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South Korea's Healthcare Industry in 2025: Current Performance, Innovation Trends, and Future Outlook

General Report May 9, 2025
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TABLE OF CONTENTS

  1. Summary
  2. Market Performance and Segmentation
  3. Industry Innovation and Technology Trends
  4. Future Outlook and Strategic Growth
  5. Conclusion

1. Summary

  • As of May 9, 2025, South Korea's healthcare industry presents a complex landscape characterized by short-term fluctuations and promising long-term growth trajectories. In 2023, total bio-health sales saw a slight decline of 0.7%, equating to 133 trillion won (approximately $93.3 billion), primarily due to a significant downturn in the medical device sector, which experienced a 15.7% drop, leading to sales of 37.9 trillion won. Meanwhile, the pharmaceutical segment demonstrated notable resilience, rising by 6.1% to reach 53.8 trillion won, while the cosmetics sector also showed strength with a 7.9% increase, bringing its total to 42 trillion won. This mixed performance highlights the ongoing strength of pharmaceuticals and cosmetics despite challenges within the medical devices market during this period. Concurrently, investment in research and development (R&D) surged, increasing by 18.5%, with nearly 28.6% of bio-health companies initiating strategies for overseas expansion, indicating a pivot towards global markets.

  • Ongoing developments have seen the South Korean health industry export growth flourish, with a significant 15.8% year-on-year increase in 2024, totaling $25.26 billion. Biopharmaceutical products led this surge, with exports reaching $5.51 billion, approximately 60% of the total pharmaceutical exports, primarily driven by rising demand in North America and Europe. Cosmetic exports also thrived, rising to $10.18 billion, reflecting a 20.3% increase from the previous year. Despite a perceived decline in the Chinese market, there was a reciprocating rise in exports to the U.S. and Japan, underscoring a shift towards more diversified international markets. Furthermore, the disposable medical supplies segment is projected to grow substantially, from a valuation of roughly $10.37 billion in 2023 to an anticipated USD 17.48 billion by 2032, achieving a compound annual growth rate (CAGR) of 5.96% spurred by an aging population and increasing chronic disease prevalence.

  • Highlighting South Korea's commitment to innovation, the ongoing Bio Korea 2025 trade fair, which commenced on May 7, 2025, serves as a crucial platform showcasing advancements in healthcare technology, particularly artificial intelligence. With around 750 companies participating, the fair underscores the global effort towards collaboration and innovation necessary to propel the biohealth sector. Additionally, as South Korea sets its sights on achieving an 8th global ranking in biohealth by 2030, rising from its current 11th spot, strategic adaptations leveraging cutting-edge technologies such as AI, big data, and digital health solutions will be vital in redefining its competitive edge within the global healthcare landscape.

2. Market Performance and Segmentation

  • 2-1. 2023 bio-health sales performance

  • In 2023, South Korea's bio-health industry experienced a marginal decline of 0.7% in total sales, amounting to 133 trillion won (approximately $93.3 billion). This decline was primarily driven by a downturn in the medical device sector, which recorded a significant drop of 15.7%, resulting in sales of 37.9 trillion won. Notably, the pharmaceutical segment countered this trend, rising by 6.1% to reach 53.8 trillion won, and the cosmetics sector also demonstrated resilience with a 7.9% increase, totaling 42 trillion won. This mixed performance underscores the growing strength of pharmaceuticals and cosmetics amidst challenges faced by medical devices in the market during this period.

  • Concurrently, research and development (R&D) spending in the bio-health industry surged by 18.5%, indicating a robust investment in innovation. By the end of 2023, 28.6% of bio-health companies had commenced overseas expansion initiatives, reflecting a strategic pivot towards international markets.

  • 2-2. 2024 health exports growth

  • In 2024, exports from South Korea's health industry surged by 15.8% year-on-year, reaching a total of $25.26 billion. This growth was primarily propelled by biopharmaceutical shipments, which saw remarkable increases particularly to North America and Europe. Biopharmaceutical exports specifically achieved significant milestones, accounting for $5.51 billion and representing nearly 60% of total pharmaceutical exports, and were instrumental in driving the overall performance of the health export sector.

  • Cosmetic exports also played a vital role, with total figures hitting $10.18 billion, reflecting a 20.3% increase compared to the previous year. This included historical highs for various categories within cosmetics, amid a noted decline in the Chinese market yet an increase in exports to the U.S. and Japan. These results signify a continuing trend towards diversification and increased reliance on global markets, particularly in pharmaceuticals and cosmetics, which have established strong footholds.

