In the early 2000s, countries around the world competed in research over stem cells, dubbed 'the flower of future medicine.' South Korea got an early start. In 2004, a team led by Dr. Hwang Woo-suk announced it had succeeded in culturing cloned embryonic stem cells for the first time in the world. However, as this paper was found to have been fabricated, South Korea fell behind while Japan made substantial investments in induced pluripotent stem cells, ultimately winning a Nobel Prize. Over the past 20 years, we look at how the competition in stem cells between South Korea and Japan will continue moving forward. [Editor's note]
While Japan has made strides in stem cell and gene therapy research, South Korea has effectively remained stagnant. As the Japanese government made significant investments in stem cell research and relaxed regulations, achievements in research and development and the establishment of startups followed suit. Compared to Japan, South Korea has faced stricter research and development regulations and a lack of support systems, causing researchers and corporations to hesitate. Recently, South Korea has revised relevant laws in an attempt to reverse this trend. Nevertheless, experts believe that South Korea still has challenges to overcome to enhance its competitiveness.
◇South Korea has been stagnant due to the trauma from the Hwang Woo-suk scandal
While Japan actively invests in basic research in medical and scientific fields, South Korea's research environment has stagnated. Following the Hwang Woo-suk incident, where cloned embryonic stem cell papers were manipulated, South Korea entered a dark age for stem cell research and development in the 2000s. At that time, the government reduced support, and the societal atmosphere shifted towards strengthening regulations.
This year, the research and development budget for the health and medical sector from five ministries—Ministry of Health and Welfare, Ministry of Science and ICT, Ministry of Trade, Industry and Energy, Korea Disease Control and Prevention Agency, and the Food and Drug Safety Ministry—is 2.1047 trillion won. Among this, the budget allocated for advanced regenerative medicine, such as stem cells, is 994.7 billion won, and the budget for supporting antiviral development and advanced regenerative medicine technology against future infectious diseases is 76 billion won.
Japan has concentrated its budget on regenerative medicine and stem cells. In 2015, the Japan Agency for Medical Research and Development (AMED) was established to provide integrated support for regenerative medicine research, with an annual research and development budget of about 130 billion yen (1.3 trillion won).
There is also a gap between the two countries in terms of regulation. Japan enacted the Regenerative Medicine Law in 2014, which allows conditional use of stem cell therapies for patient treatment as long as initial clinical trials are completed.
The discovery of induced pluripotent stem cells (iPS cells) by Professor Shinya Yamanaka from Kyoto University, who received the Nobel Prize in Physiology or Medicine in 2012, spurred the enactment of the law. iPS cells are produced by reprogramming mature cells into an embryonic stem cell-like state that can develop into any type of human cell.
Embryonic stem cells had previously attracted attention for their potential to replace cells damaged by disease, but they raise ethical issues since they must destroy fertilized eggs formed by the union of sperm and egg. iPS cells do not have this problem and can be created from a patient's own cells, allowing for personalized treatment. This greatly increases their commercialization potential.
As Japan developed laws and invested money, scientists and corporations could accelerate research and development of stem cell therapies. Of course, there were controversies as patient treatments occurred before completing clinical trials. However, as pathways opened for commercialization beyond research, the market has grown significantly, leading to an influx of patients traveling overseas for cell treatment. In 2022, it was reported that 73,819 patients received cell therapy in Japan, with a total of 114,077 administrations.
◇Revisions to the advanced regenerative medicine law, market remains unresponsive
In 2020, South Korea first enacted the Advanced Regenerative Medicine Act, which supports stem cell research. The key change was to relax regulations to allow patients to receive stem cell and gene therapies that are under development during clinical trials.
According to the Ministry of Health and Welfare, since the implementation of the Advanced Regenerative Medicine Act in August 2020, there have been 179 applications for clinical research plans. Of these, 43 have been approved. The remaining 77 were deemed unsuitable, 44 were rejected, and 15 are still under review.
Of the 43 approved clinical studies, only two were related to iPS cells: one study administering cartilage cells derived from iPS cells to patients with knee osteoarthritis (Catholic University of Korea, Seoul St. Mary's Hospital), and another study transplanting endothelial cells generated from iPS cells into patients with peripheral artery disease (Yonsei University Severance Hospital).
