Drug makers fined W3b for illicit rebates

The Fair Trade Commission imposed a combined 3 billion won ($2.78 million) in fines on nine pharmaceutical companies for unfair trade practices, including the provision of illegal rebates to doctors and wholesalers, it said Sunday.

The toughest punishment of 753 million won was slapped on Pacific Pharma Corp., for paying kickbacks to doctors in forms of gift cards, golf tours and cash.

Those involved include Han All Pharmaceuticals, Shinpoong Pharm, Yungjin Pharm, Mitsubishi Tanabe Pharma Korea, Schnell Biopharmaceuticals, Sama Pharm, Newgen Pharm, and Sky New Pharm.

“The nine companies spent a total of 40.19 billion won on hospitals and doctors with sweeteners in the period between 2006 and last November, for using their products,” the corporate watchdog said.

“We found evidence of them paying kickbacks as many as 38,278 times across those five years. Four major hospitals were targeted as well.”

FTC officials said that in some cases payments were made for handling one-off “translation work” for drug companies, while free dinners and special trips were commonly provided.

Since November, the government has been applying dual-punishment on both the giving and receiving ends of illegal rebates but the watchdog said the case occurred before the system was enforced.

“We’ve confirmed that illegal rebates are still commonly practiced in the industry. We will report every case to the Ministry of Health and Welfare so that follow-up actions can be taken on those punished,” Shin Dong-kwon, director of the agency’s Seoul branch said.

By Cynthia J. Kim (cynthiak@heraldcorp.com)