Advanced Guide to Entering the Korean Market (Part I): Regulatory Framework and Market Entry Strategy for Medical Products
In 2024, VCBeat will launch the China Healthcare Global Expansion Practice Camp, an immersive overseas study tour combined with on-the-ground consulting services for healthcare companies with innovative medical products and market expansion intentions. The Practice Camp will visit overseas markets including Indonesia, Russia, Brazil, South Korea, and Japan, helping healthcare enterprises match with corresponding resources. This session focuses on South Korea, a developed, highly regulated, high-margin, and undervalued blue-ocean healthcare market. VCBeat will partner with VentureBlick and Wanchuang Puli to leverage scarce resources within South Korea’s healthcare industry, facilitating efficient market entry for participating companies.
Chris Lee (Li Xilie), the founder of VentureBlick, is a Korean multinational healthcare executive who spent a significant portion of his career in the Chinese market. In this issue, he shares insights on the regulation and market access of South Korea’s healthcare sector, while the next issue will continue with a discussion on sales and market penetration in South Korea’s healthcare industry.
South Korea's Healthcare Market Regulation
South Korea’s regulatory approval requirements for medical and health products are highly aligned with those of markets such as the United States and Japan. Precisely because South Korea places a strong emphasis on regulating the safety and efficacy of medical products, the high entry barriers serve as an advantage for the products and companies that successfully enter the market. On one hand, these entities become well-versed in the regulatory frameworks of more advanced markets, bringing their compliance practices closer to global industry standards. On the other hand, their products and brands gain greater international recognition and reach new heights through feedback from sophisticated users.
Given the significant barriers to entry, why not directly target the United States and Japan? Entering these globally most advanced markets head-on—where products and companies lacking international operational experience must compete against the world’s strongest rivals—poses a comprehensive test of capabilities in resource allocation, cross-border management, and risk control, potentially severely hindering corporate growth.
South Korea’s industry resources are highly concentrated, its regulatory standards are globally recognized, its market size is among the largest in the world, and its profit margins are clearly discernible. As a proving ground before engaging in top-tier competition, the costs and risks of entering the Korean market are relatively easier to control, and success there can significantly enhance credibility and recognition in developed markets.
The Ministry of Food and Drug Safety (MFDS) of South Korea, commonly referred to as the KFDA in parallel comparisons, serves as the core of South Korea’s medical regulatory system. It is responsible for the regulation and approval of all medical and health products in the South Korean market, including product registration approvals, regulatory formulation, and license issuance.
As the “paternalistic” guardian of medical regulation, just how meticulous is the MFDS? We have taken the liberty of exploring its resources on your behalf. Want to know the classification code for your device product? The MFDS publishes updated overviews of registered medical device classifications on its official website, complete with examples, descriptions, and classification codes. Curious about which products requiring clinical data submissions have higher approval rates? The information is available on the MFDS website! Want to know the ratio of domestically produced to imported endocrine testing IVD reagents approved last year? The MFDS website has it! Interested in the approval process and responsible agencies for generic drugs? The MFDS website provides these details! Need to know the documentation requirements and review timelines for Class III medical device registration? The MFDS website covers that as well! …
In summary, to gain a comprehensive and up-to-date understanding of the regulatory requirements for introducing healthcare products into the South Korean market, as well as to estimate processing timelines and associated costs, you can independently research and prepare by consulting the official website of the Ministry of Food and Drug Safety (MFDS). The MFDS website provides detailed regulatory guidelines in both English and Korean across four major sectors: pharmaceuticals, medical devices, biologics and cosmetics, and food. Based on your specific product profile, you can review currently enforced regulations, approval procedures, and detailed annual reports of approved imported and domestically manufactured products within your respective category.
Take a closer look, and you will find that in many categories, the number of approved imported products is comparable to, or even exceeds, that of domestic products. It is often said that South Korea’s medical regulatory system is open and transparent, applying equal regulatory policies to both imported and domestic products—this claim indeed holds true!
