Drug firm questioned in rebate crackdown

An investigation is underway into a pharmaceutical company suspected of providing rebates worth billions of won to local doctors, police said Wednesday.

Gyeonggi Provincial Police Agency booked the local drug firm, whose name was not revealed, and its CEO without detention on charges of violating the Pharmaceutical Affairs Act.

Police also booked 10 doctors without detention on charges of breaching the Medical Law in a case that allegedly involves hundreds of other medical professionals.

The drug company’s CEO, surnamed Kim, is suspected of creating a slush fund and offering kickbacks to doctors, asking them to prescribe the company’s drugs to their patients between 2010 and 2014. The doctors were found to have received rebates worth up to millions of won.

Police have searched the pharmaceutical company and seized its accounts and computer files in January.

Apart from its involvement in the rebate scandal, the company is also under suspicion of bribing a tax officer to sway a tax investigation in its favor.

Pharmaceutical companies in Korea have a long history of issuing rebates to doctors as part of their sales strategy. Most recently, DongWha Pharmacy, the country’s oldest pharmaceutical company, was caught providing more than 5 billion won worth of rebates to 923 hospitals and clinics nationwide last December.

By Ock Hyun-ju  (laeticia.ock@heraldcorp.com)