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Prosecution Service (Prosecutors' Office) |
[Alpha Biz= Kim Jisun] The South Korean pharmaceutical industry is on edge amid growing scrutiny from law enforcement agencies following the launch of the new administration. Prosecutors and police have ramped up investigations into illegal rebate practices, raising concerns that further cases may soon come to light.
According to industry sources on June 6, several pharmaceutical companies have recently strengthened their internal compliance systems. Measures include more detailed documentation for sales-related expenses and enhanced online compliance training (CP programs) for sales branches.
These actions come in response to increasing efforts by legal authorities to investigate alleged violations of the Pharmaceutical Affairs Act. Last month, the Seoul Northern District Prosecutors’ Office indicted three mid-sized pharmaceutical firms and three of their employees for offering economic benefits ranging from KRW 500,000 to 2.57 million (approx. USD 360 to 1,850) to medical staff at a hospital group under the guise of product briefings between February 2019 and July 2023.
Separately, Korea Kolmar is under investigation for allegedly providing illicit rebates to over 1,000 physicians in return for prescribing its products. A pharmaceutical distributor was also recently referred to the prosecution for offering rebates to pharmacists in the Busan region.
In another development, the Gyeonggi Nambu Provincial Police Agency has reopened a rebate case involving Daewoong Pharmaceutical, which was previously dismissed by the Seongnam Jungwon Police Station two years ago. Daewoong maintains that its support was within legal limits under the Pharmaceutical Affairs Act.
As law enforcement expands its focus on rebate practices, pharmaceutical companies are bracing for potential legal and reputational risks, prompting a sector-wide tightening of compliance efforts.
알파경제 Kim Jisun (stockmk2020@alphabiz.co.kr)
