The domestic pharmaceutical industry is keeping a close watch on the suspected illegal lobbying of state assessors by some drug makers regarding the registration of their new products to receive insurance coverage.

Particularly, pharmaceutical companies are concerned about the extent of disciplines against the alleged bribe-givers -- Huons(CEO Yoon Sung-tae) and LG Chem(CEO Park Jin-soo) – and the scandal’s aftermath on the overall industry, officials said.

In January, the Busan District Prosecutors’ Office raided Health Insurance Review and Assessment Service (HIRA) and the two drug makers, and on Feb. 27, it arrested and indicted a former HIRA official, surnamed Choi, and booked a current member named Kim without physical detention.

Choi is suspected of giving money to Kim in return the latter’s provision of information concerning the registration of new drugs. Three executives of the pharmaceutical companies were also summarily indicted for providing money and other bribes to Choi.

Huons and LG Chem saved their breath about the incident. “We haven’t yet received any notice regarding the illegal lobby suspicion from prosecutors,” official at Huons said. An executive of LG Chem also said, “We can’t confirm much because all are personal issues except for the prosecutorial announcement.”

Not just the pharmaceutical industry but the medical community are casting unfavorable glances toward the two companies, as the widespread suspicions about the illegal lobbying concerning the new drug registration have almost turned to be true, industry sources said.

“The screening committee member who took bribes in return for providing information on new drugs used to work for a domestic company,” said a businessman dealing with government officials for his firm, a multinational corporation. “I am worried because the scandal could give people the impression that all jobs dealing with government officials are unlawful activities.”

Other industry officials agreed. “We are afraid the ongoing scandal, as was the case of illegal rebate controversy, might lead to the distrust of the screening process itself and pharmaceutical companies as a whole,” one executive said. “Under the current circumstances in which the government holds sway on determining drug prices, drug makers can’t help but wait for its disposal, which leads to some erratic behaviors sometimes.”

A medical expert pointed to a structural problem. “There have long been calls for ensuring transparency in new drug registration and health insurance coverage,” a hospital official said. “So are the cases of medical supply business. Frankly, I am not sure which drugs’ prices have been inflated and how much. How can I prescribe medicine of Huons, for instance, for patients when I cannot trust the whole process?”

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