  • 2-3. Disposable medical supplies market trends

  • The disposable medical supplies market in South Korea was valued at approximately USD 10.37 billion in 2023 and is projected to experience a sustained growth trajectory, anticipated to reach USD 17.48 billion by 2032, with a compound annual growth rate (CAGR) of 5.96% during the forecast period. This growth is largely attributed to the aging population and rising prevalence of chronic diseases, which have increased the demand for single-use medical products to uphold standards of patient safety and infection control.

  • The COVID-19 pandemic further reinforced the importance of disposable medical supplies, as healthcare providers and institutions shifted focus towards infection prevention and hygiene standards. Moreover, innovations in product design and manufacturing technology have led to the creation of more efficient and environmentally sustainable options, catering to an increasing demand for high-quality medical disposables. Government initiatives aimed at enhancing healthcare infrastructure and supporting the use of single-use items are expected to continue driving market growth in the coming years.

3. Industry Innovation and Technology Trends

  • 3-1. Highlights of Bio Korea 2025 trade fair

  • Bio Korea 2025, South Korea's largest health and pharmaceutical industry trade fair, commenced on May 7, 2025, at the Convention and Exhibition Center (COEX) in Seoul. This year marks the 20th edition of the event, which brings together approximately 750 companies from around the world. The theme of this year's fair is 'Innovation and Cooperation, Shaping the Future Together, ' emphasizing the collaborative spirit required to propel the biohealth sector forward. Over the span of three days, approximately 30, 000 visitors are expected to engage with 429 booths managed by 323 companies, showcasing the latest advancements in biohealth technologies. The event notably highlights advancements driven by artificial intelligence (AI), showcasing how this technology is reshaping drug development processes and other key areas in healthcare. Major global players in the biopharmaceutical sector, including Johnson & Johnson, Novo Nordisk, and Merck Sharp & Dohme, are participating in a business partnering program, further bridging advancements in technology with commercial opportunities. The South Korean government is demonstrating its commitment to positioning the country as a global biohealth hub, offering substantial support of 1 trillion won (approximately $721 million) dedicated to R&D initiatives aimed at fostering innovation and enhancing regulatory frameworks.

  • 3-2. AI-driven pharmaceutical innovation

  • The integration of AI technology into pharmaceutical development is heralding a new era of innovation in the industry. As of May 2025, AI applications are under extensive exploration in various stages of the pharmaceutical pipeline, ranging from early drug discovery through to clinical trials and post-market surveillance. Traditionally, drug development has been a lengthy, costly endeavor, with estimates suggesting that the process can span over a decade and cost upwards of $2.6 billion. However, AI is changing these dynamics significantly. By leveraging vast datasets—encompassing genetic information, chemical structures, clinical literature, and patient records—AI algorithms can accurately predict potential drug candidates' behavior, efficacy, and safety. This transformative potential particularly shines in drug discovery, where AI models are streamlining processes, thereby reducing timelines by up to 60% and enhancing success rates at early stages. Leading global startups are at the forefront of this disruption, with companies such as Insilico Medicine, BenevolentAI, and Exscientia pioneering these advanced methods. Institutions like Harvard University are also contributing to this revolution, developing advanced AI tools that cover the entire spectrum from drug repurposing to the design of new molecules, consequently reducing uncertainty and costs. These advancements not only promise quicker access to essential medications but also improve the precision of the entire drug development process. Moreover, as the pharmaceutical landscape evolves, the industry faces challenges, including the need for high-quality data, ensuring regulatory compliance, and addressing ethical considerations related to AI utilization. The potential for AI in pharma continues to grow, with the market projected to expand significantly in the coming years.

4. Future Outlook and Strategic Growth

  • 4-1. Biohealth industry global ranking by 2030

  • According to recent projections from the Korea Health Industry Development Institute (KHIDI), South Korea's biohealth industry is on track to achieve a remarkable global ranking by 2030. Currently positioned 11th globally, it is expected to rise to 8th place, driven by a robust annual growth rate of nearly 9%, with market value anticipated to reach $370.3 billion by the end of the decade. This upward trajectory signifies not only a projection of increased economic output but also emphasizes the country's strategic commitment to advancing in the biohealth sector, which encompasses pharmaceuticals, medical devices, and healthcare services. The integration of cutting-edge technologies—namely artificial intelligence, big data analytics, and digital therapeutics—will be pivotal in propelling this growth. By enhancing the efficiency and effectiveness of research and development processes, South Korea aims to leverage these technologies to innovate and compete more aggressively on the world stage. As noted, the global biohealth industry itself is projected to grow only moderately at about 5.3% annually. Hence, South Korea's ambitious growth projections position it as a formidable player in a competitive international landscape.

