, attempted violators will face punishment (Article 51,

Section 13 of this law).

B. The Situation in Foreign States

Nations differ in their position regarding somatic cell nuclear transfer-based stem cell research.

Recently, the U.N. issued a political declaration to the effect that all types of human cloning

should be banned. This U.N declaration is only political, and thus is not legally binding on its

member nations. However, the said political binding power is never meaningless. Nations

prohibiting the said technology-based stem cell research by law or policy include France,

Germany, Spain, Denmark, Finland, Austria, and Japan. Nations moving to legalize such a ban

include the United States, Australia, and others. The only nation allowing technology-based

stem cell research is the U.K., while nations reviewing the research under strict conditions

include Sweden, Israel, China, Singapore, and others.

The United States has taken the stance of not providing federal government support to

somatic cell nuclear transfer-based stem cell research. After 1996, the Dicky Amendment

mandated that the Department of Health and Human Services (DHHS) prohibits support for the

creation of human embryos, although it does not prohibit embryonic stem cell research using

other funds. In September 2001, President Bush banned financial support for the research

which involves the destruction ofhuman embryos in order to create human embryonic stem

cells. Meanwhile, in November 2004, the state of California established the California Institute

for Regenerative Medicine and held a civil ballot for a bill aimed at supporting stem cell

research.

The U.K. law on human fertilization and creation allows embryo reproduction and embryo

research until before the ‘primitive streak’ is created; i.e., within 14 days of fertilization in the

case of sterility, innate diseases, abnormal genes and chromosomes, abortion, contraception,

and others. In January 2001, the U.K., in accordance with the enactment of the Law on Artificial

Fertilization and Embryo Creation, established the Human Fertilization and Embryology


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143

(Research Purposes) Regulations, aimed at expanding the scope of somatic cell nuclear

transfer-based stem cell research. Although the U.K. prohibits somatic cell nuclear transfer for

the purpose of cloning individuals, it does allow technology-based stem cell research subject to

the permission of the relevant administrative authorities. Also, in recent years, it has established

and operates stem cell banks. The U.K. has recently seen an expansion of the scope of

allowable BT research.

Germany has embraced the concept of human dignity greatly since the Second World War.

The 1990 Law on the Protection of Embryos (Gesetz zum Schutz von Embryonen), Article 6,

Section 1, states, "Any person who artificially manipulates the same genes as those of a human

embryo or a different embryo, an embryonic human being or a dead person, shall face a

maximum sentence of five years of free-choice punishment or fines."Section 2 of Article 6

stipulates that any person who transplants an embryo into a woman (specified under Section 1)

shall face the same punishment, while Section 3 mandates punishment to attempted violators.

Also, Article 2 prohibits the vitro culture of human embryos except for the purpose of pregnancy.

Germany’s laws purport to view embryos as human beings and strictly prohibit the act of

destroying them. However, the world is witnessing the ever-growing development of BT and

Germany has a\ has changed its regulations on stem cell research accordingly. The 2002 Stem

Cell Law (Gesetz zur Sicherstellung des Embryonenschutzes im Zusammenhang mit Einfuhr

und Verwendung menschlicher embryonaler Stammzellen, StZG)allows research using

imported stem cells, thus giving a green light to the research, albeit to a limited extent.

Japan prohibits not only the somatic cell nuclear transfer-based cloning of individuals, but also

somatic cell nuclear transfer, in accordance with the 2000 Law on the Regulation of Human

Cloning Technology and others( ). However,

Japan’s Ministries of Education, Culture, Sports, Science and Technology are moving to amend

the particular guidelines on handling embryos that prohibit somatic cell nuclear transfer-based

stem cell research, and allow the research.

In November 2004, Switzerland passed the bill referred to the national referendum which, from

March 2005, allows stem cell research as other European nations do. Currently, the University

of Geneva and others are conducting stem cell research.


Significantly, the Law on Bioethics and Safety has brought controversial BT research and its

clinicalapplication into the legal category. The law allows researchers to conduct research under

legal protection. Also, the law provides mechanisms designed to prevent the many possible

risks created by BT research and itsclinical application. Given that BT research is conducted

competitively on a global scale, the related committee needs to continuously reshape the

system for greater efficiency and reliability.

Korea is maintaining its competitive edge in stem cell research and other BT fields. Given that

BT is directly related to medical acts, international joint research is needed. Thus, regulations

should be defined to determine under which regulations international joint research should be

conducted. To take initiatives in international joint research, Korea should not only possess

leading technologies but also create its own legal and systematic mechanisms, enabling the

operation of such internationally acknowledged technologies and their criteria to become the

standard.

To this end, Korea should gradually resolve the following issues:

Korea needs to reshape the overall regulations governing stem cell research. Also, the current

Law on Bioethics and Safety stipulates in Article 46 only to the effect that - regarding stem cell

research - the central government or local governments may provide financial support for

fostering somatic stem cell research. Given that research using spare embryos or somatic cell

nuclear transfer aims to acquire stem cells and apply them toclinical treatment, it is deemed that

sufficient regulation on stem cell research and its clinical application is required.

For research on various types of stem cells and their application, please refer to Jung Gyu-

won, "Legal Problems of Cell Application Research," : Park Eun-jeong et al., Ethics and Law

Policy for Research on Stem Cells, Ewha Women’s University Press, 2004, pp.47-84.

Furthermore, there are no regulations on research and the clinicalapplication of bio organs or

organs of different species as yet, The Law on Bioethics and Safety, Article 12, prohibits

implantation between different species, and this presumably does not regulate organ

transplantation between the different species. Organ transplantation between different species

aimed at research and application is used to manipulate animal organs suitable for


144


145

transplantation into the human body. For details, please refer to Jung Gyu-won, "Ethical and

Legal Problems of Organ Transplantation between Different Species," ELSI Study, Vol. 2, No.

1, 2004, pp. 99-116. and given that these areas constitute a crucial part of BT, the appropriate

legal regulation mechanism should be established.

Now is the time to shift the ethical, legal, and social discussion from the question of prohibition

or allowance to a more specific and detailed discussion. Likewise, the focal point of the

discussion should include the criteria and procedures by which the regulation should be

conducted. To decide on this matter, all related parties should come together and discuss the

issue. Also, given that BT research has greater risks and uncertainties compared to other areas

of research, it nevertheless produces greater benefits if successful; as such, the Korean science

community should pass cool judgment on the competitive field and bear all of the ethical and

social issues in mind when conducting its research. Finally, the views of Korea’s citizens, the

potential beneficiaries of BT, are very important. Appropriate surveys of public awareness

regarding BT The ELSI Team of the Center for Functional Analysis of the Human Genome has

continued to survey ordinary people’s and experts’awareness of BT and present the results.

These data not only show the chronological changes in people’s awareness of BT, but also

serve as valuable data for policy decisions on BT. and rational discussions should be

conducted before seeking the solutions.

