Patent challenges without entry? Reassessing first generic exclusivity under the patent-linkage system in South Korea

South Korea introduced the First Generic Exclusivity (FGE) system as part of the patent linkage system to promote patent challenges and market entry of generic drugs. Evaluating the impact of FGE on the number of generic entrants is central to assessing the system. This study elucidates factors-including patent characteristics-that influence the number of FGE applicants and holders at the ingredient level.

Using data from the Ministry of Food and Drug Safety, 85 ingredients with FGE applications filed between 2015 and 2025 were analyzed. For each ingredient, originator-based characteristics-including manufacturer type, patent characteristics, and drug characteristics-were collected, and the year of the first FGE application for each generic was identified. Negative binomial regression analysis was performed to determine factors affecting the number of FGE applicants, holders, and non-holders.

Among 85 ingredients, the mean number of FGE applicants was 6.59 (SD = 9.52, IQR 1-9), and the mean number of FGE holders was 4.61 (SD = 8.08, IQR 0-4). Regression results showed that the number of FGE applicants was positively associated with the number of patents and approval year, but negatively associated with the reimbursement price. The number of FGE holders showed positive associations with approval year and negative associations with reimbursement price. The application year was negatively correlated only with the number of FGE holders.

Although the introduction of the FGE system and the expansion of patent portfolios increased patent challenges by generic manufacturers, this did not consistently translate into actual generic market entry, underscoring the need to reexamine whether the FGE system is effectively designed to foster substantive competition.