International Strategies for Tropical Disease Treatments - Experiences with Praziquantel - EDM Research Series No. 026
(1998; 113 pages) View the PDF document
Table of Contents
View the documentAbstract
View the documentAcknowledgments
View the documentInformation on authors
View the documentExchange rates used in the report
Open this folder and view contentsChapter 1: Policies for praziquantel*
Open this folder and view contentsChapter 2: Bayer & E. Merck: Discovery and development of praziquantel*
Close this folderChapter 3: Shin Poong Pharmaceutical Co.: Process development in the Republic of Korea*
View the documentShin Poong Pharmaceutical Company Ltd.
View the documentShin Poong’s involvement in praziquantel production
View the documentProduction, domestic sales, and export of praziquantel products
View the documentPraziquantel market in the Republic of Korea
View the documentPrice changes of praziquantel in the Republic of Korea
View the documentReferences
Open this folder and view contentsChapter 4: The Egyptian International Pharmaceutical Industries Co.: Praziquantel formulation*
Open this folder and view contentsChapter 5: The international supply of praziquantel*
Open this folder and view contentsChapter 6: Demand for praziquantel and national distribution*
Open this folder and view contentsChapter 7: Prices and production costs of praziquantel*
View the documentOther documents in the DAP Research Series
View the documentDAP Research Series No. 26
 

Shin Poong’s involvement in praziquantel production

In the early 1980s, about 10 percent of the Korean population, about 4 million people, suffered from liver or lung fluke infection (Chosun-Ilbo, August 6, 1983). Most of these affected people were residents along two major rivers, the Nak-dong and Yung-san Rivers. In the second half of 1982, Bayer Pharmaceutical Company of Korea introduced praziquantel products in the Korean market, manufacturing the final product in the Republic of Korea from imported raw materials. However, most of the people affected by liver or lung fluke infection could not benefit from praziquantel treatment because of the drug’s high price in the Korean market. For example, the market price of Bayer’s product (Biltricide) was 30,000 won (for eight-tablet package, equivalent to US$ 38.66, with US$ 1 = 776 won) in 1983, which represented about one ninth of the average monthly earnings of an industrial worker (273,119 won, in nominal terms, according to Korea’s Department of Labor, or about US$ 352). In 1994, the same package sold for 20,000 won (equivalent to US$ 25.64, with US$ 1 = 780 won), representing only about one fiftieth of the average monthly earnings of an industrial worker (1,085,125 won, in nominal terms, or about US$ 1,391).

Shin Poong recognized a potential market in this epidemiological and economic situation. To eradicate the liver and lung fluke infection of the 4 million people in the Republic of Korea, and to address the great need for praziquantel products within the Republic of Korea and overseas, Shin Poong began an effort to find an alternative production method for praziquantel, relying on domestic R&D.

The trade situation created another incentive for seeking a domestic production method for praziquantel. If a domestic producer could manufacture the raw materials for praziquantel products, it would be possible to save thousands of dollars through import substitution. It would no longer be necessary to rely on Bayer’s supply of praziquantel raw materials, which held a monopoly in the Korean market (and elsewhere as well). Import substitution was the main incentive for the Korean government to become involved in the development of praziquantel production technology.

Table 3.4 shows that the helminth egg positive rate in the Republic of Korea has declined remarkably from over 84 percent in 1971 to a mere 3.8 percent in 1993. This remarkable reduction is attributed to a number of factors, including constant government efforts at parasite control among school children and the general public, an improved standard of living, improved living environment, and reformed farming methods. It is widely believed that Shin Poong’s low-cost praziquantel products made it possible for the Korean government to implement its campaign for parasite control among school children and the general public. The data on infection rates (Table 3.4) reflect a connection between declines in positive helminth egg rates and the introduction of praziquantel, with a 50% reduction in infection rates from 1971 to 1981 (before the introduction of praziquantel) and a 10-fold reduction from 1981 to 1993.

The infection rate for Clonorchis sinensis, however, has not declined appreciably over time, even after the introduction of praziquantel products, as shown in Table 3.4. A survey of 46,000 people nationwide in 1992-1993 revealed that the infection rate of Clonorchis sinensis remained above 2 percent (Table 3.4). Infection rates among residents along major rivers have been exceptionally high, ranging from 3 percent along the Mankyung River (Song et al., 1983) to 41.2 percent along the Nam River (Bae, 1983). A recent study compares the infection rates among residents along the Nam River between 1984 and 1992. As shown in Table 3.5, the infection rates in the adult population remain high, although the rates among school children fell dramatically during the 8-year period. The persistently high rates reflect the Koreans’ raw fish diet, which is especially popular among riverside residents.