1. Outline

Given that the BT field targets living organisms for its invention, BT, unlike other technology

fields, operates its own unique system of intellectual property rights. In recent years BT

research methods have continued to be developed, and similar types of inventions are

consequently proliferating, making the contents and levels of application for patents increasingly

complicated and diverse. In particular, after the completion of the Human Genome Project, the

advanced nations are engaged in heated competition for early monopolization of the genetic

revolution.

Controversies within the various nations have continued to occur over a number of issues

ranging from whether patents on microorganisms are feasible to whether patents on organisms

per se - and their derivatives - can be permitted. Embryo cloning or embryonic stem cell-related

inventions that the rapid development of BT has brought about are expected to contribute

dramatically to the medical technology pool of mankind, while, as some people are inclined to

indicate, they pose ethical problems such as the possibility of human cloning.

To this day, this field has differed broadly fromother fields in terms of patent review, and the

interpretation of patent claims and infringements. Efforts must be made to enhance the

corresponding patent review quality and modify the patent system.

BT requires long-term R&D investment in order to produce something worthy of patenting, but

such patents are easy to steal, and thus the corresponding intellectual property rights should

benefit from greater protection. International consensus has been formed in this regard, and, in

the long run, the securing of source technologiesand long-term investments towards this end

are the sure key to the competitiveness of BT. In Korea, many BT fields are still hovering in the

initial, basic stage, and they evidently require intensive R&D investment in accordance with the

government’s long-term road map. Korea’s R&D achievements should be domestically

industrialized through powerful patent protection policies.

1. Outline

146

Section 3

Trends in the BT Intellectual Property System


147


A. Status of BT-related Patent Applications - Filing and Registration

2004 saw 2,909 cases of BT-related patent applications, up 10.1% from 1998when they

enjoyed an initial surge. With the steady development of the domestic bio-industries, patent

applications as filed by nationals account for 62.5%of the total. However, in recent years, the

number of filed patent applications has been on the decline, indicating that applicants are

pursuing quality rather than quantity <Table 3-3-2-1>.

Amid an increase in the number of BT-related patent applications and patent reviewing

officials, the number of patent applications showed a brief decline in 2000 -2001, before surging

again in recent years to reach 17,000 registered applications in 2004. (See Table 3-3-2-2) By

technology category, inventions in microorganisms, enzymes and genetic engineering, which

fall under C12N of the International Patent Classification (IPC), account for the largest portion.

This category is followed by inventions in water treatment using biomedicine and microbes, and

in proteins. In particular, the number of patent applications as filed by foreigners has not

increased significantly, while the number of registered patents by Korean nationals has surged,

a noteworthy development. However, patent applications as filed do not generally concern

source technologies, but rather patents for improved and applied technologies. Thus,

investments in the development of technologies across the bio-industries should be expanded

to come up with patents for core source technologies.

<Table 3-3-2-1> BT-related Patent Applications as Filed by Year

Description 1998 1999 2000 2001 2002 2003 2004 August2005

Korean

Foreigner

Total

857

773

955

998

826

1,097

1,550

1,042

2,592

1,896

1,110

3,006

1,983

963

2,946

1,938

998

2,936

1,817

1,092

2,909

1,036

527

1,590

(Unit: number of cases)

* Based on the number of patent applications as filed that were confirmed and classified by the end of August 2005.


148

YearDescription

<Table 3-3-2-2> BT-related Patent Registration by Year

A01H New varieties of plants

A01K67/00-67/04 New animals

C02F 3/00-3/34, 11/02-11/04Wastewater treatment using

microbes

C12N microorganisms, geneticengineering

C12P Fermentation products

C12Q,STesting, measurement,separation and purification

Total

2000

103

13

141

15

639

4180

121

1576

163

11314

375693

382

40

17599

274

343468

191433

72027

539331870

2001

181

19

152

17

137

20

8085

165

2068

214

38

11

274774

424

46

15554

209

331750

312253

181533

641270911

2002

363

39

92

11

95

14

10470

174

2199

228

132336

4573

118

707

77

242107349

362258

281644

81220

819349

1,168

DFT

DFT

DFT

DFT

DFT

DFT

DFT

DFT

DFT

DFT

DFT

DFT

DFT

1998

617

516

87

15

9890

188

10815

123

53035

52108160

379

46

275133408

6243

105

222850

122739

690492

1,182

1999

819

516

65

11

8897

185

16013

173

31316

73122195

421052

199203402

425597

263561

152944

667584

1,251

2003

171

18

8-8

142

16

13978

217

1217

128

51621

3871

109

506

56

23594

329

402262

331548

161228

716324

1,040

2004

287

35

16-

16

193

22

11167

178

34812

360

51520

7876

154

1056

111

401104505

7134

105

13838

176

311142

1,351373

1,724

August2005

432

45

8-8

295

34

12746

173

1417

148

71522

8660

146

623

65

255102357

392261

7431

105

158

23

886369

1,255

(Unit: number of cases)

D: domestic; F: foreign; T: total

Note: 1. Based on IPC (IPC 7th edition) 2. domestic: application by nationals. Foreign: application by foreigners

A61K 7/26, 7/28,35/12-35/84,38/00-

38/58,39/00-39/44, 48/00,51/00-51/10 Bio-medicines

C07H19/00-21/04 Sugars

C07K Protein

G01N 33/50-33/98 Diagnosticreagents

A01N 63/00-65/00Bio-pesticides

C12C-M Fermentation and itsequipment


149

B. Analysis of State-led R&D Project-based BT Patents

According to the analysis of the state-led R&D project-based patents that were applied forfiling in 1998 -2002 and were released in 2004, BT-related patents applications as filednumbered 1,462 cases, of which MOST accounted for 65.9% (963 cases), MOHW 13.3% (195cases), and MOCIE 12.0% (175 cases). The three ministries accounted for 91.2% of theapplications.

An analysis of state-led project-based BT patents by R&D institution shows that the businesssector accounts for the largest share at 38.5%, individuals 30.3%, state-run research institutes18.6%, and academia 12.5%.

As a result of the analysis of patents by detailed technology, "other technologies" that do notbelong to the OECD-formulated international BT patent classification account for 42.8% of thetotal of 1,282 cases, while other patents are concentrated on genomic technologies,technologies for developing bio-drugs, protein-related technologies, and technologies forexploring biological resources. The analysis of patents for "other technologies" indicates thatgeneral drugs represent 29.9%, organic chemical substances 24.5%, and medical devices andmedical supplies 11.2%, suggesting that Korea’s state-led R&D project-based BT patents donot generally concern state-of-the-art technologies, but generic drugs.

