By Yi Whan-woo
Investigators raided the headquarters of the nation’s leading pharmaceutical company Wednesday to probe an allegation that the firm offered kickbacks to hospitals and clinics in return for purchasing its products.
The joint team of prosecutors and officials of the Ministry of Health and Welfare and the Korea Food and Drug Administration searched the offices of Dong-A in Dongdaemun-gu, Seoul.
They confiscated accounting books, computer hard disks and other relevant material that might support the allegation.
The Seoul Central District Prosecutors’ Office did not reveal the amount of kickbacks the firm allegedly offered to doctors at hospitals and clinics across the country.
However, sources close to the prosecution estimated the kickbacks roughly at 9 billion won ($8 million).
The prosecution said the probe was part of the government’s full-scale efforts since April 2011 to root out any corrupt deals between the drug firms and hospitals.
“We searched and seized Dong-A files because we wanted to check a few things on the company in relation to the kickback allegations,” a prosecutor said.
“It is one of the many other companies that we’re looking into, and we’ll make a decision on whether to grill employees after we go over the documents we confiscated,” he said.
A number of pharmaceutical companies were involved in such cases in the past, including Dong-A, that remains No. 1 in the market.
The firm recorded sales revenue of 900 billion won ($807 million) in 2011, its highest ever.
The amount was a 7.4 percent increase from 2010, when the government found that the firm provided illegal kickbacks to a public health center in Cherwon, Gangwon Province.
The health ministry ordered Dong-A to lower prices of 11 of its products by 20 percent as a penalty. The firm, however, refused to do so and has brought the case to court. The trial is ongoing.
Dong-A is one of 43 companies that the government selected in June as “innovative pharmaceutical firms.” Those in the category receive various benefits, including priority to participate in state-run research and development projects, tax redemption, as well as financial support for building research labs.
The National Assembly, however, said in its ongoing audit this week that 15 of those firms have been involved in offering kickbacks to hospitals and clinics.