Furthermore, it is advisable for medical technology enterprises to join organizations such as the Korea Medical Devices Industry Association (KMDIA). On one hand, KMDIA is the largest industry association for medical technology in South Korea, with nearly 1,000 member units including manufacturers and importers, making it a key partner for market entry. On the other hand, the Ministry of Food and Drug Safety (MFDS) collaborates with KMDIA and similar organizations to carry out industry promotion activities, providing policy training and facilitating connections with industry resources. This serves as an effective channel for engaging with regulatory core stakeholders and conveying collective industry voices.
Market Access for Medical Products in South Korea
Before initiating the actual market access process, we recommend that companies consult with Korean market access experts regarding the products they intend to export to Korea, in order to understand the feasible scope and optimal strategies for specific technical fields and product categories.
The MFDS website also clearly outlines the procedures for product registration in South Korea. The registration requirements are primarily designed to ensure that product quality and safety comply with South Korea’s Good Manufacturing Practice (KGMP) standards and to establish accountability for post-market usage records within the country.
In cases where the product registration process requires the submission of clinical data, having existing FDA or CE certification can help expedite this step by leveraging the clinical data submitted for those approvals. In particular, clinical data recognized by the FDA may directly exempt the product from conducting clinical trials in South Korea.
Next is the reimbursement application. The government reimbursement rate for medical care in South Korea averages 80%, with the remaining 20% covered by out-of-pocket payments. The Ministry of Food and Drug Safety (MFDS) also stipulates pricing and reimbursement rates for existing medical products by category; both imported and domestically produced products are subject to equal pricing and reimbursement policies. Chinese products can apply for reimbursement based on the rates applicable to similar products, ensuring fully predictable profit margins. For novel products, applications should be submitted after consulting with relevant experts.
For all categories of medical devices and equipment, the Ministry of Food and Drug Safety (MFDS) requires overseas manufacturers that wish to sell their products in South Korea but do not have a physical business address in the country to designate a Korea License Holder (KLH). The KLH is responsible for carrying out product registration and Korean Good Manufacturing Practice (KGMP) certification procedures with the MFDS, as well as fulfilling various post-market surveillance obligations, including reimbursement listing, periodic reporting such as import records, and label compliance. As the representative of imported medical devices in South Korea, the KLH will be listed on the MFDS’s product approval certificate.
Companies wishing to export medical device products to South Korea must designate a Korean License Holder (KLH) prior to initiating the product registration and approval process. Who is eligible to serve in this critical role? What factors should be considered when selecting a KLH?
In accordance with the MFDS prerequisites for the Korean License Holder (KLH), companies exporting medical devices to South Korea may designate a KLH through three methods:
Designate KLH as the South Korean importer,
Designate the Korean product registration agent as KLH,
Established a subsidiary in South Korea and registered it as KLH.
If the first option is chosen, designating a Korean importer as the KLH (Korean License Holder), it is essential to assess in advance the flexibility for adding or replacing other import distributors in the future. Under the second option, product registration agents typically offer advantages such as unrestricted allocation of import distributors and more diligent compliance support, but they lack local sales resources.
Additionally, the Korean License Holder (KLH) must hold a Korea Good Manufacturing Practice (KGMP) license specific to the represented device class and is responsible for submitting KGMP certification applications to the Ministry of Food and Drug Safety (MFDS) for Class II, III, and IV devices (Class I devices are exempt). KGMP certification is tied to the designated KLH; therefore, if the KLH is changed, the KGMP certificate must be updated.
It should be noted that the registration of medical device products under a KLH does not expire. A single imported product may have multiple KLHs or undergo KLH replacement/transfer; however, each KLH must independently complete the product registration process. Given that it may not always be possible to obtain all technical documentation required for registration from the original KLH, it is generally more practical for the new KLH to re-register the product rather than pursue a replacement or transfer.