Technologies for exploring biological resources

Technologies for culturing animal and plant cells

Enzyme engineering-related technologies

Genomic technologies

Protein-related technologies

Technologies for utilizing antibodies

Bioprocess technologies

Measurement and diagnosis technologies

Technologies for developing bio drugs

Technologies for developing bio-pesticides

Technologies for raising transgenic animals and plants

Technologies for developing fermented foods

Environmental BT

Others

Total

75

17

30

208

87

14

45

71

139

6

25

5

11

549

1282

5.9

1.3

2.3

16.2

6.8

1.1

3.5

5.5

10.8

0.5

2.0

0.4

0.9

42.8

100.0

10.2

2.3

4.1

28.4

11.9

1.9

6.1

9.7

19.0

0.8

3.4

0.7

1.5

-

100.0

<Table 3-3-2-3> Technologies of State-led R&D Project-based Domestic Patentsas Applied for Filing

Number ofcases Ratio (%) Ratio

(%, except "others")

Source: Study on the In-depth Analysis and Assessment of State-led R&D Projects in BT (September 2004)


KIPO is amending patent review criteria in order to protect new technologies in the rapidlydeveloping BT field, as well as present criteria for bio-ethic standards in line with internationaltrends. According to the BT development trends, KIPO is striving to expand the intellectualproperty rights system and infrastructure and make patent review professional to protect rightsover superior patents efficiently.

A. Formulation and Amendment of BT Patent Review Criteria

1) Formulation of BT Patent Review Criteria (March 1998)

BT-related patents involve inventions that relate directly or indirectly to self-duplicatingbiological materials, namely, organisms capable of reproducing themselves, geneticinformation, and copying. KIPO formulated the standard BT patent review criteria byindustrialsector in 1998. The criteria are classified into inventions related with genetic engineering, andthose related with microbes, plants, and animals, as well as stipulate ethical requirements andconditions on non-patenting.

2) First Amendment of BT Patent Review Criteria (December 2000)

Following the release of the first results of the Human Genome Project, new types ofinventions created from the corresponding output, such as DNA fragments and Singlenucleotide polymorphisms (SNPs), appeared.To protect such inventions, the criteria wereamended. The major amendments to the criteria include the establishment of review criteria forDNA fragments such as the HGP output, expressed sequence tags (ESTs), and SNPs. Theamendment allowed comprehensive scope for patent claims involving genes, proteins,monoclonal antibodies, and others, and stipulated additional description requirements forantisenses, thus reflecting the existing work review procedures, as well as reshaping the criteriafor assessing the singularity in preparation for the large volume of genetic information patentfiling.

3) Second Amendment of BT Patent Review Criteria (December 2003)This amendment aimed to protect new technological advances in BT, present bioethics

criteria, and effectively protect genetic engineering-related inventions. Thus, it stepped up thedescription requirements for the scope of claims for gene and protein mutants, specifiedparticular requirements for proteins that cannot be specified by sequence, and protected therequirements for the possibilityof utilizing monoclonal antibodies and the claim scope description


150

requirements.

4) Third Amendment of BT Patent Review Criteria (May 2005)

The second amendment reflected the bioethical problems in BT based on the Law onBioethics and Safety, but with the enactment and enforcement of the law delayed, such contentwas deleted from the amendment. The third amendment, in line with the implementation of thelaw, targeted inventions from government-approved research achievements for patentregistration. Also, the amendment regarded inventions deriving from legally prohibited acts orresearch achievements as invalid in accordance with Patent Law, Article 32, thuscomplementing the criteria for bioethics and safety in the BT field. The amended patent reviewcriteria for the BT field can be downloaded from KIPO’s homepage (www.kipo.go.kr), as well asthe chemical and BT review division menu and the review data archive.

B. Securing of Patent Review Experts and Bolstering of ReviewCapabilities

KIPO continues to employ review specialists in the related areas in order to efficiently copewith the ever-increasing volume of BT patent filing and enhance review specialization. As of theend of November 2005, KIPO had 31 Ph.D. holders among the review personnel for the BTfield, and 37 review specialists.

One should acquire the latest technologies in diverse fields to review patents in the BT fieldwherefusion between different technologies occurs. To this end, KRIBB has organized theannual KRIBB Conference at which researchers hold over 200 seminars on small themes, andwith an opportunity for patent reviewers to acquire new technologies. A cumulative total of 190reviewers have participated in the conference since August 2004 to acquire information on thelatest BT trends.

KIPO also runs a bio patent research association comprised of personnel from within andoutside the agency to review the latest BT issues receiving domestic and overseas attentionand analyze the related technology and patent trends. The Bio Patent Research Associationstrives to invite experts in research and intellectual property rights from inside and outside tohold seminars and debates so as to acquire the latest technologies and information, andexchange them. It also endeavorsto publish and distribute annual activity reports, therebyupgrading patent review quality and spreading BT. Regarding the protection of gene resourcesand conventional knowledge that are being raised as part of new knowledge property rightsglobally, KIPO runs the Gene Resources and Conventional Knowledge Research Associationcomprised of working-level staff and experts from inside and outside the agency to researchand review current related issues at home and abroad, and dispatch a delegation to the WIPO-organized inter-governmental committee, thereby bolstering external activities.


151

C. Review System for the List of DNA Sequence

In order to promptly and accurately search nucleic acids or amino acids-related inventions andstructure-related databases, KIPO mandated the submission of electronic files on nucleic acidbases and amino acid sequence data in connection with patent inventions as filed forapplication since 1999. KIPO also concluded an agreement with KRIBB on July 8, 2004 forenhanced efficiency in the DNA sequence search system, provided the DNA sequence datafiled for patent application to the National Genome Information Center within KRIBB, andreceived the provision of the DNA sequence search system, thereby securing a search systemwith a markedly enhanced search function and speed.

The National Genome Information Center receives information on patent orders as releasedevery month from KIPO, and provides a free web-based search service (www.patome.net) todomestic and overseas researchers wishing to search patent order.


152

<Table3-3-3-1> Number of Patents Involving Sequence List Applied for Filing(Unit: number of cases)

Description 1998 1999 2000 2001 2002 2003 2004 August2005

Korean

Foreigner

Total

857

773

2,855

998

826

2,997

1,550

1,042

2,592

1,896

1,110

3,006

1,983

963

2,946

1,938

998

2,936

1,817

1,092

2,909

1,063

527

1,590

* Based on the number of patents applied for filing and duly classified by the end of August 2005

<Figure 3-3-3-1> Screens of PATOME, the domestic patent order search system


153


A. Purpose of the Microorganism Deposition System

The work of creating inventions using microorganisms involves living organisms; thus, despitethe detailed description of their bacteriological properties and the characteristics of relatedmicroorganisms, it is impossible for a third party to obtain the related microorganisms. Since it isdifficult to describe such details in the patent specification in such a way as to allow third partiesto repeat and reenact the procedure, the microorganism deposition system is designedtodeposit filed microorganisms with a public depositary authority, and allow thirdparties to receivethe allocation of such microorganisms after the patent has been disclosed, thus making up forthe description in the patent specification. According to a dictionary definition, a microorganismis an "organism that is small and indiscernible to the naked eye", but, in accordance with Korea’

s patent laws, it is a biological material that can be deposited for the purpose of the patentprocedure, and as such includes genes, vectors, transgenic organisms, monoclonal antibodies,viruses, bacteria, yeast, molds, mushrooms, unicellularalgae, protozoans, and the cells ofanimals and plants. To file an application for a microorganism-related patent, the applicantshould deposit the microorganism with a deposition agency designated by the KIPOcommissioner in accordance with patent enforcement ordinance Article 2, or with aninternational depositary authority in accordance with the Budapest Treaty on the InternationalRecognition of the Deposit of Microorganisms for the Purposes of Patent Procedure, andshould then attach the deposition certificate to the application.

