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
 

Price changes of praziquantel in the Republic of Korea

Shin Poong’s Distocide was first introduced into the Korean market in August 1983, about one year after Bayer’s Biltricide. Shin Poong’s 8-tablet pack (600 mg/tablet) of Distocide was initially priced at 20,000 won (2,500 won/tablet), which was considerably below the price of 30,000 won (3,750 won/tablet) for Bayer’s product (Table 3.12). Between 1983 and 1994, the nominal price for the same pack of Distocide increased by 10 percent to 22,000 won (2,750 won/tablet). However, the inflation-adjusted real price has declined by almost 40 percent, to 12,644 won (1,580 won/tablet). The price decline is even more dramatic in the case of Bayer’s Biltricide. Both the nominal price and the real price of Biltricide pack in local currency have decreased remarkably, by 33 percent and 62 percent, respectively.

Table 3.12: Change in retail price of praziquantel products: 1983 and 1994

price per 600 mg. tablet

Product

Type of price

1983

1994

Shin Poong Distocide

nominal

2,500 won
US$ 3.22

2,750 won
US$ 3.53


real

2,500 won
US$ 3.22

1,580 won
US$ 2.03

Bayer Biltricide

nominal

3,750 won
US$ 4.83

2,500 won
US$ 3.20


real

3,750 won
US$ 4.83

1,437 won
US$ 1.84

Source: Shin Poong Pharmaceutical Company.

Note: The real price is the inflation adjusted price (using the consumer price index), with 1983=100 and 1994=174. Exchange rates used are: US$ 1=776 won for 1983, and US$ 1=780 won for 1994. The prices are based on the purchase of 8-tablet packs of the two products (600 mg/tablet).

Several market factors combined to produce the price decline in praziquantel products in the Republic of Korea:

• First, it is evident from market signals that price competition between Shin Poong and Bayer is probably the prime reason for the significant price decline for praziquantel. It is also possible that as Shin Poong emerged as the dominant producer for praziquantel, demand shifted from Bayer to Shin Poong; the drop in demand for Bayer’s product could have forced a further decline in price. Dae-woong Pharmaceutical Company’s entry into the praziquantel market in 1993 could cause further reductions in the price of praziquantel products, due to heightened competition, if Dae-woong survives in the praziquantel market.

• Second, the price decline in praziquantel products resulted also from increases in production volume (in the supply side), which was accelerated by Shin Poong’s acquisition of a process patent for praziquantel.

• Third, a demand force (i.e., lowered demand) may have contributed to price declines for praziquantel in the Korean market. As shown in Tables 3.4 and 3.5, between 1986 and 1993 the helminth egg positive rate declined from 12.9% to 3.8%, and the prevalence of Clonorchis sinensis declined from 24.4% to 9.7% in school children from 1984 to 1992.

Both demand and supply forces thus worked together to promote praziquantel price declines in the Korean market. The impact of supply factors may have been more important than demand factors. This conjecture is supported by the market signals that the lower price has been accompanied by greater volumes of praziquantel consumption and export over time.

Conclusion

The development and sale of praziquantel in the Republic of Korea, by the Shin Poong Pharmaceutical Company, resulted in significant benefits for the Korean people and for people in other countries, as well as substantial returns for Shin Poong. The firm’s success in the domestic and international markets for praziquantel depended on three policies adopted by the Korean government: 1) the lack of product patent protection and provision only of process patent protection for pharmaceutical products; 2) the promotion of R&D, through public-private collaboration, to develop alternative production processes for important pharmaceutical products; and 3) the ability to designate some products as “protected medicines” and restrict both foreign and domestic competition. But these were primarily enabling conditions. The success story of praziquantel in the Republic of Korea could not have been achieved without Shin Poong’s recognition of the potential of praziquantel and its vigorous efforts to pursue the product’s development and sales in domestic and international markets.

to previous section
to next section
 
 
The WHO Essential Medicines and Health Products Information Portal was designed and is maintained by Human Info NGO. Last updated: March 20, 2014