Nearly 100 bil. won offered in illegal rebates on drugs

Pharmaceutical companies are continuing to offer large sums of money or other kickbacks in rebates to doctors or pharmacists who prescribe their products, an illegal practice that drives up costs to patients, the antitrust regulator said Sunday.

In 2011 alone, pharmaceutical companies were ordered to pay 14.3 billion won ($12.8 million) in fines for offering nearly 97 billion won in illegal rebates to over 8,000 doctors and pharmacists from 2006-2010, according to the Fair Trade Commission (FTC).

"The scope of last year's investigation was limited to only the cases that took place in the past two to three years and those with hard evidence. The actual amount of rebates by pharmaceutical companies are certainly much larger than the cited amount," an FTC official said, asking not to be identified.

The average selling or marketing expenses of pharmaceutical companies is said to be about 35 percent of their total sales, with the amount paid in rebates believed to account for nearly 20 percent of their sales.

In 2009, the combined total sales of pharmaceutical companies in the country reached 15.8 trillion won, meaning up to 3 trillion won that could have been used to lower drug prices was paid in illegal rebates.

Of the companies cited last year, Sanofi-Aventis Korea was found to have paid the largest amount of 18.6 billion won in illegal rebates from 2006 to 2010, followed by Janssen Korea with 15.4 billion won and PacificPharma Corp. with 15.2 billion won, according to the FTC. (Yonhap)