[Alpha Biz= Reporter Kim Jisun] In the past five years, six pharmaceutical companies have faced administrative sanctions for engaging in illegal rebate practices involving 480 drug products. However, the enforcement of these sanctions has been delayed in some cases due to ongoing administrative lawsuits.
According to data submitted to Representative Choi Soo-jin of the People Power Party by the Ministry of Health and Welfare on the 17th, Dong-A ST faced the most extensive sanctions, covering 237 products with total fines amounting to 10.8 billion KRW. Yooyoung Pharmaceutical followed with 147 products and fines totaling 4 billion KRW. Other companies, including Korea Pharma, Il-Yang Pharmaceutical, Kukje Pharma, and Pharmaking, were also caught engaging in similar practices.
Among the cases, six are currently in litigation, delaying the execution of sanctions. For example:
Yooyoung Pharmaceutical filed a lawsuit immediately after receiving sanctions, with the first trial underway and a disputed amount of 1.1 billion KRW.
Korea Pharma is in the first trial for a 50-million-KRW case.
Il-Yang Pharmaceutical and Dong-A ST are contesting fines of 100 million KRW and 1.05 billion KRW, respectively.
The government's ability to enforce administrative sanctions hinges on the legal confirmation of allegations through lawsuits, leading to significant delays. For instance, Yooyoung Pharmaceutical was sanctioned for providing economic benefits to healthcare providers from 2011 to 2015 in exchange for prescriptions. However, enforcement of the sanction only occurred this year, nearly a decade later.
On average, legal proceedings can postpone the execution of administrative penalties by around 10 years. This highlights the challenges the government faces in swiftly addressing illegal practices within the pharmaceutical industry.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
