The 'local government tax injection agent' is emerging as a blue ocean (a market without competition) for domestic pharmaceutical and bio corporations. With few competing companies and a steady increase in the demand for cosmetic procedures due to the influence of media and social media, it is seen as having growth potential.
According to the industry on the 10th, following Daewoong Pharmaceutical and LG CHEM, companies such as Medytox, Huons, and Verniesthetics have received approval for local government tax injection agents or are conducting clinical trials with aims to enter the market.
Local government tax injections are procedures that involve injecting drugs to remove subcutaneous fat accumulated in specific areas such as the chin, abdomen, sides, and thighs. They differ in purpose and mechanism from globally popular obesity treatment injections such as Wegovy and Zepbound.
Wegovy from Denmark's Novo Nordisk and Zepbound from the United States' Eli Lilly mimic the hormone glucagon-like peptide (GLP)-1, which helps control appetite and blood sugar to promote a feeling of fullness and aid weight loss. In contrast, domestic companies' local government tax injection agents focus primarily on deoxycholic acid as the main component, targeting the reduction of body contours and circumferences.
The emphasis is more on aesthetic purposes than weight loss. Deoxycholic acid is originally a bile acid component that emulsifies and dissolves fat in the intestines, destroying fat cells themselves to reduce their number. In 2015, the U.S. Food and Drug Administration (FDA) first approved AbbVie's 'Kybella', which contains deoxycholic acid, for treating double chins.
The industry highlights that other local government tax injection agents reduce the size of fat cells, while deoxycholic acid formulations destroy and remove fat cells, hence also referred to as 'fat-breaking injections.' The product approval indications are for improving submental fat, but in actual medical practice, they are used off-label for fat removal in various areas such as the abdomen and thighs.
Among domestic companies, Daewoong Pharmaceutical was the first to enter the local government tax injection agent market. In August 2021, it obtained approval from the Ministry of Food and Drug Safety for its deoxycholic acid-based product 'Violet'. According to the company, Violet currently holds the number one market share in the domestic local government tax injection agent market. Daewoong Pharmaceutical is aiming to expand its market presence to maintain its leading position. In May, it published the clinical trial results confirming the arm fat removal effect of Violet in the Journal of Cosmetic Dermatology.
LG CHEM received product approval for the local government's second double chin improvement injection 'Bellacollin' last year. In clinical trials, it confirmed significant improvement in adults with moderate to severe levels of submental fat. The company reported that within six months post-launch, its market share rose to nearly 20%.
Latecomers are also preparing. Medytox has developed the local government tax injection agent 'New V (NEWV, development code MT921)' and applied for product approval for chin fat improvement in 2023. The company noted that it is "waiting for the approval examination results from the Ministry of Food and Drug Safety."
Verniesthetics, which is invested by the Huons Group, is also developing the local government tax injection agent 'MRC101'. The company stated, "We completed recruitment of participants for the Phase 2 clinical trial early this month and plan to complete the clinical trial by the first half of next year." Once development is completed and approval is granted, Huons Biopharma will handle the manufacturing and sales of the product. The two companies signed a strategic investment agreement in November last year to secure distribution and manufacturing rights.
According to the market research firm Grand View Research, the global aesthetic medical procedure market size is approximately $127.1 billion (about 175 trillion won) as of 2023 and is expected to grow at an average annual rate of about 14.7%, reaching $332.1 billion (about 457 trillion won) by 2030.
The industry anticipates an increase in demand for local government tax injection agents as aesthetic procedures become mainstream. Recently, while demand for surgical treatments such as liposuction and cosmetic surgery has decreased, there is a growing trend toward non-surgical treatment methods such as injections.
An industry official noted, "There was initially only limited demand for botulinum toxin products for wrinkle improvements, but as more products became available and the procedures became mainstream, demand increased. The local government tax injection agent market is also expected to grow alongside the increase in formally approved products."
The director of a dermatology clinic in Gangnam, Seoul, stated, "Customers seeking local government tax injections include a variety of individuals such as celebrities, idol trainees, brides-to-be, university graduates, job seekers, and foreign tourists, noting that there is considerable demand following experiences shared by Instagram influencers."
In the field of dermatology and plastic surgery, procedures are performed under various names such as 'local government tax injections', 'contour injections', and 'diet injections'. Besides deoxycholic acid, 'cocktail injection therapy' is employed, mixing various ingredients such as caffeine, steroids, and hyaluronidase.
Because each physician has different strategies for drug mixing ratios and the treatments are non-reimbursable, the results and prices can vary widely. There have been recurring reports of side effects, necessitating caution.
The National Evidence based Healthcare Collaborating Agency (NECA) revealed that, based on a survey conducted last year on consumers with experience in local government tax injection procedures, serious cases such as bacterial infections, skin necrosis, acute toxic reactions requiring intensive care, and drug allergy reactions were rarely confirmed.
Kim Min-jeong, head of the health technology assessment research department at the National Evidence based Healthcare Collaborating Agency (NECA), said, "Since each physician has different procedures, those considering local government tax injections should carefully verify the effects and side effects before making a rational choice."