<Figure 3-3-4-1> Outline of the Procedure for Microorganism Deposition and Patent Application

Patent plicant(inventor)

Allotment applicanKIPO

Depositary agency

Deposition of

Deposition certificate

Attach the depositioncertificat

Patent applicatio Apply for theallocation ofmicrooorganisms

Allocationapplican

B. Microorganism Depositaries and their Management Status

Korea runs four microorganism depositaries. When an inventor deposits a microorganism withan agency, the agency then issues a deposition certificate to the inventor. In the event that athird party applies for the allocation of a patent-related microorganism, KIPO may issue anallocation certificate to allow the allocation of the deposited microorganism. KIPO also inspectsthe management status of deposited microorganisms on a quarterly basis.

KIPO recently pushed for the improvement of microorganism deposition work, amendingcertain internal regulations in compliance with the Budapest Treaty and unifying documentaryforms among depositaries. Furthermore, KIPO streamlined the microorganism allocationprocedure for the convenience of applicants, and introduced an online application through itshomepage.


154 Description

<Table 3-3-4-1> Domestic Microorganism Depositaries

Korean Collectionfor Type Cultures

(KCTC)

Korean CultureCenter of

Microorganisms(KCCM)

Korean Cell LineResearch

Foundation (KCLRF)

Korean AgriculturalCulture Collection

(KACC)

Internationaldepositary

Domesticdepositary

Qualified (June 30, 1990)

Qualified(August 25, 1981)

Qualified (June 30, 1990)



Qualified(January 1, 2002)

(Unit: %)

Biological resources filed for patent application are importantfrom an industrial perspective, butthey are to be abolished at the end of the patent period, incurring a loss of important nationalresources. Thus, advanced nations such as Japan and the United States, being aware oftheirimportance, back up and keep microorganisms filed for patent application as importantnational biological resources in separate places. Currently, Korea does not have a back-upsystem for the biological resources secured through patent application, and such biologicalresources, if kept at a single facility, may perish at any moment, therebymaking it impossible toexecute the invention of a patent. Thus, as of 2006, Korea will operate a program for preservingand managing microorganisms field for patent application, installing automatic liquid nitrogen-based freezing and storage containers in separate places from the existing depositedmicroorganisms, and managing the back-up of microorganisms filed for patent application.

Not qualified

Not qualified

1. Introduction

155

1. Introduction

The bio-industries employ BT engineering, utilize the functions and information of organisms,and produce useful materials for mankind, the resulting products of which are known as BTproducts. However, most BT products consist of medical devices, foods, and drugs designed toimprove human health. Drugs designed for the diagnosis, prevention and treatment of diseasesrepresent over 60% of BT products. As such, the approval and permit status, as well as otherrequired measures regarding BT drugs, will be outlined hereunder.

To help foster the bio-industries as a next-generation growth engine, the Korean governmentis currently investing hundreds of billions of won into the research and development of BTproducts, and will continue to expand its investments for years to come. These boldinvestments have produced substantial achievements in such areas as cell therapy, genetherapy, DNA chips, and protein therapy. Diverse BT products are entering the clinical arena,thus raising expectations that they will be make the leap from the academic and technologicalsectors to the industrial sector within a short period of time. The bio-industries have greatpotential as Korea’s next-generation growth engine.

As evidenced by the many announcementsconcerning BT products, Korea has developednumerous domestically approved products, including an autologus chondrocyte treatment drugand an autologus skin cell treatment drug. In May 2005, an allogenic skin cell treatment drugwas approved for the first time; currently, about 30 kinds of BT products are undergoingconsultation with the KFDA for clinical use or approval.

Despite huge levels of investment from both the government and the private sector in BTproduct R&D, Korea’s approval and permit capabilities have to be improved considerably inorder to establish a mass production system.

Section 4

Current Status and Suggestions for BT Products Approval Procedures

156

1. Introduction

The level of Korean BT engineering now stands at 80-90% that of the most advanced nationsin terms of basic technologies and practicalization technologies, although the nation’s bio-industries are more competitive nationally compared with other industries. The problem is thatits technologies for assessing the safety and effects of BT products - and approving andpermitting them - have yet to equal those of the advanced nations. The enhancement of themandatory assessment of safety and effects will provide additional impetus to the expansion ofKorea’s BT medical product sector.

Unlike conventional drugs, bio drugs will involve new materials and new technologies, and assuch they can neither enter markets nor obtain reliability in the global market without firstensuring their safety and efficacy. In connection with this matter, the characteristics andauthorization processes for biotechnology products, domestic and foreign trends in thedevelopment of biomedicine, the influence of biotechnology on the pharmaceutical industry, theKFDA’s safety management policy for biotechnology products, and the problems facing theindustrialization of biotechnology products, along with any other points concerning the industry,will be reviewed.


157

2. Characteristics of, Approval and PermissionProcedures for Bio Drugs

Compared to other industries, the bio-industries have huge added-value and growth potential.For Korea, a country with few natural resources, the bio-industries constitute a competitivesector capable of exploiting human resources alone. With regard to bio drugs, the case of EPO(erythropoietin), which is used as an anemia treatment drug, is highly illustrative of this point; 1gof EPO is worthas much as USD 670,000, and consequently it is regarded as a typical highadded-value BT product. Its sales have grown at a high annual average of over 20%,accounting for over 60% of the achievements in the bio-industries, proving their high added-value and extremely high growth potential.

Despite the characteristics of the bio-industries, bio drugs, like other drugs, are designed todiagnose, reduce, treat, and eliminate human diseases, and as such must undergoassessments of both their safety and efficacy before entering the market: such an assessmentdetermines whether they are industrialized or not. A drug takes overten years to research anddevelop, actual investment costs are mostly channeled into non-clinical testing using animalsand clinical testing using humans, and the costs of clinical testing represent the greater part ofthese costs; thus, the level of gathering non-clinical and clinical test data for assessment of theirsafety and efficacy of bio drugs and then assessing them is the key to the competitive bio-industries.

In other words, how rationally and scientifically the safety and effectiveness of bio drugs areassessed is the key to the advancement of their industrialization. Well-established assessmentcriteria are imperative to ensure investment cost efficiency.

