CHAPTER I GENERAL PROVISIONS
The purpose of this Act is to contribute to the promotion of people's health and the development of the national economy by laying a foundation for the development of the pharmaceutical industry and by creating an environment to induce investment from foreign pharmaceutical enterprises' into the Republic of Korea through the systematic fostering and support of the pharmaceutical industry, the enhancement of innovativeness of the pharmaceutical industry, and the strengthening of international cooperation in order for the pharmaceutical industry to be internationally competitive.
The terms used in this Act shall be defined as follows:
| 1. | The term "pharmaceutical industry" means the industry related to research, development, manufacturing, processing, storage, and distribution of drugs under subparagraph 4 of Article 2 of the Pharmaceutical Affairs Act; |
| 2. | The term "pharmaceutical enterprise" means any of the following enterprises engaged in economic activities related to the pharmaceutical industry in the Republic of Korea: |
| 3. | The term "innovative pharmaceutical enterprise" means a pharmaceutical enterprise that falls under any of the following subparagraphs, certified by the Minister for Health and Welfare pursuant to Article 7: |
| (a) | A pharmaceutical enterprise whose investment in the research and development of new drugs reaches or exceeds the amount specified by Presidential Decree; |
| (b) | A foreign pharmaceutical enterprise whose record of investment in the research and development of new drugs reaches or exceeds the amount specified by Presidential Decree or that are conducting research and development of new drugs. |
| Article 3 (Responsibilities of Pharmaceutical Enterprises) |
| (1) | Pharmaceutical enterprises shall contribute to the establishment of a foundationfor the development of the pharmaceutical industry, the strengthening of its international competitiveness, and the promotion of people's health through the systematic development of the pharmaceutical industry, the enhancement of innovativeness, etc. |
| (2) | Pharmaceutical enterprises shall comply with standards for manufacturing and quality control of drugs and actively cooperate in improving systems for upgrading the quality of drugs. |
| (3) | Pharmaceutical enterprises shall prepare measures for eradicating frauds and corruption related to drugs and work together to raise the transparency of the pharmaceutical industry. |
CHAPTER II PLANS FOR FOSTERING AND SUPPORT OF PHARMACEUTICAL INDUSTRY
| Article 4 (Master Plans for Fostering and Support of Pharmaceutical Industry) |
| (1) | In order to facilitate the establishment of a foundation for the development of the pharmaceutical industry and the strengthening of international competitiveness, the Minister for Health and Welfare shall establish a master plan for the fostering and support of the pharmaceutical industry every five years (hereinafter referred to as "master plan"). |
| (2) | A master plan shall include the following matters: |
| 1. | Medium and long term goals for the fostering of the pharmaceutical industry; |
| 2. | A plan for the procurement and utilization of financial resources for investment necessary for fostering the pharmaceutical industry; |
| 3. | A plan for the development and efficient utilization of human resources necessary for fostering the pharmaceutical industry; |
| 4. | A plan for assisting the pharmaceutical industry in international cooperation and expansion to overseas markets; |
| 5. | A plan for assisting in the research and development of drugs and the licensing; |
| 6. | A plan for supporting innovative pharmaceutical enterprises; |
| 7. | A plan for assisting in the inducement of investment from foreign pharmaceutical enterprises in relation to their research and development of new drugs; |
| 8. | Other necessary matters regarding the fostering of the pharmaceutical industry. |
| (3) | When the Minister for Health and Welfare intends to establish a master plan, he/she shall consult with the heads of related central administration agencies thereon. |
| (4) | A master plan shall be finalized through deliberation by the Committee on the Fostering and Support of the Pharmaceutical Industry under Article 6. The same shall also apply to any intended revision of the master plan. |
| (5) | The Minister for Health and Welfare shall notify the heads of related central administration agencies of the finalized or revised master plan. |
| (6) | If the Minister for Health and Welfare deems it necessary for establishing a master plan, he/she may demand the head of a related agency to submit data necessary for the establishment of the master plan. |
| Article 5 (Implementation Plans for Fostering and Support of Pharmaceutical Industry) |
| (1) | To execute a master plan, the Minister for Health and Welfare shall establish and execute an implementation plan for the fostering and support of the pharmaceutical industry for each year (hereinafter referred to as "implementation plan") through consultation with the heads of related central administration agencies. In such cases, the Minister for Health and Welfare shall notify the heads of related central administration agencies of the established implementation plan. |
| (2) | The Minister for Health and Welfare and the head of each related central administration agency shall execute matters under each of their jurisdiction in an implementation plan and shall endeavor securing financial resources necessary therefor. |
| (3) | Matters necessary for the establishment and implementation of implementation plans shall be prescribed by Ordinance of the Ministry for Health and Welfare. |
| Article 6 (Committee on Fostering and Support of Pharmaceutical Industry) |
