The Korea Pharmaceutical Distribution Association (KPDA) is seeking to file a complaint with the Fair Trade Commission, claiming that Novo Nordisk Korea’s exclusive supply contract with Zuellig Pharma Korea was against the competition law.
Novo Nordisk Korea is to supply all its medicines, except for medical needles, through Zuellig Pharma Korea starting this year.
However, the KPDA claimed that Zuellig Pharma has been setting distribution margins excessively low, compared to traditional margins. Moreover, some multinational pharmaceutical firms are replacing small wholesaler partners with larger ones such as Zuellig Pharma, which makes it more difficult for small- and medium-sized wholesalers to survive, the distributors’ group said.
The KPDA raised the issue of Novo Nordisk’s exclusive supply for Zuellig Pharma at the latest boardroom meeting.
Novo Nordisk’s plan to distribute all its drugs through Zuellig Pharma from January this year violated the antitrust law, the KPDA said. Novo Nordisk used to supply obesity treatment Saxenda only through Zuellig Pharma. The KPDA said it would collect evidence to support its claim and report it to the FTC.
However, the Korean unit of Novo Nordisk said its exclusive deal with Zuellig Pharma Korea was part of the Denmark-based multinational firm’s “global supply chain optimization project.”
As the Danish firm had exclusively supplied antidiabetic medicines through GC Pharma, formerly Green Cross, it could not understand why the wholesalers’ group took issue with the exclusive supply with Zuellig Pharma, an official at Novo Nordisk Korea said.
“The headquarters is carrying out a project to optimize supply chains because it would be inefficient to provide medicines for patients if we have different drug distributions and storages depending on wholesalers,” the official said. “Under the global policy, the Korean unit also unified the distribution channel as well.”
The exclusive supply contract with Zuellig Pharma was not a significant change in Novo Nordisk’s distribution system, the official noted.
“We’re just changing the unified distribution channel from GC Pharma to Zuellig Pharma. As our policy is to benefit patients, I hope we could solve the issue with the KPDA smoothly,” he added.