Table 3.4: Infection Rates of Intestinal Helminths: 1971-1993

unit: percent

Helminths

1971

1976

1981

1986

1993

Helminth egg positive rate

84.3

63.2

41.2

12.9

3.8

Clonorchis sinensis (Chinese liver fluke)

4.6

1.8

2.6

2.7

2.2

Source: Ministry of Health and Social Affairs, Report of the 5th National Survey on Parasite Infection, March 1993; and “Facts about Parasite Infection in Korea,” Journal of Korean Medical Association, Vol. 35(11), 1992.

Table 3.5: Prevalence of Clonorchis sinensis among Nam River Residents: 1984 and 1992

unit: percent


1984

1992

Adult residents

39.3

37.6

School children

24.4

9.7

Total

35.1

33.5

Source: Lee et al., 1993.

The role of government

Government policies in the Republic of Korea have supported general R&D promotion that could lead to the production of raw materials in medicine. Shin Poong, through joint research with KIST (Korea Institute of Science and Technology), has successfully developed new technologies for producing nine active ingredients of pharmaceutical products, including mebendazole, albendazole, ethoxybenzamide, and niclosamide. Praziquantel is one of the success cases. For praziquantel, Shin Poong carried out preliminary research for two and a half years, from 1979 to early 1981, to explore the potential of independent development. The government of the Republic of Korea then agreed with Shin Poong about the possibility of domestic praziquantel production, and in 1982 selected the project as a government-supported special R&D project. KIST was chosen as the principal investigator of the research project, using funds jointly financed by Shin Poong and the Korean government. The total amount of research funds for the project was 30 million Korean won (equivalent to US$ 41,000, 1982 value), with one third provided by Shin Poong and two thirds financed by government tax money.

Production and consumption

In 1983, KIST and Shin Poong succeeded in jointly developing a new production technology for synthesizing praziquantel. The new method differed from the Bayer-E. Merck process in a critical step, adopting a cyclization reaction that used concentrated hydrochloric acid in the last stage of synthesis, while the Bayer-E. Merck method required high pressure catalytic hydrogenation at high temperature. The new method was significantly less expensive, with important implications for production costs. In 1985, Shin Poong’s application for a process patent was approved by the Korea Patent Agency; the firm also obtained process patents in 12 other countries (Table 3.6).

Table 3.6: Shin Poong’s process patent registration for praziquantel

Country

Registration number

Registration date

Expiration date

Bangladesh

1,001,626

1985: 20 May

1999: 4 July

Germany

3,324,532

1986: 24 July

2003: 7 July

India

159,586

1987: 30 May

1991: 29 May

Italy

1,193,420


2004: 7 July

Japan

1,535,215

1989: 21 December

2004: 11 April

Pakistan

128,690

1985: 28 June

1999: 28 June

Peru

3,816

1986: 20 November

1996: 19 November

Republic of Korea

20,271

1985: 13 January

1997: 23 August

Taiwan

20,498

1984: 1 March

1998: 1 December

Thailand

768

1983: 8 July

1998: 8 July

United Kingdom

2,126,212

1986: 2 July

2004: 7 July

United States of America

4,497,952

1985: 5 February

2004: 4 February

Venezuela

46,981

1988: 10 November

1998: 10 November

Source: Shin Poong Pharmaceutical Company.

In 1983, Shin Poong’s praziquantel product was designated as a “Protected Medicine” by the Ministry of Health and Social Affairs of the Republic of Korea (the only one of Shin Poong’s products to receive this designation). This designation usually resulted in the regulation of imports and prohibition of other production, but no actions were taken on Biltricide, since Bayer was already importing and selling Biltricide in the Republic of Korea with government approval. But the designation did prevent other manufacturers from entering the praziquantel market, creating a duopoly for the period of protection (5 years, from 1983 to 1988). This policy was a government strategy to protect domestic producers from foreign and domestic competition, to promote local firms in developing alternative production processes for existing drugs, and to produce gains from import substitution. On 1 July 1987, the Republic of Korea agreed to adopt a product patent system, as a result of trade pressure from the United States of America. The Korean government also abolished the policy of “Protected Medicines,” which depended on a process patent system. Only those process patents filed before July 1987 are still protected until expiry.

Shin Poong’s development of a new praziquantel production technology contributed to a lowered consumer price in the Republic of Korea, as discussed below in more detail. The lower price resulted in increased accessibility by the 4 million people who needed the product, and thereby contributed to consumer surplus in the Republic of Korea.

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