| (1) | The Minister for Health and Welfare shall establish a Committee on the Fostering and Support of the Pharmaceutical industry (hereinafter referred to as the "Committee") to deliberate on the following matters: |
| 1. | Matters regarding the establishment and implementationof master plans and implementation plans; |
| 2. | Matters regarding the certification of innovative pharmaceutical enterprises and the revocation of such certification; |
| 3. | Other matters specified by Presidential Decree in regard to the fostering and support of the pharmaceutical industry. |
| (2) | The Committee shall be comprised of not less than 15 members, including one chairperson, and the Minister for Health and Welfare shall serve as the committee chairperson, while committee members shall be commissioned by the Minister for Health and Welfare from among Vice Ministers or equivalent public officials commissioned by the heads of related central administration agencies, including the Ministry of Strategy and Finance, the Ministry of Education, Science and Technology, and the Ministry of Knowledge Economy, and persons who work in industrial fields, academic circles, research institutes, etc. with sound expertise and experience in the fostering of the pharmaceutical industry. |
| (3) | The Committee may establish a working committee for the fostering and support of the pharmaceutical industry (hereinafter referred to as "working committee") toefficiently carry out its business affairs. In such cases, the person in charge of policies on the public health industry in the Ministry of Strategy and Finance shall serve as the chairperson of the working committee. |
| (4) | Except as otherwise provided for in paragraphs (1) through (3), matters necessary for the composition, operation, etc. of the Committee and the working committee shall be prescribed by Presidential Decree. |
CHAPTER III CERTIFICATION, ETC. OF INNOVATIVE PHARMACEUTICAL ENTERPRISES
| Article 7 (Certification of Innovative Pharmaceutical Industry) |
| (1) | A pharmaceutical enterprise that intends to be certified as an innovative pharmaceutical enterprise shall file an application with the Minister for Health and Welfare for the certification of an innovative pharmaceutical enterprise, as prescribed by Ordinance of the Ministry for Health and Welfare. |
| (2) | In receipt of an application under Article (1), the Minister for Health and Welfare may certify the applicant as an innovative pharmaceutical enterprise through deliberation by the Committee. In such cases, standards necessary for the certification shall be prescribed by Presidential Decree. |
| (3) | Matters necessary for methods and procedures for certification, and the public notification of such certification shall be prescribed by Ordinance of the Ministry for Health and Welfare. |
| Article 8 (Effective Period of Certification) |
| (1) | The effective period of certification under Article 7 (2) shall be three years from the date of certification. |
| (2) | The effective period of certification may be extended through re-evaluation for every three years from the initial certification. |
| (3) | Matters necessary for an application for the extension of certification under paragraph (2) shall be prescribed by Ordinance of the Ministry for Health and Welfare. |
| Article 9 (Revocation of Certification) |
| (1) | If an enterprise certified as an innovative pharmaceutical enterprise under Article 7 (2) falls under any of the following subparagraphs, the Minister for Health and Welfare may revoke the certification, as prescribed by Ordinance of the Ministry for Health and Welfare: Provided, That the certification shall be revoked if such enterprise falls under subparagraph 1: |
| 1. | If an enterprise obtains certification by deceit or other fraudulent means; |
| 2. | If an enterprise fails to meet a certification standard. |
| (2) | The Minister for Health and Welfare shall not certify a pharmaceutical enterprise whose certification is revoked under paragraph (1) 1, unless and until three years have passed since the date of revocation. |
| (3) | The Government may revoke various privileges granted under Articles 13 through 17 to a pharmaceutical enterprise whose certification is revoked under paragraph (1). |
| Article 10 (Provision of Data) |
| (1) | Where the Minister for Health and Welfare demands an enterprise that files an application for certification of an innovative pharmaceutical enterprise or an innovative pharmaceutical enterprise to provide data necessary for certification, revocation of certification, or other affairs, such enterprise shall comply with such demand. |
| (2) | Necessary matters regarding the extent of data to be demanded and the procedure for making such demand under paragraph (1) shall be prescribed by Ordinance of the Ministry for Health and Welfare. |
If the Minister for Health and Welfare intends to revoke certification under Article 9 (1), he/she shall hold a hearing.
| Article 12 (Categorization of Innovative Pharmaceutical Enterprises) |
| (1) | Categories of innovative pharmaceutical enterprises shall be prescribed by Presidential Decree within limits defined under subparagraph 3 of Article 2. |
| (2) | The Government may vary the method and scale of support to each category of innovative pharmaceutical enterprises under paragraph (1), as prescribed by Ordinance of the Ministry for Health and Welfare. |
| Article 13 (Assistance to Innovative Pharmaceutical Enterprises) |
To foster the pharmaceutical industry, the Government may assist innovative pharmaceutical enterprises in the research and development of new drugs and the improvement of facilities for the research and manufacturing of new drugs as necessary.
