Probe launched to tackle drug kickbacks

By Kim Tae-jong

The government has launched an intensive investigation into widespread kickbacks between pharmaceutical firms, and hospitals and pharmacies.

The Ministry of Health and Welfare said it will join hands with the Korea Food and Drug Administration and the National Health Insurance Corp to conduct the investigation.

Despite implementation of a new law last November, which makes pharmaceutical firms, doctors and pharmacists subject to punishment when involved in drug kickbacks, the practice has not been rooted out.

Pharmaceutical companies provide hospitals and wholesalers with a huge amount of kickbacks by paying for expensive meals, rounds of golf, overseas trips and symposiums for doctors and pharmacists to illegally promote sales of their products.

“If we eliminate this illegal practice, pharmaceutical firms can invest more money in research and development for new medicines and consequently decrease the prices of drugs,” said Lee Dong-wook, an official from the health ministry during a news briefing on Tuesday.

The ministry also suspects kickbacks will increase this year as there will be more generic drugs available after patent protection of many original drugs expire.

In its first phase, the joint investigation body will target major pharmacies in front of big hospitals and wholesale drug stores.

With mounting calls from civic groups for tougher measures against the illegal practice, the intensive investigation will also lead to a separate probe by the prosecution and legal action.

Regarding those found accepting kickbacks, the health ministry plans to take administrative measures and request further investigations. They will also undergo an examination and inspection by the Fair Trade Commission and the National Tax Service.

While the health ministry will first investigate major pharmacies, the prosecution plans to separately investigate pharmaceutical firms and medical institutes.