The South Korean government will spend a combined 10 trillion won ($8.9 billion) on the project to develop 20 new drugs over the next five years in collaboration with private local drug makers, the health ministry said Sunday.

The government will also form a fund of 500 billion won to help the local pharmaceutical companies expand their presence in the global drug market by acquiring promising overseas drug makers during the same period, the ministry said.

The new drug development project aims to export 11 trillion won in drugs by 2017 and become one of the global top 10 pharmaceutical powerhouses, it said.

The government-led five-year project is the first stage of the plan of "Pharma 2020 Vision" released by the government last year, which is aimed at helping the country grow into one of the global top seven drug powerhouses by 2020.

To that end, the government plans to provide tax breaks to the local drug makers that invest in research and development for new drugs.

In particular, the joint drug-development project between a local company and overseas renowned laboratory will get more subsidies from the government than the private company's own project, the ministry said. (Yonhap News)