Article 1(Purpose) #
The purpose of this Decree is to prescribe matters mandated by the Special Act on Fostering and Support of Pharmaceutical Industry and other matters necessary for the enforcement of thereof.
Article 2(Scope of pharmaceutical enterprises) #
"Enterprise complying with the standards prescribed by Presidential Decree in terms of organization, human resources" in subparagraph 2d of Article 2 of the Special Act on Fostering and Support of Pharmaceutical Industry (hereinafter referred to as the "act") means any of the following enterprises:
1. An independent research facility with at least five employees exclusively dedicated to research (including at least two employees exclusively dedicated to research with at least three years of research experience in the field of health and medical service technology defined in subparagraph 1 of Article 2 of the Health and Medical Service Technology Promotion Act;
2. Research institutes affiliated with enterprises falling under Article 5(2)4 of the Health and Medical Service Technology Promotion Act.
[This Article Added on Jun. 11, 2019]
[Previous Article 2 moved to Article 2-2 <Jun. 11, 2019>]
Article 2-2(Size of research and development expenses) #
(1) "Size prescribed by Presidential Decree" in subparagraph 3a and b of Article 2 of the Act means the amount of annual research and development expenses for drugs according to the following classifications: <Amended on Jun. 11, 2019>
1. A pharmaceutical enterprise whose annual sales of drugs are less than 100 billion won: Five billion won per year or 7/100 of the annual sales of drugs;
2. A pharmaceutical enterprise whose annual sales of drugs are at least 100 billion won: 5/100 of the annual sales of drugs;
3. A pharmaceutical enterprise which has a compliant good manufacturing practice as determined by the Government or a public institution of the United States of America or the European Union: 3/100 of the annual sales of drugs.
(2) The annual research and development expenses for drugs and the annual sales of drugs under paragraph (1) shall be calculated in accordance with the following criteria:
1. Research and development expenses for drugs and sales of drugs under subparagraph 4 of Article 2 of the Pharmaceutical Affairs Act;
2. Pursuant to Article 7(1) of the Act, the average research and development expenses for drugs and the average sales of drugs in the three business years immediately preceding the business year in which a pharmaceutical enterprise files an application for certification of an innovative pharmaceutical enterprise (Where the number of immediately preceding business years is less than three, referring to the annualized amount of research and development expenses for drugs and the sales of drugs from the year of business commencement to the business year immediately preceding the filing of an application for certification of an innovative pharmaceutical enterprise).
(3) The research and development expenses for drugs and sales of drugs under paragraphs (1) and (2) shall be calculated in accordance with the accounting standards under Article 5 of the Act on External Audit of Stock Companies and the details of expenses included in the research and development expenses for drugs shall be determined and publicly notified by the Minister of Health and Welfare. <Amended on Oct. 30, 2018>
[Moved from Article 2 <Jun. 11, 2019>]
Article 3(Matters subject to deliberation by Committee on the Fostering and Support of the Pharmaceutical Industry) #
"Matters prescribed by Presidential Decree" in Article 6(1)3 of the Act means the following matters:
1. Matters regarding the analysis and evaluation of the outcomes of a comprehensive plan to foster and support the pharmaceutical industry under Article 4 of the Act and an implementation plan for the fostering and support of the pharmaceutical industry under Article 5 of the Act;
2. Other matters regarding the fostering and support of the pharmaceutical industry, which are referred by the chairperson of the Committee on the Fostering and Support of the Pharmaceutical Industry established under Article 6 of the Act (hereinafter referred to as the "committee") for deliberation.
Article 4(Term of office of members) #
(1) The term of office of members commissioned by the Minister of Health and Welfare pursuant to Article 6(2) of the Act shall be two years, and they may be reappointed only once.
(2) The term of office of a member newly commissioned due to the resignation of a member from among the members referred to in paragraph (1) shall be the remainder of his or her predecessor's term of office.
