ITA CODE:  PR MED

Overview

    Medical Device Market Overview - By Year  (Unit: $1 million)

 Source: MFDS (Ministry of Food and Drug Safety)

According to the Ministry of Food and Drug Safety (MFDS), medical device production in South Korea has been growing at an annual average rate of 9.8 percent over the past five years, which is approximately five times higher than Korea’s real gross domestic product (GDP) growth rate of 2 percent in 2019. Compared to the previous year, imports and exports also increased by 8.9 percent and 13.3 percent respectively, indicating that the domestic medical device industry is growing in overall production, export, and import. The imports from the U.S. has also been steadily increased from approximately $1.4 billion in 2015 to $1.9 billion in 2019 with an average annual growth rate of 9 percent.

Among the top imported medical devices in 2019, the daily-wear soft contact lenses ranked first ($151 million), followed by full-body CT system ($99 million); full-body MRI system ($98 million); coronary artery stent ($92 million); and multifocal intraocular lens ($89 million). In addition, the growth rate for the imports of multifocal intraocular lenses was the highest at 73.8 percent among other imported items, which reflects the impact of social aging in South Korea, such as the steadily increasing number of cataract surgery patients. The ratio of local production to imports has been steady at less than 40 percent over the past decade.

Approximately 80 percent of South Korean medical device manufacturers are small and medium-sized enterprises (SMEs) with less than $1 million in revenue. South Korea’s medical devices are classified into the four categorical levels according to the product’s purpose and the degree of potential risk. As of 2019, approximately 70 percent of Korean medical device manufacturers are producing relatively low-risk medical devices (level 1 and 2).

In other words, South Korean companies make comparatively lower-end (mid-technology) medical devices. Therefore, market demand for high-end medical devices relies on imports. Among the list of importing countries in 2019, the U.S. consists of approximately 40 percent of total imports, followed by Germany (15 percent), Japan (8 percent), Switzerland (4 percent) and China (3 percent).

  The List of Top 5 Imports for Medical Device Products - By Year

      (Unit: $1 thousand)

Source: MFDS (Ministry of Food and Drug Safety)

Sub-Sector Best Prospects

• Soft contact lenses
• CT systems
• MRI devices
• Coronary artery stent
• Multifocal intraocular lens
• Disposable dialyser
• Reagents for clinical Immunochemistry
• Internal knee prosthesis
• Sight corrective ophthalmic lenses
• Regulatory Environment 

U.S. medical device manufacturers should follow Korean government pricing and reimbursement policies as the country grapples with cost containment under its national healthcare system.

The importation of medical devices requires the assignment of an importer or representative based in South Korea to manage medical device approvals and to ensure regulatory compliance. As part of pre-market approval requirements, the Government of Korea requires testing reports on safety and efficacy. In addition to medical device approvals, companies need to negotiate pricing terms with the Korean Health Insurance Review and Assessment Service (HIRA).

Current issues facing the medical device industry in South Korea include reimbursement pricing governed by the National Health Insurance (NHI), the new healthcare technology assessment system for medical devices, and the new regulation requiring devices to be registered every 5 years, which takes effect in 2025.   

With the implementation of the KORUS FTA, U.S. medical device and pharmaceutical companies can now request a review of government pricing and maximum reimbursement determinations for its products through an Independent Review Process. Established to regulate medical devices and drug prices, this review process is independent of the Ministry of Health and Welfare (MoHW), the National Health Insurance Service (NHIS), and the Health Insurance Review and Assessment Service (HIRA). 

Opportunities

According to the report by Korea Health Industry Development Institute (KHIDI), general hospitals in Korea displayed a clear tendency to prefer foreign medical devices over domestic medical devices with the ratio of 19.9:80.1. The result of survey shows that this is due to domestic medical devices’ lack of product performance (28.0 percent), brand reliability (20.0 percent), and lack of clinical verification data (15.5 percent). Therefore, U.S. companies may find their business opportunities at South Korea’s advanced medical device market.

The market prospect for Korea’s advanced medical device market also includes innovative medical device based on advanced technology convergence such as information and communication technology (ICT), robot technology (RT), and biotechnology (BT). In particular, it is notable that the market for Artificial Intelligence-based (AI) medical device software is growing in Korea. According to the Ministry of Food and Drug Safety (MFDS), the market size for AI-based medical device software was approximately $41 million in 2018 and approximately $55.5 million in 2019, with an annual average growth rate of nearly 45 percent. It is expected to record approximately $244.5 million in 2023.

In addition, an opportunity to highlight the potential for U.S. companies is via clinical trials in Korea. Korean government is interested in developing a more robust clinical trial environment for medical devices and pharmaceuticals. U.S. companies that require clinical trials for their medical devices and are interested in accessing Korea’s excellent hospital networks and physicians can contact the Medical Device Policy Division of the Ministry of Food and Drug Safety through their local importer.   

Resources

Trade Shows

KOREA Hospital Innovation & Medical Equipment Exhibition & Conference

Key Contacts

• Ministry of Health and Welfare (MoHW)
• Ministry of Food and Drug Safety (MFDS)
• Health Insurance Review and Assessment Service (HIRA)
• Korea Medical Devices Industry Association (KMDIA)
• National Evidence-based Healthcare Collaborating Agency (NECA)

Local Contact

Mr. Joonho Yoon
Commercial Specialist      
U.S. Commercial Service, Korea
U.S. Embassy Seoul
188 Sejong-daero, Jongno-gu
Seoul 03141, Korea
Tel:  82-2-397-4439

Joonho.Yoon@trade.gov
https://www.trade.gov/south-korea