Even in the case of the United States, a novel drug development powerhouse equipped withsuperior human resources, the U.S. FDA sees 70% of submitted data that is not related todirect proof of the safety and efficacy of the drugs involved. In view of this fact, it is indeedimportant that Bio drug developers prepare dependable safety and effectiveness assessmentcriteria and allow scientific and rational assessment.

Given that foreign assessmentcriteria are made known in real time, Korea is not immune tothe above-mentioned circumstance. With insufficient human resources for scientific and rationalassessment, Korea needs to reinforce national competitiveness in the assessment of safetyand efficacy of Bio drugs at an early date by reshaping the related system in order to effectivelyfoster bio-industries. On top of its past efforts to benchmark advanced nations’regulations withrespect to conventional drugs, in order to consolidate the global positionof the next-generationengine of the bio-industries, the Korean governmentneeds to structure its own rational andscientific system for assessing the safety and effectiveness of bio drugs to industrialize themand secure their international competitiveness.

158


<Figure 3-4-2-1> Outline of the Process from Novel Drug Development to Approval


159


The Bio drugs thus far developedare mainly vaccines utilizing DNA recombinant technologies,

and treatment proteins such as the highly typical EPO. However, areas in which intensive

investment is currently being made include Gene Therapy Products, Anti-sense, Cell Therapy

Products, Monoclonal Antibodies, and DNA Recombinant Pharmaceutical Products.

Designed for the purpose of treating diseases, gene therapy products involve the injection of

genetic materials or cells, and the insertion of genetic materials into the human body. In Korea,

Donga Pharmaceutical Co.’s VMDA-3601 injection liquid (gene therapy product for creating

bloodstreams) is currently undergoing second-phase clinical testing, while China became the

world’s first nation to approve the market sale of gene therapy drugs.

Of bio drugs, anti-sense products are receiving great attention. They take advantage of RNA’

s effect of inhibiting the creation of disease-causing proteins, and thus are expected to be used

to treat intractable diseases such as cancers, virus infections, and autoimmune diseases, or for

using mass DNA synthesis technologies and analyzing DNA functions. They are currently

undergoing animal testing for various diseases.

Cell therapy products include drugs that use stem cells and are designed to proliferate or

selectively choose autologus, allogenic or xenogenic cells in order to restore the functions of

cells and tissues, or otherwise change the ological characteristics of cells, and thus diagnose,

treat, and prevent diseases. In 2001, Korea saw Cellontech Co. become the world’s second

firm to obtain the approval for the market sale of an autologus chondrocyte therapy product,

Chondron. In December 2002, Tego Science Inc. became the world’s second firm to obtain

approval for the commercialization of an autologus skin cell therapy product, Holoderm, and this

year the company became the world’s first to obtain approval for anallogenic skin cell therapy

product, Kaloderm, which is now being sold on the market. With research into embryonic stem

cells and somatic stem cells using cord blood, and the establishment of a cell bank, extensive

research is being conducted to treat intractable and hereditary diseases.

Monoclonal antibodies are designed to differentiate plasma cells producing antibodies aimed

at recognizing specific antigens associated with diseases, and these antibodies can be mass-

produced artificially for application to the human body. Large amounts of R&D investment have

been made at the government level, but no drug of this nature has been approved either at

home or abroad.

DNA recombinant pharmaceutical products are mass-produced by transferring the DNA

responsible for physiological activity in the human body, using information of diverse enzymes,

hormones, microbes, colon bacilli, and yeast, and synthesizing the intended proteins. Protein

pharmaceuticalproducts using DNA recombinant technologies include a wide range of products

such as insulin, growth hormones, various immunity-adjusting cytokines, and vaccines.

Currently, research is being expanded to develop them into protein chips and use them as

diagnostic drugs.

‘DNA chip drugs’created from molecular and biological knowledge and mechanical and

electronic technologies are designed to be inserted into a small space in hundreds or even

hundredsof thousands of units, to identify differences inDNA structure between individual

persons, between races, between individuals, and between healthy persons and patients, to

diagnose cancers and hereditary diseases, to examine histo-compatibility for

organtransplantation, to research drug tolerance, and to identify pathogenic microbial viruses

such as tuberculosis and Human papillomavirus. As such, DNA chips are expected to

contribute to the marked development of novel drugs and eventually to DNA therapy.

To facilitate the commercialization of BT products since 2001, KFDA has implemented the

guardian service system, which was designed to provide administrative and technical support

from the initial product development stage to the product commercializing stage. Prior

counseling is completed or underway for 19 cell therapy products, 13 gene therapy products, 2

DNA chips, and 2 DNA recombinant pharmaceutical products, totaling 37 products from 29

companies. Of these, 3 cell therapy products and 2 DNA chips were approved for market sale.


160

Counseled products

Cellular Therapy

Gene Therapy

DNA chip

Other

Products already on themarket

Three skin cell therapyproducts, as well aschondrocyte therapy

products(3 items)

-

2(items)

Cardiac muscular cells, autologus fattycells, autologus bone cells, autologusoral mucosal cells, autologus dendriticcells, keratinocyte cells, allogenictransplanted pancreatic cells,mesenchymal stem cells, autologusNKcells, autologus muscular cells,autologous activated lymphocyte cells,ibroblast therapy, autologuschondryocyte cells, and embryonicstem cells

Cartilage therapy, AIDS vaccines,therapy products for hepatic carcinomaand Parkinson’s disease

Diagnosis of cervical cancer

Artificial blood products

Types

< Table 3-4-3-1 > Current Status of Domestic Bio-Pharmaceuticals under negotiation as of 2005

4. Influences of Biotechnology on the Pharmaceutical Industry

161

4. Influences of Biotechnology on the PharmaceuticalIndustry

The development of biotechnology is working as an effective means not only in the productionareas of biomedicine, but also in the development of new drugs. With human genomeinformation now known and understood, the number of candidate substances for novel drugsbeing researched has risen from just 500 as little as one year ago, to some 5,000-10,000 atpresent. In addition, the analysis of genetic functions using anti-senses has shortened the timeframe to a few years. Anti-senses, and the genetic activation measurement test, facilitate thesearch for candidate substances over a shorter period. Furthermore, the development oftoxicogenomics and pharmacogenomics is enhancing efficiency in the overall clinical area.Even during the clinical testing stage, the safety and efficacy of cell culture by organ can bereviewed, and thus many experts forecast that the development of novel drugs using BTengineering will shorten the time for production and commercialization by two-thirds, while thecorresponding cost will be reduced to one-twentieth of the previous outlay.

With the practicalization of pharmacogenomics fitting drugs to individual genetic types, andwhile the side effects from drugs developed for groups are currently attributed to the specifics ofindividuals, they will, in the future, either be attributed to the makers or minimized. Theacceleration of novel drug development throughgenome analysis and the expansion ofresponsibility will lead to the merger and acquisition of pharmaceutical manufacturers, therebycreating giant pharmaceutical producers.