(3) The chairperson may revoke the commission of a commissioned member where the commissioned member is unable to perform his or her duties due to unavoidable reasons or is deemed inappropriate as a member due to a gross neglect of his or her duties
Article 5(Disqualification of, challenge to, or recusal of members) #
(1) A member of the Committee shall not be involved in deliberating any of the following matters:
1. Matters in which he or she is directly involved by means of service, consultation, research;
2. Matters in which a company where he or she has served as an executive officer or employee during the last three years has a direct interest;
3. Other matters in which he or she is deemed to have a direct interest.
(2) If a person, who has an interest in matters to be deliberated by the Committee, has a ground to believe that it would be impracticable to expect a fair deliberation from a member, he or she may file an application to the Committee to challenge such member by stating the reasons therefor. In such cases, the chairperson of the Committee shall determine whether to accept such application.
(3) If a member falls under the grounds referred to in paragraph (1) or (2), he or she may recuse himself or herself from deliberation on the relevant agenda item.
Article 6(Chairperson) #
(1) The chairperson shall represent the Committee and have general supervision and control of its business affairs.
(2) If the chairperson is unable to perform his or her duties due to any unavoidable reason, a member designated in advance by the chairperson shall act on behalf of the chairperson.
Article 7(Meetings) #
(1) The chairperson shall convene and preside over meetings of the Committee when requested by at least 1/3 of all incumbent members or when the chairperson deems it necessary.
(2) A majority of the members of the Committee shall constitute a quorum, and any resolution thereof shall require the concurring vote of a majority of those present; provided, where the contents of the agenda items submitted to the meeting are minor or where there is no time to convene a meeting, a resolution may be made in writing.
Article 8(Administrative secretary) #
The Committee shall have one administrative secretary to handle its business affairs, who shall be appointed by the Minister of Health and Welfare from among public officials belonging to the Ministry of Health and Welfare.
Article 9(Allowances) #
Allowances, travel expenses, and other necessary expenses may be paid to members who attend a meeting of the Committee within the budget; provided, this shall not apply where a member who is a public official attends a meeting in direct connection with his or her business affairs.
Article 10(Composition of working committee) #
(1) The working committee for the fostering and support of the pharmaceutical industry established under Article 6(3) of the Act (hereinafter referred to as the "working committee") shall be composed of up to 15 members including one chairperson.
(2) The chairperson of the working committee shall be appointed by the chairperson of the Committee from among public officials belonging to the Senior Executive Service in charge of policies on the health industry in the Ministry of Health and Welfare, and members of the working committee shall be commissioned by the chairperson of the Committee from among the following persons: <Amended on March 23, 2013; Oct. 1, 2025; Dec. 30, 2025>
1. Persons recommended by the heads of affiliated agencies from among public officials belonging to the Senior Executive Service of the relevant central administrative agencies, such as the Ministry of Economy and Finance, the Ministry of Education, the Ministry of Education, and the Ministry of Trade, Industry and Resources;
2. Persons with extensive experience and expertise in fostering the pharmaceutical industry.
(3) The working committee shall deliberate on the following matters:
1. Matters requiring preliminary review from among the agenda items to be deliberated on by the Committee;
2. Matters instructed by the Committee to deliberate;
3. Other matters referred by the chairperson of the Committee to the working committee for deliberation.
(4) When the chairperson of the working committee is unable to perform his or her duties due to any unavoidable reason, a person designated by the chairperson of the working committee in advance shall act on his or her behalf.
(5) The working committee shall have one administrative secretary to handle its business affairs, who shall be appointed by the chairperson of the working committee from among public officials belonging to the Ministry of Health and Welfare.
(6) Articles 4, 5, 7, and 9 shall apply mutatis mutandis to the term of office, disqualification, challenge, recusal, meetings, allowances of members of the working committee.
Article 11(Detailed regulation of operation) #
Except as provided in this Decree, matters necessary for the operation of the Committee and the working committee shall be determined by the chairperson of the Committee, subject to resolution of the Committee.
