‘Drug firm’s pick of doctor to attend conference overseas illegal’

Kim Yun-mi  Published 2019.08.22  15:45  Updated 2019.08.22 15:46


Pharmaceutical companies’ support for physicians to attend academic conferences should be fully committed to the original purpose of knowledge sharing and academic advancement, an official at the anti-trust watchdog said.

Direct support for a particular doctor will be regarded as an unfair trade act, the official added.

Jang Hye-rim, director of the Knowledge Industry Monitoring Division at the Fair Trade Commission, speaks on fair trade rules for international conferences at K-Hospital Fair 2019 in Seoul, Thursday.

Jang Hye-rim, director of the Knowledge Industry Anti-monopoly Division at the Fair Trade Commission, presented examples of the Fair Trade Act implementation in the pharmaceutical sector, during a debate on new fair competition rules on international academic events at K-Hospital Fair 2019 in Seoul, Thursday.

“Pharmaceutical and medical industries are to lead our economy’s new growth. Pharmaceutical firms should aggressively develop new drugs, rather than being content with the local generics market, to secure key intellectual property rights and tap into overseas markets,” Jang said. “To do so, they should do away with old, wrong practices such as offering illegal rebates. They should know that complying with the fair-trade rules will eventually help them.”

As physicians, not consumers, choose prescription drugs, and the information asymmetry between doctors and patients is significantly large, there is a high possibility of unfair incentives for clients in the prescription drug market, she noted.

“As of 2017, local drugmakers’ sales management expenses accounted for 31.5 percent of the revenue, which is markedly higher than 12.5 percent for manufacturers,” Jang said.

According to Jang, the FTC has found and punished 37 cases of illegal rebates for doctors in exchange for prescribing particular drugs or using specific medical devices since 2010. Thirty-six cases received corrective orders or heavier punishment and one, a warning.

She shared an example of unfair incentives for a client. In June 2017, one drug company was found to have selected a physician to attend an overseas conference and gave unfair economic support. The company received a corrective order, faced a penalty, and the case was filed with the prosecution.

“The illegal act occurred for five years and five months, and the amount of the illicitly raised money reached 7.6 billion won ($6.2 million). A significant amount went to the doctor as well,” she said.

Usually, the purpose of an international conference is to share professional knowledge and seek advancement in the field. Despite such purpose, however, giving privilege to a doctor selected by a drug company can be a problem, she noted. “Such an act is likely to confuse doctors when making the right choice, which makes it difficult to anticipate a healthy competition in the pharmaceutical market,” she said.

Illegal rebates should be contained voluntarily within the market, rather than being controlled by the law, Jang said. “Regulation should exist for the advancement of an industry, and it should not hinder it,” she added.

Korea Pharmaceutical and Bio-Pharma Manufacturers Association (KPBMA), Korea Research-based Pharma Industry Association (KRPIA), and Korea Medical Devices Industry Association (KMDIA) introduced fair trade rules in 1994, 2006, and 2011, respectively.

Practices applied by the rule include providing samples, donations, support for hosting and participating in academic conferences, product briefings, market research, post-marketing surveillance, and exhibition advertising.

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