5. Promotion of Safety Management for BT Products byKFDA

The KFDA aims to conduct scientific assessments of the safety and effectiveness of bio drugs,

ensure consumer safety, improve the safety assessment level, and thereby enhance the

nation’s competitiveness in thebio drug field. To this end, as a complement to the guardian

service system run since 2002, if a BT researcher or a BT research institute requests

administrative and technical assistance to industrialize and commercialize the research results

of a drug, amedical supply, a medical device or a cosmetic product, the KFDA, as of March

2005 and in accordance with the regulations for the operation of the guardian service system for

bio drugs and others, will provide the corresponding assistance from the product development

stage.

Furthermore, thanks to scientific development, products composed of two or more combined

functions (e.g. DNA chip and artificial skin) have been or are being developed; as such, the

KFDA has standardized the corresponding handling procedure, and formulated prompt

handling regulations for multi-functional drugs and others to enable the related departments to

avoid confusion in their work and minimize work delays.

The KFDA has also formulated over 30 guidelines with regard to BT products. The guidelines

aim to enhance the reliability of companies engaged the industrialization of cutting-edge BT

products, with the aim of preventing unnecessary and duplicate investments. The guidelines

also consider the characteristics of those BT products (cell therapy products, gene therapy

products, DNA chips, etc.) with a high probabilityof weakening the safety assessment

rationalization, since BT products individually have strong proper properties, making it difficult to

establish and apply the formatted, common safety and effectiveness-related criteria as is

commonly done with general chemical substances and drugs. From 2005-2009, the KFDA will

conduct 15 outsourced research projects each year, and formulate safety and efficacy

assessment guidelines by product.

Furthermore, to provide support to bio-industries, the KFDA is working to improve systems,

provide information, and gradually structure the support infrastructure. For example, the KFDA

features vaccine and BT rooms on its homepage, and produces and distributes bio drugs-

related newsletters aimed at stepping up the information provision service. In order to structure

a close cooperative system between industries, schools, and research institutes, the KFDA also

5. Promotion of Safety Management for BT Products by KFDA

162

continues to hold policy discussion sessions and presentations with related groups, and is

working to ensure a reliable safety and efficacy assessment system for industrializing BT

products through research groups comprised of experts drawn from the industries and schools

in each field. Furthermore, in 2003, the KFDA formulated regulationsfor the biological and

approval/review systems in consideration of the characteristics of BT products.

In particular, the KFDA, in consultation with MOWH, is pushing to amend the Law on

Pharmaceutical Affairs before the year’s end to separate the approval of the drug

manufacturing business from the approval of manufactured products in order to maximize the

core capabilities of drug manufacturers and research and venture firms and thereby fully

support the industrialization of BT products. As such, the KFDA is aiming to invest intensively in

the core R&D capabilities of venture firms, thus advancing the industrialization of BT products.


163


The success of industrializing BT achievements depends on securing comprehensivecompetitiveness in the basic sciences, technological practicalization, and safety assessmentareas, which is the key to national competitiveness. Korea’s current safety assessmenttechnologies - essential to commercializingnew bio materials - are still at a level below those ofthe advanced nations, consequently raising potential difficulties at the industrialization stage.

Well-balanced investment at the governmental level is being made in the area of safety andefficacy assessment of BT products, which is essential at a time-consuming stage whereby BTis used to explore and develop new substances and commercialize them. Although it is difficultto predict the success of BT under industrialization, however, more investment and greaterresearch capabilitiesshould be diverted into the commercialization process of BT products. Tothis end, there is a need to structure human and material infrastructures in order to prevent trialsand errors and minimize time and financial loss during the non-clinical and clinical stages. Toensure international quality, develop bio-safety assessment technologies, develop testingmethods, research advanced nations’systems of drug safety management, and formulate therelated guidelines, the government needs to provide unstinting support to domestic small- andmedium-sized venture firms with less favorable capital creation conditions so as tocommercialize their basic research achievements.


Aiming to rapidly industrialize BT products on the basis of a scientific safety and efficacyassessment, the KFDA established a BT support team at the National Institute for ToxicologicalResearch, allowing it to serve as a coordinator between the KFDA, researchers, and venturefirms, in order to establish a safety and efficacy assessment system for the prompt approval ofcommercialization by private research agencies of candidate substances for bio drugs, toprepare an administrative and technical support system, and to provide information services.Furthermore, the KFDA, in order to lay the groundwork for the emergence of bio-industries asthe next-generation growth engine, is also preparing to establish and operate a bio drug andlong-term support team to present the appropriate research directions for governmentalinvestment in the industrialization of BT products, as well as help prepare related data. Finally,the KFDA is poised to conduct prior research projects in conjunctionwith soon-to-be-industrialized private or government-supported products, to formulate safety and efficacyevaluation guidelines in advance, establish a close cooperative system with technical evaluationdepartments, and thereby efficiently shorten the safety and efficacy assessment period.

Section 5: BT Companies and Their Support Systems


164

1. Worldwide Trends

165

1. Worldwide Trends

A. Expansion of the Bio-industry Markets

With some 4,400 companies engaged in the bio-industries, the 2004global bio-industry marketwas estimated at USD 82 billion; Ernst ＆ Young estimated the revenues of public BTcompanies at USD 54.6billion for 2004. See <Table 3-5-1-1>.

Description

<Table 3-5-1-1> 2004 Global Bio-industries centered on Public Companies

Major content 2004 2003 Change(%)

PublicCompany

Data

No. ofCompanies

Revenues

R&D expense

Net Loss

No. of Employees

Public Companies

Private Companies

Public & PrivateCompanies

54,613

20,888

5,304

183,820

641

3,775

46,553

18,636

4,548

174,520

611

3,860

17

12

17

5

5

-2

(Unit: USD million, number of personnel, number of units, %)

Source: Ernst " Young, Beyond Borders Global Biotechnology Report 2005, June 2005

B. Support System for Fostering the Bio-industries as a NationalStrategic Industry

The United States, Japan, and the advanced European nations, as well as a number ofdeveloping and underdeveloped nations have selected and are fostering the bio-industrialsector as a national strategic industry. They have also established and are implementingvarious state-funded bio-industry support programs for R&D and the structuring of the relatedBT infrastructures.

Section 5

BT Companies and Their Support System

4,416 4,471 -1


A. The United States

1) Corporate Trends and Product Sales

In 2004, the United States saw the bio-industries reach USD 33.3billion in sales and USD 46billion in revenues <Table 3-5-2-1>. Of the major BT players including Eli Lilly and Johnson ＆Johnson, Amgen grossed USD 10.55 billion in sales and USD 2.363 billion in net revenues fromthe commercialization of five bio drugs including the anemia treatment drug Erythropoietin,marking a major success case for the nation. Genentech and other BT-specialized firms havealso emerged as profitable players <Table 3-5-2-2>.


