“Halal certified” is the new buzzword in the Korean pharmaceutical industry, with local pharmaceutical firms rushing to enter and expand their presence in countries heavily populated by Muslims.
Halal, an Arabic word that means “permissible” in English, can roughly refer to items that are permissible for Muslims to consume under Islamic law.
The certification is required for products manufactured in a manner recognized by Islamic law. The accreditation, therefore, is essential for products entering Muslim-majority countries.
About 2 billion people are estimated to live in these regions. With the market expected to reach 90 trillion won, domestic pharmaceutical firms are paying attention to whether these regions will emerge as a symbolic “blue ocean” market.
Will Halal certification be the next big thing?
According to industry sources, local pharmaceutical firms are rushing to get their products. Halal certified so they can enter the Muslim market.
The domestic pharmaceutical industry has overlooked the market until recently, considering the difficulties of getting the certification.
Pharmaceutical firms are required to submit documentation of the production process to the local certification body and undergo a due diligence process. The whole process also takes anywhere from six months to two years.
Distributing medical products locally also requires the company to cooperate with local firms that have production facilities.
In this regard, many firms have noted the arduous process of getting approved in these regions.
For instance, soft capsules in pharmaceutical formulations use gelatin derived from animals. The manufacture of these animal-based gelatin uses the blood of pigs, which is a violation of Islamic law. Also, the use of animal or human genes is not allowed.
“The Halal certification often requires a change of raw materials, forcing most to give up trying to enter the market,” an industry official who requested anonymity said. “However, because people in the area prefer halal products that are reasonably priced, pharmaceutical firms have been citing it to be the next upcoming market.”
Indonesia, which has the largest Muslim population in the world, is emerging as a potentially significant and upcoming market.
According to the Euromonitor, the Indonesian pharmaceutical market has almost tripled from 50.99 trillion rupees in 2012 to about 143.63 trillion rubles in 2018.
The Indonesian government also announced a national “roadmap” in 2017 to foster the pharmaceutical and medical device industry in 2017.
As the growth potential of the market grows, domestic pharmaceutical companies are also actively promoting the Halal certification.
Daewoong Pharmaceutical recently obtained the Halal certification for Epodion, which has recombinant human erythropoietin alfa as its main ingredient, through its Indonesian joint venture Daewoong Infion.
Daewoong Infion said it built a biopharmaceutical plant in Indonesia to produce and sell Epodione, the region’s first biosimilar.
“Based on having received the Halal certification in Indonesia, the country with the largest Muslim population, Daewoong aims to enter the Middle Eastern market that is estimated to be about 80 trillion won,” the company said.
“The firm will work towards contributing to improving the quality of life for Muslims around the world by providing excellent and safe medicines,” it added.
Chong Kun Dang is also making headway in the region, having obtained the certification for several products and production facilities.
Chong Kun Dang created a joint venture called CKD-OTTO and struck up a partnership with local pharmaceutical firm OTTO for its anti-cancer drug. It also gained the certification for its production plant from the Majelis Ulama Indonesia. This plant is the first Halal-certified anti-cancer plant in Indonesia.
Chong Kun Dang said that it also got anti-cancer drug Gemcitabine and Paclitaxel approved by the Indonesian government. The firms said it aims to produce the drugs locally and also get more products approved in the country.
Ildong also said that it is aiming to expand its presence in the market.
The firm said that it got its probiotics strain Halal-certified in 2015 from the Korea Muslim Federation, a local certification agency.
“An increasing number of pharmaceutical companies are pursuing the certification to advance into these countries, including Indonesia,” an industry official requesting anonymity said.
“The increase in Halal-certified drugs could lead to wider export routes for domestic pharmaceutical companies,” he added.