Article 12(Certification standards for innovative pharmaceutical enterprises) #
The certification standards under Article 7(2) of the Act shall be as follows: <Amended on Oct. 30, 2018>
1. Excellence in human and physical resource inputs, such as research personnel, investments in research and development, and manufacturing facilities;
2. Excellence in research and development activities for new drugs, such as the planning of research and development, the execution of non-clinical trials and clinical trials related to the development of new drugs, and the mid- to long-term investment plans for research and development;
3. Excellence in technological and economic performance, such as patent and technology transfer of drugs, capabilities to enter into overseas markets, and development and distribution of excellent drugs, and contribution to the improvement of public health;
4. Corporate social responsibility and ethics, such as observing the distribution system and sales order of drugs. etc.;
5. Whether the pharmaceutical enterprise is subject to external audit under Article 4 of the Act on External Audit of Stock Companies;
6. Other matters deemed necessary and publicly notified by the Minister of Health and Welfare as certification standards.
Article 12-2(Exceptions to deliberation on succession to status) #
"Requirements prescribed by Presidential Decree" in Article 7-3(2)2 of the Act means any of the following requirements:
1. Where an innovative pharmaceutical enterprise acquires or merges with another pharmaceutical enterprise, the innovative pharmaceutical enterprise shall maintain its entire business;
2. Where the name, representative, registered director, corporate registration number of an innovative pharmaceutical enterprise or a person who has de facto control over an innovative pharmaceutical enterprise (referring to where he or she owns at least 50/100 of the total number of issued stocks or the total amount of investment or exercises a dominant influence over major decision-making) is changed, the innovative pharmaceutical enterprise shall maintain its entire business.
[This Article Added on Jun. 11, 2019]
Article 13 #
Deleted. <Dec. 27, 2022>
Article 13-2(Special cases concerning construction of research facilities) #
(1) "Facilities recognized as those for subsidiary use prescribed by Presidential Decree, such as manufacturing facilities of trial products" in Article 16-2(1) of the Act means the following facilities:
1. Manufacturing facilities of trial products; provided, this shall not apply to the manufacturing facilities of trial products which intend to commercialize and sell the outcomes of research and development;
2. Other facilities determined and publicly notified by the Minister of Health and Welfare as research facilities or facilities for subsidiary use to increase utilization of research outcomes.
(2) "Areas prescribed by Presidential Decree such as green areas for conservation and agricultural land" in Article 16-2(1) of the Act means any of the following areas:
1. Exclusive residential areas referred to in Article 30(1)1a of the Enforcement Decree of the National Land Planning and Utilization Act, Class 1 general residential areas referred to in item b(i) of that subparagraph, green areas for conservation referred to in subparagraph 4a of that paragraph, and agricultural land referred to in item b of that subparagraph, out of urban areas referred to in Article 36(1)1 of that Act;
2. Conservation control areas under Article 36(1)2a of the National Land Planning and Utilization Act, agricultural land under item b of that subparagraph, agricultural and forest areas under subparagraph 3 of that paragraph, and natural environment conservation areas under subparagraph 4 of that paragraph.
(3) Public notice given by the Minister of Health and Welfare under Article 16-2(1) of the Act shall include the following matters:
1. The name, location, and size of the relevant area;
2. A topographic map in which the relevant area is indicated on a scale of at least 1:25,000.
[This Article Added on Dec. 27, 2022]
Article 14(Entrustment of business affairs) #
Pursuant to Article 22 of the Act, the Minister of Health and Welfare shall entrust the following business affairs to the Korea Health Industry Development Institute established under the Korea Health Industry Development Institute Act:
1. Review for certification of innovative pharmaceutical enterprises under Article 7(2) of the Act;
2. Review for re-evaluation of certification under Article 8(2) of the Act;
3. Support for international cooperation activities of pharmaceutical enterprises and related organizations under Article 21 of the Act.
Article 15(Criteria for imposition of administrative fines) #
The criteria for the imposition of administrative fines under Article 25(1) of the Act shall be as specified in the Appendix.
[This Article Added on Jun. 11, 2019]