166

<Table3-5-2-1> Status the Bio-industries in the United States as of 2004

2003

Public Company Industry Tortal

Change

19.4

19.2

15.7

10.1

2004

333

460

198

187,500

2003

284

392

179

177,000

Change(%)

17.4

17.2

11.0

6.0

259

359

136

124,800

Description2004

310

427

157

137,000

Product Sales

Revenues

R&D expense

No. ofCompanies

Employees

(Unit: USD 100 mil., number of companies, number of personnel, %)


330 314 5.1 1,444 1,473 -2.0

<Table 3-5-2-2> 2004 Management Status of Major BT Companies

Company name Revenues R&D Expense

2,028

948

688

392

431

224

70

NetIncome

2,363

785

25

87

79

449

161

Employees

14,400

7,646

4,266

7,100

5,400

1,654

2,291

MarketCap.

81,500

57,100

22,200

14,400

6,200

15,100

2,600

10,550

4,621

2,212

2,201

1,723

1,325

887

Amgen

Genentech

Biogen IDEC

Genzyme

Chiron

Gilead Sciences

Biovail

(Unit: USD mil., number of personnel)



167

As the number of U.S. FDA-approved bio products on the market reached 340 in2004, Ernst＆ Youngannounced in its report that 13 blockbuster bio drugs had each sold over USD 1 billionin 2003. See <Table 3-5-2-3>. In the case of bio drugs, the drive to use animal cells andindustrialize therapeutic antibodiesis gathering momentum, and the industry is seeing theapproval of BT-based low-molecule drugs.

<Table 3-5-2-3> 2003 Blockbuster Bio Drugs

No.Productname

Company Sales No. Productname Company Sales

1

2

3

4

5

7

Procrit

Epogen

Intron-A

Remicade

Enbrel

Epogin/NeoRecormon

Aranesp

J & J

Amgen

Schering-Plough

J & J

Amgen

Amgen

3,984

2,400

1,851

1,729

1,600

1,500

8

9

10

11

12

Rituxan

Neulasta

Neupogen

Avonex

Humulin

Total

Biogen IDEC

Amgen

Amgen

Biogen IDEC

Eli Lilly

1,489

1,300

1,300

1,168

1,060

21,962

(Unit: USD mil.)

Source: Ernst " Young, Resurgence: Global Biotechnology Report 2004, June 2004

2) Status of Operation of Support Systems

In order to maintain its front-running status in the BT field, the United States is implementingnational competitiveness enhancement strategies to boost intellectual property rights andsecure early occupation of the BT markets. In 2004 the federal government channeledinvestment worth USD 27.2 billion into BT R&D, and is currently supporting the Small BusinessInnovation Research(SBIR) system, which was conceived to facilitate the commercialization ofdeveloped technologies with private capital, and Project Bioshield, which was designed to dealwith biological terrors, along with other federal programs.

The federal government has also implemented tax support systems, provides support fortechnology transfer and investment attraction, and is working together with numerous ContractResearch Organizations (CROs).

B. Japan and Europe

In 2004, Japan saw its total bio-industry market reach 1.7469trillion yen. See <Table 3-5-2-4>.Six ministries including the Ministry of Economy, Trade, and Industry invested 265.6billion yenin the BT field. In 2005, the Japanese government earmarked 267.9billion yen for BT R&D as

Roche/Chugai 13 Humalog1,5606 Eli Lilly 1,021

168


Description

<Table 3-5-2-4> Japan’s Total Bio-industry Market in 2004

BT-based products

BT-related products

Outline

Genetically modifiedproducts

Cell fusion-basedproducts

Cell culture products

Drugs and precisionchemical products

Food

Devices and reagents

Bio-information,services, sense-related,environmental products

Total

392

1,247

1,298

17,469

443

1,252

1,246

16,434

2004

Total market size

2003

Source: Nikkei BP, Nikkei Bio Annual Reports 2005, December 2004

<Table 3-5-2-5> Status of Europe’s Bio-industry as of 2004

Description

Revenues

R"D expense

No. ofCompanies)

Employees

2004

Public Company Industry Tortal

6,261

3,363

25,640

2003

6,606

3,746

32,470

Change

-5

-10

-21

2004

11,337

6,189

72,420

2003

1,277

6,354

77,910

Change

1

-3

-7

(Unit: million euros, number of companies, number of personnel, %)


part of its policy to support the bio-industries. In the same period, Europe saw revenues from the bio-industries reach 11.3 billion euros. See

<Table 3-5-2-5>. The European Union is currently working together to implement policies tosupport individual member states in the BT field.

992 992

1,187 1,166

1,215 1,180

11,138 10,155

98 96 2 1,815 1,861 -2

(Unit: 100 mil. yen)

3. Domestic Trends

169

<Table 3-5-3-1> Total Value of Supply and Demand in Korea’s Bio-industries in 2003

Supply

Demand

Import

Total

Amount

Ratio

Amount

Ratio

Amount

Ratio

Amount

Ratio

2,079,070

80.2

513,226

19.8

2,592,296

1,598,448

61.7

993,848

38.3

(Unit: million won, %)

Source: KATS/KIIET/BAK under MOCIE, 2004 Survey of the Status of the Domestic Bio-industries in 2003

3. Domestic Trends

A. Current Status of the Industry

A 2004 survey conducted on 605 domestic companies engaged in the bio-industries in 2003by the Korean Agency for Technology and Standards, the Korea Institute for IndustrialEconomics and Trade, and the Bio-industry Association of Korea under MOCIE, categorizedthe companies into two groups: those involved in R&D and product sales (432 respondents),and those involved only in R&D (173 respondents). Of these, 387 were engaged in sellingdomestic products, 45 were selling imported products, and 41 were selling both domestic andimported products.

Of the 11,013 professionals working in the BT industries, research manpower accounted for5,808 (53%), 46% of whom wereM.S. degree holders, while production manpower numbered5,205 (47%), with technical manpower accounting for 65%.

B. Scale of the Bio-industries

A survey on the status of the domestic bio-industries in 2003 reported that the total value ofsupply and demand had been estimated at 2.5923 trillion won. See <Table 3-5-3-1>). In termsof supply, production supply stood at 2.0791 trillion won and import supply at 513.2 trillion won,while domestic demand accounted for 1.5985 trillion won and export demand 993.8 billion won.In 2004, the estimated total value for supply and demand rose to 3 trillion won.

Production

Domestic demand

Export

170

3. Domestic Trends

Description

<Table 3-5-3-2> Market Volume of the Domestic Bio-industries in 2003

Major products Domestic produced Import Total

Blood products,vaccines, diagnostic

kits, etc.

Enzymes, reagents,bio pesticides,fertilizers, etc.

Health andfunctional foods,

food additives, etc.

Environmentalrestoration,

environmentalmicrobial products,

etc.

Transgenic animalsand plants,

experimentalanimals, etc.

DNA chips,biosensors, etc.

