[News Space=Reporter seungwon lee] As Daewon Pharmaceutical lost the patent lawsuit for its representative domestic new drug 'Pelubi' in the first and second trials, as well as in the third trial at the Supreme Court, the lack of strategy and crisis management capabilities of the management were clearly revealed.

As this ruling makes it virtually inevitable for the drug price of Peluvi to be lowered, a sales decrease of hundreds of billions of won is expected to become a reality.

◆ Another lawsuit after losing four times?… Key reason for losing four times in a row

Daewon Pharmaceutical has lost four consecutive lawsuits over the patent of its flagship domestic new drug, Peluvi. What is the cause of this losing streak that led to the Supreme Court’s ruling in the third trial?

In 2019, generic drug companies including Youngjin Pharmaceutical filed a negative scope confirmation trial, claiming that “their Pelubi generic does not infringe Daewon Pharmaceutical’s patent.” In April 2021, the Patent Examination Board ruled in favor of the generic companies. It was determined that Daewon Pharmaceutical’s patent does not apply to generic drugs.

Daewon Pharmaceutical was dissatisfied with this and filed a lawsuit to overturn the decision with the Patent Court, but lost again in September 2022. Afterwards, it appealed to the Supreme Court, but on May 15, 2025, the Supreme Court also dismissed Daewon Pharmaceutical's argument, ultimately resulting in a victory for generic drug companies.

Separately, Daewon Pharmaceutical also filed a lawsuit against the Ministry of Health and Welfare to cancel the decision to lower the price of Peluvi, but lost in the first trial and is currently in the second trial. However, the results of this patent lawsuit are expected to have an impact on the lawsuit to lower the price of Peluvi.

The key reason why Daewon Pharmaceutical lost four consecutive cases is that the courts judged that the generic companies’ products did not fall within the scope of Daewon Pharmaceutical’s patent rights. In other words, the originality or scope of the patents claimed by Daewon Pharmaceutical were not legally recognized, and the generic companies’ patent avoidance strategy was successfully accepted. The courts at each stage did not accept Daewon Pharmaceutical’s logic.

◆ The limits of 'buying time' caused by repeated losses and unreasonable litigation

Pelubi held the formulation patent until November 2028, but latecomer pharmaceutical companies such as Yungjin Pharmaceutical, Huons, and Chong Kun Dang filed patent evasion lawsuits, and Daewon Pharmaceutical lost the first trial in 2019. Daewon Pharmaceutical refused to accept the ruling and took the lawsuits to the second and third trials, but the results were all defeats. In the meantime, Yungjin Pharmaceutical and Huons have already released generic products on the market, and Chong Kun Dang is also preparing to enter the market.

In the end, Daewon Pharmaceutical suffered a series of defeats due to the limitations of patent defense logic and the sophisticated patent avoidance strategies of generic drug companies. As a result, a price cut and sales decline for Pelubi became inevitable, and Daewon Pharmaceutical will face even fiercer market competition in the future.

Daewon Pharmaceutical bought time by delaying the price cut by filing an application for a stay of execution while delaying the lawsuit, but fundamentally failed to defend the market. Rather, it failed to block the entry of generics by being obsessed with the legal dispute, and invited the greater risk of lowering the price.

◆ Direct hit from drug price cuts, sales of hundreds of billions of won in danger of disappearing

The Ministry of Health and Welfare and the Health Insurance Review & Assessment Service have already announced a reduction in the upper limit price of Pelubi and Pelubi SR. Pelubi will be reduced from 180 won to 96 won, and Pelubi SR from 304 won to 179 won, a reduction of about 40-50%. As of last year, the Pelubi family prescription amount was 62 billion won, so if only the drug price reduction is applied, sales of 20-30 billion won could evaporate.

In particular, the lawsuit to cancel the drug price reduction that Daewon Pharmaceutical is currently in progress has also lost its chances of success due to this patent loss. This is because the logic of the lawsuit was that 'the drug price reduction cannot be accepted because the patent is maintained.'

◆ Follow-up product and compound development also ‘creaks’… Innovation capacity, market responsiveness, strategic agility ‘questionable’

Daewon Pharmaceutical is attempting to overcome the crisis by developing follow-up products such as 'Pelubies' that improves the shortcomings of Peluvi and a combination of tramadol, but the patent registration for the combination drug itself has been repeatedly rejected due to lack of advancement, putting a red light on commercialization.

The growth of the existing Peluvi series may partially offset the impact of the drug price cut, but a decline in sales is inevitable in the long term.

Pelubi has maintained an overwhelming market share even after the entry of generics, but this is largely due to the lack of sales power of competitors' generics. Daewon Pharmaceutical has continuously shown strategic incompetence in decision-making and crisis response, such as failure to defend patents, failure to manage risks of drug price reductions, and failure to secure rights for follow-up products.

A pharmaceutical industry insider said, “The legal battles that Daewon Pharmaceutical has been waging over the past few years are understandable. However, the odds of winning were slim, and it was nothing more than a desperate attempt to prevent a reduction in the price of original drugs.” He analyzed the situation as “a combination of frequent investigations and a long-standing bad relationship, like the stigma of being a regular at the Ministry of Food and Drug Safety and the National Tax Service, as well as backward family management, low ESG scores, poor performance, and financial instability.”

Experts from not only the pharmaceutical industry but also the financial world unanimously pointed out that Daewon Pharmaceutical's loss in the Peluvi patent case was not simply a case of a loss in a lawsuit, but a case that revealed a combination of the company's lack of crisis management and strategy for the future, as well as the incompetence of its management.

Another pharmaceutical industry insider emphasized, "In response to the predictable threat of generic offensive and drug price cuts, Daewon Pharmaceutical failed to come up with any practical and innovative countermeasures other than delaying the lawsuit," and "As a result, not only did it suffer a loss of hundreds of billions of won in sales, but even Peluvi, which had been the symbol of the 'domestic new drug success story,' is now in danger of having its growth plate closed."