CHAPTER IV SUPPORT OF INNOVATIVE PHARMACEUTICAL ENTERPRISES
| Article 14 (Preferential Treatment to National Research and Development Projects, etc.) |
| (1) | The State or a local government may authorize innovative pharmaceutical enterprises to preferentially participate in national research and development projects, etc. in connection with the research and development of new drugs. |
| (2) | Matters necessary formethods, procedures, etc. for preferential participation under paragraph (1) shall be prescribed by Ordinance of the Ministry for Health and Welfare. |
| Article 15 (Special Cases in Taxation) |
| (1) | If the State or a local government finds it necessary to support and foster the pharmaceutical industry, it may fully or partially exempt innovative pharmaceutical enterprises from taxes, such as corporate tax, income tax, acquisition tax, registration and license tax, and property tax, as provided by the Restriction of Special Taxation Act, the Restriction of Special Local Taxation Act, and other Acts relevant to taxation. |
| (2) | Where an innovative pharmaceutical enterprise receives consideration for technology that it has developed and transferred to someone else, the State or a local government may fully or partially exempt it from corporate tax and resident tax, as provided by the Corporate Tax Act and the Restriction of Special Local Taxation Act. |
| (3) | When a merger, division, or division and merger in which an innovative pharmaceutical enterprise participates as a party takes place, the State or a local government may fully or partially exempt it from the registration tax on the registration of real estate, etc., the corporate tax on gains on the liquidation of the pharmaceutical enterprise disappearing as a consequence of the merger, and the income tax, corporate tax, or other taxes on constructive dividends to shareholders of the pharmaceutical enterprise disappearing as a consequence of the merger, as provided by the Restriction of Special Local Taxation Act and other Acts relevant to taxation. |
| Article 16 (Special Cases in Construction of Research Facilities) |
| (1) | An innovative pharmaceutical enterprise may build research facilities (including facilities recognized as those for ancillary purposes specified by Presidential Decree, such as facilities for the production of trial products) in an area publicly notified by the Minister for Health and Welfare among the areas provided for in Article 36 of the National Land Planning and Utilization Act (excluding areas specified by Presidential Decree, such as conserved green belts and green belts for production). |
| (2) | Matters necessary for procedures for public notification under paragraph (1) shall be prescribed by Presidential Decree. |
[This Article shall be effective and enforceable until March 30, 2022 under Article 2 of the Addenda to Act No. 10519 (Mar. 30, 2011)]
| Article 17 (Exemption from Various Charges and Costs) |
Research facilities of an innovative pharmaceutical enterprise may be fully or partially exempted from the following charges and costs:
[This Article shall be effective and enforceable until March 30, 2022 under Article 2 of the Addenda to Act No. 10519 (Mar. 30, 2011)]
CHAPTER V RESEARCH AND DEVELOPMENT OF PHARMACEUTICAL ENTERPRISES
| Article 18 (Expansion of Investment in Research and Development) |
The State and each local government shall actively endeavor to expand investment in research and development by innovative pharmaceutical enterprises and to attract investment in the Republic of Korea in connection with the research and development of new drugs by foreign pharmaceutical enterprises.
| Article 19 (Collection and Diffusion of Information about Research and Development) |
| (1) | To efficiently facilitate research and development by the pharmaceutical industry, the Minister for Health and Welfare shall collect and investigate information domestically and overseas, about the research and development of new drugs including trends in research and development in Korea and foreign countries and market trends and shall manage and diffuse such information systematically and comprehensively. |
| (2) | The Minister for Health and Welfare may designate an institution specializing in the management of information about the research and development of new drugs to authorize it to perform the work under paragraph (1). |
| (3) | Necessary matters regarding requirements and procedure for the designation of an institution specializing in the management of information about the research and development of new drugs under paragraph (2) shall be prescribed by Ordinance of the Ministry for Health and Welfare. |
| Article 20 (Awards for Improvement of Productivity of Research and Development) |
| (1) | The Minister for Health and Welfare may select and award pharmaceutical enterprises that have contributed to the promotion of public health and the development of the pharmaceutical industry by developing and distributing good drugs, and may render assistance to them as necessary. |
| (2) | Necessary matters regarding awards and assistance under paragraph (1) shall be prescribed by Ordinance of the Ministry for Health and Welfare. |
| Article 21 (Assistance to Pharmaceutical Industry in Activities for International Cooperation) |
When a pharmaceutical enterprise or a related organization conducts activities for industrial cooperation with a foreign institution or organization, the Minister for Health and Welfare may assist it by collecting and providing relevant information as necessary.
| Article 22 (Entrustment of Authority) |
The Minister for Health and Welfare may entrust an appropriate specialized institution with part of affairs under this Act, as prescribed by Presidential Decree.
ADDENDA
Article 1 (Enforcement Date)
This Act shall enter into force one year after the date of its promulgation.
Article 2 (Effective Period)
Articles 16 and 17 shall be effective and enforceable for ten years after this Act enters into force. Article 3 (Special Exception to Expiration of Effective Period)
| (1) | As to cases where a building permit is granted or a building report is filed under Article 16 before the effective period under Article 16 ends, Article 16 shall remain effective and enforceable even after the effective period under Article 16 expires. |
| (2) | As to research facilities eligible for exemption from charges under Article 17 when the effective period under Article 17 expires, Article 17 shall remain effective and enforceable even after the effective period under Article 17 expires. |