A midsize Korean pharmaceutical company has been embroiled in an illegal rebate case recently, despite its pledge to obtain an ISO 37001 certification for anti-bribery management.
The Gyeonggi Nambu Provincial Police Agency said on Wednesday that they booked without detention Kukje Pharm’s Co-CEO Nam Tae-hun and nine other executives for bribing physicians to promote the company’s medicines.
The police also booked 106 doctors and 11 hospital managers for receiving the illicit money, and arrested a physician identified only by the surname Yoon.
According to the police, Kukje Pharm paid from 3 million won ($2,648) to 200 million won to physicians or managers at 384 hospitals and clinics across the country, from January 2013 to July 2017, in return for prescribing Kukje’s drugs.
The total amount of the illegal rebates reached 4.2 billion won, the police said.
Kukje created and managed the illicit rebate money with budget items such as special bonuses and headquarter support funds. The drugmaker’s salespersons paid doctors 10 to 20 percent of the drug prescriptions in cash.
If a doctor prescribed Kukje’s drugs in severe competition against rival medicines or the company’s new therapies, the salespersons paid the doctor 100-300 percent of the drug prescription, the police said.
Physicians who received the illicit rebate had salespersons attend refresher training, pay dinner expenses, or drive them home after a drinking session, according to the police.
Kukje’s salespersons even confessed that they had to run errands for a hospital’s owner, helping his child go to the preschool, attending an event, and delivering side dishes for the event, the police added.
Observers said the recent bribery case is likely to damage the drugmaker’s effort to get certified in transparent management in the second half.
Kukje established the anti-corruption management system in March and aimed to win ISO 37001 certification after operating and internally evaluating it.
“Besides Kukje, the police have been investigating several drug companies, and the results will come out soon,” a pharmaceutical source said. “I’m worried that the pharmaceutical market could be reeling from illegal rebate issues.”