However, voices in academia and industry have pointed out that the Advanced Regenerative Medicine Act is a half-baked bill. Only therapies confirmed for safety and efficacy can be used for research purposes, and they cannot be used for therapeutic purposes. This hampers commercialization, leading to hesitance in startup efforts by scientists and R&D investment and support from the market and corporations.
Concerns have once again been raised that South Korea may lag behind Japan in the field of regenerative medicine, leading the government and National Assembly to revise the Advanced Regenerative Medicine Act, which passed in February. The core of the amended act is to allow the use of some stem cell and gene therapies, initially restricted for research purposes, for therapeutic use for specific patients, thus paving the way for commercialization. Clinical research will target all diseases, while treatments will only be permitted for patients with rare, severe, or intractable diseases.
Since the amended Advanced Regenerative Medicine Act took effect in February, however, there has been no significant change. As of the 17th, the Ministry of Health and Welfare reported that there have been zero applications for clinical research plans and zero approvals for treatments since its implementation. A ministry official explained, "There are no significant changes yet as it is still early in the implementation process of the amended act."
◇Advantages in safety management, high costs remain a challenge
Experts acknowledge that while South Korea is indeed slower than Japan in the field of cell and gene therapies, the market has not yet matured, thus providing opportunities. In particular, they agree that South Korea does not lag behind Japan in stem cell production and safety management. With proactive government investment, institutional support, and infrastructure development, South Korea can leverage its unique competitiveness to target overseas markets.
To enhance its competitiveness in stem cells, many advocate that South Korea needs to strengthen investment in R&D and infrastructure development at the national level. A representative from a bio corporation stated, "South Korea must secure the ability to independently obtain cell therapy technology and resources, or 'cell sovereignty.'" They added that, "To achieve this, we need to invest nationally in establishing standard cell lines and biobank infrastructure that meet global standards."
If South Korea establishes a global standard cell line, it can distribute this free of charge to researchers worldwide and receive royalties from commercialization. This creates a virtuous cycle where reinvested royalties from cell therapy R&D enhance South Korea's competitiveness.
There is also a viewpoint that the market needs to be supported by insurance systems, similar to Japan. Japan has opened pathways for public insurance to cover regenerative medicine. In contrast, regenerative medicine is not covered by health insurance in South Korea. Additionally, the current Advanced Regenerative Medicine Act only allows treatment for severe or rare disease patients, excluding popular cosmetic and anti-aging applications prevalent in Japan. The industry sees this as a structurally challenging situation for profitability. The Ministry of Health and Welfare has stated that while there are no plans to include cosmetic and plastic surgeries, it plans to add age-related diseases in the future.
At the same time, strategies have been proposed to leverage South Korea's strengths. Japan's significant lowering of thresholds for regenerative medicine has resulted in repeated patient safety incidents. Many facilities have emerged without proper standards and management conditions. In contrast, in South Korea, stem cell research and clinical trials have been conducted centered around large hospitals, which has led to standardized facilities and services.
Choi Seung-ho, CEO of Panacell Biotech and director of Seon Medical Center, noted, "In terms of medical services, production, and procedural capabilities, we could outperform [Japan]." He added, "If the government publicly categorizes the management of stem cell culture facilities by grade, it could gain trust that South Korea is superior to Japan in this field."
In South Korea, the Advanced Regenerative Medicine Review Committee under the Ministry of Health and Welfare manages and approves the approval of regenerative medicine therapies. In contrast, Japan approves therapies through private organizations designated by the Ministry of Health, Labour and Welfare. South Korea reviews based on safety and efficacy data, while Japan conducts only literature reviews.
Choi Dong-ho, chairperson of the Korean Society for Stem Cell Research and a professor at Hanyang University Hospital, stated, "It is crucial to manage to prevent accidents during treatment processes," and added, "In this respect, South Korea receives evaluations as being better." An official from the Ministry of Health and Welfare remarked, "Although South Korea is a latecomer compared to Japan, we will leverage our advantages to ensure safe and effective treatment outcomes."