  • 4-2. Long-term market growth projections

  • Looking beyond 2025, the long-term market growth projections for South Korea's biohealth sector are highly optimistic, reflecting both domestic strategy and global trends. The sector's expansion aligns with significant shifts in healthcare demand, particularly as aging populations around the world increasingly require advanced medical solutions. The compound annual growth rate (CAGR) within the region is expected to maintain a strong position, particularly in segments like biopharmaceuticals and medical supplies, with some markets forecasted to achieve double-digit growth rates through 2032. Beyond revenue growth, these projections indicate a broader strategic emphasis on innovation and sustainability within South Korea's healthcare frameworks. As policies evolve to support local industries, including incentives for R&D, the nation's healthcare landscape is predicted to adapt effectively to emerging global health needs. By fostering a culture of innovation and collaboration, South Korea is poised to enhance its export potential and overall market competitiveness in the biohealth space. In summary, as of May 9, 2025, the forthcoming initiatives and projects reflect South Korea's commitment to its strategic growth in the biohealth sector, with a clear vision aimed at utilizing technological advancements to meet future healthcare challenges efficiently.

Conclusion

  • In conclusion, South Korea's healthcare industry, as of May 9, 2025, showcases a unique blend of resilience amidst short-term challenges while laying the groundwork for future advancements. Export performance coupled with heightened R&D investments indicates a stable near-term outlook for the sector. The Bio Korea 2025 trade fair exemplifies a strategic shift towards embracing AI technologies in drug development, reflecting a broader trend of digital transformation across healthcare. The adoption of AI stands to not only enhance drug development timelines and success rates but also drive significant efficiencies throughout the healthcare system.

  • Looking ahead, the ambitious target to achieve an 8th place global standing in biohealth by 2030 is realistic, contingent upon sustained innovation, supportive policies, and active international collaboration. Critical to this endeavor will be the continued emphasis on leveraging AI tools to enhance pharmaceutical development while strengthening export strategies and aligning R&D efforts with the evolving dynamics of global health. By capitalizing on the projected market expansion and the growing global demand for advanced medical solutions, stakeholders in South Korea's healthcare sector will be positioned to navigate the complexities of the future effectively, thus ensuring both competitive advantage and enhanced public health outcomes.

Glossary

  • Biohealth: A sector encompassing pharmaceuticals, medical devices, and healthcare services. As of May 2025, South Korea is positioning itself to enhance its biohealth capabilities, with plans to rise from 11th to 8th globally by 2030.
  • CAGR (Compound Annual Growth Rate): A measure used to indicate the mean annual growth rate of an investment over a specified time period longer than one year. The medical supplies market in South Korea is projected to achieve a double-digit CAGR through 2032, highlighting robust growth expectations.
  • R&D (Research and Development): A crucial component of innovation in the healthcare industry, referring to the activities related to the development of new products or processes. R&D investment in South Korea's biohealth sector surged by 18.5% in 2023, underscoring its importance for future growth.
  • Bio Korea 2025: The largest health and pharmaceutical industry trade fair in South Korea, which began on May 7, 2025. This event showcases advancements in technology, particularly in AI applications for drug development, and features participation from around 750 companies.
  • AI in Pharma: The use of artificial intelligence technologies to enhance various stages of pharmaceutical development, including drug discovery, clinical trials, and post-market surveillance. As of May 2025, AI is expected to dramatically reduce drug development timelines and costs.
  • Exports: The sale of goods and services produced in one country to another. In 2024, South Korean health sector exports grew by 15.8%, driven primarily by biopharmaceuticals and cosmetics, indicating strong international market demand.
  • Disposable Medical Supplies: Single-use medical products that are essential for ensuring safety and hygiene in healthcare settings. The market for disposable medical supplies in South Korea is projected to grow significantly, reaching USD 17.48 billion by 2032.
  • Innovation Initiatives: Strategic programs and efforts designed to encourage new ideas and advancements in technology and products within the healthcare sector. These initiatives are crucial for South Korea in achieving its goal of ranking 8th in global biohealth by 2030.
  • Market Forecast: An assessment of the future performance of a market based on various economic indicators and trends. The report highlights expectations for the growth trajectory of South Korea's healthcare industry, particularly in biopharmaceuticals and medical supplies.
  • Digital Transformation: The adoption of digital technologies to fundamentally change how organizations operate and deliver value to customers. The ongoing digital transformation in South Korea's healthcare industry is marked by the incorporation of AI and big data analytics.

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