Nam Hyun-woo has worked as a staff writer at The Korea Times since 2013, mostly covering business and politics. He currently belongs to the Business Desk where he covers topics such as emerging tech, AI, ICT and Korea's chaebol community. Prior to joining the team, he was the paper's correspondent for the presidential office of Korea during the Yoon Suk Yeol and Moon Jae-in administrations.
Korea Vaccine fined for manipulating TB vaccine market
The Korea Vaccine office in Songpa-gu, Seoul. / Yonhap
By Nam Hyun-woo
By Nam Hyun-woo
Korea Vaccine, a drug maker that imports most of the tuberculosis (TB) vaccines used in Korea, was fined and referred to the prosecution for manipulating imports of vaccines for babies to maximize profits, according to the Fair Trade Commission (FTC), Thursday.
Public uproar is growing over the firm's manipulation which caused a nationwide shortage of TB vaccines in 2017, and stirred fear among parents of infants.
FTC fined Korea Vaccine 990 million won ($832,000) and filed complaints with the prosecution against ranking company officials for deliberately stopping imports of intradermal Bacille Calmette-Guerin (BCG) vaccine in 2017.
The BCG vaccine is designed to prevent TB in infants and children. There are two types ― intradermal and percutaneous. The former injects the vaccine between skin layers using a standard syringe and is free through a state program. The latter uses a plastic former with nine needles that puts the vaccine into the skin surface and costs 70,000 won,10 to 18 times more expensive that the intradermal shot.
There are three BCG vaccines licensed in Korea: the intradermal vaccine by Denmark's Statens Serum Institut (SSI), and intradermal- and percutaneous-types by the Japan BCG Laboratory (JBL).
Korea Vaccine has been mostly importing JBL's percutaneous vaccine, but also started importing the Japanese firm's intradermal in 2016 when the Danish intradermal was halted in September 2015 amid SSI's privatization.
The FTC said this gave Korea Vaccine a monopoly for nearly three years. The company exploited this by stopping its import of JBL's injection-type vaccine in 2017, forcing more parents to choose the more expensive percutaneous vaccines.
In 2016, media reports alleged that arsenic was found in JBL's percutaneous vaccine, and Korea Vaccine's percutaneous also saw a sharp drop in sales. To cope with the plunge, the company reduced imports of the vaccine in 2016 and eventually stopped them in 2017.
As the volume of intradermal vaccine dropped, the government launched a free vaccination program using the expensive percutaneous vaccine from October 2017 to June last year, which cost the state 14 billion won.
The FTC said Korea Vaccine's average monthly sales during the period were 762 million won, up 63.2 percent from before the free program started.
“The company exploited its monopolistic status by using vaccines that are directly linked to the health and life of newborns,” an FTC official said, adding it will continue monitoring drug makers' business practices.