The Ministry of Health and Welfare (MOHW) is set to revise its certification criteria for “innovative pharmaceutical companies,” raising the required R&D expenditure ratio by 2 percentage points. Rebate-related violations will no longer lead to automatic disqualification but will instead result in a 10-point deduction during evaluation.

According to industry sources on May 13, the ministry has drafted updates to the Regulation on Certification of Innovative Pharmaceutical Companies. The long-anticipated revision, originally expected in the first quarter, was delayed due to administrative changes, including the departure of Director Chang-hyun Oh on May 1. With Kang-seop Lim appointed as his successor on May 13, the process is expected to move forward.

According to plans obtained by HIT News, the core changes include:

① For companies with annual pharmaceutical sales under $71 million:
The R&D threshold will increase from $3.6 million or 7% of sales to $7.1 million or 9%.

② For companies with sales over $71 million:
The required R&D ratio will rise from 5% to 7%.

③ For companies certified under cGMP standards:
The R&D requirement will increase from 3% to 5%.

In addition, the handling of rebate violations will change. Under the current system, any violation leads to disqualification. The revised approach introduces a points-based penalty: companies with two or more infractions or total rebates exceeding $3.6 million will receive a 10-point deduction instead of being automatically disqualified.

The overall evaluation structure will also be revised. The total score will be reduced from 120 to 100 points, with new metrics added—including pharmaceutical R&D spending, number of clinical trials, and export performance. Evaluation categories such as supply chain management will also be updated.

Foreign pharmaceutical companies will be assessed under a separate framework and may choose between general or foreign-specific evaluation criteria. Additionally, companies that fail to obtain certification will receive written feedback explaining the reasons for rejection to enhance transparency.

Pending legal and administrative review, the revised criteria are expected to take effect in the third quarter of 2025.