Bioprocess,analyzers and others

Bio-safetyassessment, DNA

analysis, etc.

Total

(Unit: million won)

Bio-medicine

Bio-chemistry

Bio-food

Bio-energy &resources

653,635

78,652

177,036

91,057

31,759

34,412

1,085,222

320,244

41,512

1,468

210

146,785

456

513,226

973,879

120,164

178,504

91,267

178,544

34,868

1,598,448

Source: KATS/KIIET/BAK under MOCIE, 2004 Survey of the Status of the Domestic Bio-industries in 2003

The market value of the domestic bio-industry was worth 1.5985 trillion won in 2003, withdomestically-produced products accounting for 1.0853 trillion won (68%) and imported productsaccounting for 513.2 billion won (32%). See <Table 3-5-3-2>. This figure consists of 973.9billion won (61%) in bio medicines, 357 billion won (22%) in bioprocess devices/bio foods, and267.6 billion won (17%) for other products. The bio-industry market for 2004 has beenestimated at 1.918 trillion won.

C. Bio-industry Support Systems

In 2004 the government invested 601.6 billion won (with 708.6 billon won projected for2005) through eight ministries including MOST, MOCIE, and WOHW. See <Table 3-5-3-3>.

Under the pan-governmental project for bio drugs and bio organs - selected as a next-

Bio-environment

Bio-electronics

Bioprocess anddevices

Bioprocessvalidation and

service

12,959 2,137 15,096

5,712 414 6,126

3. Domestic Trends

171

generation growth engine - the government is set to inject a subsidy of 35.6 billion won into thebio organ, bio chip, and bio drug sectors in 2005.

Korea’s bio-industry support systems are categorized into technology development andinfrastructure structuring, and MOST is providing intensive support to five state-funded R&Dprojects including the Bio Discovery Project, as well as to promising core technologies and next-generation source platform technologies. MOST controls 33% of the government’s BT R&Dbudget.

MOCIE is providing support to industrialization technologies development projects includingthe Bio Star Project, and infrastructure structuring such as the securing of ContractManufacturing Organizations. MOCIE controls 27% of the government’s BT R&D budget.

Year

<Table 3-5-3-3> BT Sector Budget of the Korean Government

2004outcome

Description

R"D

Infrastructure

Total

R"D

Infrastructure

Total

MOST

1,893

154

2,047

2,158

167

2,325

MOE&HRD

233

-

233

264

-

264

MOAF

589

159

748

609

183

792

MOCIE

632

652

1,284

801

1,088

1,889

MOHW

576

743

1,319

686

692

1,37

MIC

88

27

115

102

40

142

MOE

189

17

206

195

18

213

MOMAF

46

18

64

62

21

83

Total

4,246

1,770

6,016

4,877

2,209

7,086


Source: MOST, 2005BT Fostering Implementation Plan, April 2005

MOHW is providing support to R&D projects such as healthcare BT development, andinfrastructure projects such as infrastructure development for healthcare technologies. MOHWcontrols 19% of the government’s entire BT R&D budget.

Furthermore, five ministries - MOAF, MOE & HRD, MIC, MOE, and MOMAF - support theirrespective R&D projects, controlling 21% of the government’s BT R&D budget.

In addition to this overall support, the related ministries and agencies are providing support forbio-industry-related facility fund loans, business incubation, and business fostering aimed atfacilitating the development of the bio-industries, and they are also committed to activatingrelated companies through regional BT cluster formation and support for internationalcooperation.

2005 plan

172



A. Case Study and Monitoring of the Bio-industry Strategies of theAdvanced Nations

Technologies and industrialization in the bio-industrial sector are developing rapidly, while theadvanced nations continue to prove that the bio-industries constitute a new potential growthindustry; as such, Korea should continue to monitor, analyze, and utilize the bio-industrystrategies of those countries. The United States is implementing speedy patent reviewprocedures and competitiveness enhancement measures for early occupation of the market,Japan is pursuing government-led BT strategies, and Europe is developing EU-widecooperation and competitiveenhancement strategies, so Korea needs to make broad efforts toadvance into the territory of competitors such as Canada and Australia, as well as that of theunderdeveloped nations.

B. Creation and Utilization of Representative Success Cases

The United States, the world’s bio-industrial powerhouse, has created notable bio-industrysuccess cases such as Amgen, thus leading the nation’s overall bio-industry development andgrowth. In view of this case, Korea needs to create marked success cases in the bio-industriesby facilitating their development, and establish a success model that will lead the growth of theentire bio-industrial sector and ensure the development of the regional industries. In particular,Korea needs to maintain intensive investment in and concentrate its capabilities on the bio-industries if it hopes to reap long-term benefits.

C. Direction for the Development of Bio-industry Products

Since major bio drugs will see their patents expire after 2006, Korea must embark on anintensive program to develop and industrialize follow-up generic bio drugs. The nation needs toexploit bioprocesses and other industrial BT engineering procedures and enhance BT productproductivity and quality in order to improve its products significantly.

In conjunction with these efforts, Korea should evaluate the opportunities for the developmentof novel bio drugs including immunity treatment drugs and drug delivery systems; bio therapies


173

such as cell therapy and gene therapy; U-health bio chips and operational systems; geneticallymodified organisms in crops, animals, and plants; bio devices such as diagnostic imagingequipment and analyzers bio environment and energy including microbial decomposition andbio fuels; and new bioprocesses to replace existing processes. It is vital for Korea toindustrialize all these categories, as well as develop fusion technologies such as bioinformatics,and prepare for their industrialization.

In preparation for the regulations that are shortly to be imposed upon existing commercializedproducts including synthetic plastics, synthetic detergents, chemicals and pesticides, Koreaneeds to continue developing both their replacements and new bio-industry products.

REFERENCES 1. MOCIE, 3.12 Project for Bio-industry Development, July 20052. KATS/KIIET/BAK under MOCIE, 2004 Survey of the Status of theDomestic Bio-industries in

20033. MOST, 2005 BT Fostering Implementation Plan, April 20054. BAK, Bio-industry No. 39 - 42, 2004 ~20055. Kim Mun-gi, Direction for Advancing Bio Drugs Overseas, 1st Bio Drug Overseas

Advancement Forum, 20056. Ernst Young, Resurgence: 2004 Global Biotechnology Report, June 20047. Ernst Young, 2005 Beyond Borders Global Biotechnology Report, June 20058. Biotechnology Industry Organization, BIO 2005 ~ 2006 Guide to Biotechnology, June 20059. Cheng KC, Biotechnology and Bio-industry Development, 8th World Chinese Entrepreneurs

Convention, October 200510. Nikkei BP, Nikkei Biotechnology, No. 536/February 2004, No. 562/February 200511. Nikkei BP, 2005, December 2004

Documents

STATUS of BIOTECHNOLOGY in KOREA - … · · 2013-12-02version of "Status of Biotechnology in Korea" a report on the current status and ... Status of BT-related Patent Applications