GSK, Green Cross, Kwang Dong fined for rigging vaccine prices

Fair Trade Commission (FTC) Chairman Han Ki-jeong speaks during a press conference at Sejong Government Complex, Thursday. Yonhap

By Lee Kyung-min

A total of 32 local and global vaccine manufacturers, distributors and retail sellers, were fined a combined 40.9 billion won ($32.1 million) for rigging bid prices of vaccines, the country's antitrust agency said Thursday. Included are global multinational pharma titan GlaxoSmithKline and its local peers ― Kwang Dong Pharmaceutical, GC Biopharma, SK Discovery, Yuhan and Korea Vaccine Sales.

The 32 firms were able to win 147 lucrative government contracts between February 2013 and October 2019, according to the Fair Trade Commission (FTC), after sharing their bidding prices with firms they arranged to front as their competitors and put in higher prices.

Their orchestrated attempts were at play over the course of 170 government contract biddings. Twenty-three biddings failed, while the remaining three were won by a third party.

The FTC said their act of collusion is a grave offense, since the biddings organized by Public Procurement Service (PPS), a government agency, were for the National Immunization Program (NIP), a government project guaranteed to generate a stable income for years. The NIP offers a schedule for a series of immunizations given at specific times throughout a person's life. The immunizations range from birth through to adulthood.

Among the 24 vaccines are ones for influenza, hepatitis, tuberculosis, tetanus, cervical cancer and pneumococcal disease. Pneumococcal disease is a name for any infection caused by bacteria called Streptococcus pneumoniae. Infections can range from ear and sinus infections to pneumonia and bloodstream infections. Cervical cancer vaccines prevent human papillomavirus (HPV), which is sexually transmitted and can cause various other types of cancer as well.

The antitrust agency said the 32 firms were able to win the contracts, mostly due to years of sustained collusion whereby the paid “competitors” were used to put in bidding prices higher than a base price, shared widely by market players.

The base price is a range of prices previously reviewed by the PPS factoring in market price and the contract price for the year before.

The firm seeking to win the bid put in 100 percent of the base price, whereas its competitors are paid off to put in slightly higher prices.

The FTC said it will continue to strengthen monitoring of bidding collusion attempts related to medicines such as vaccines, and take stern measures upon identifying violations.

The measure is an outcome of years of corrupt practices committed by almost all industry players at the expense of the public, the FTC said.