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Over 100 hospitals received illegal rebates from drug suppliers
  • By Kwak Sung-sun
  • Published 2018.07.19 11:23
  • Updated 2018.07.19 11:23
  • comments 0

The prosecutors said more than 100 hospitals have been found to have received kickbacks from a parenteral nutrition (PN) products maker, its contract sales organization (CSO), and a wholesaler. The hospitals used the money for operational expenses in their medical and pharmaceutical departments.

The Seoul Western District Prosecutor's Office said it booked the drugmaker’s CEO and two other executives, the head of the CSO, the wholesaler’s representative and three employees, and 101 physicians. Among them, 83 have been indicted without detention.

The government’s “joint team for investigating medical rebates” under the prosecutor’s office on Wednesday announced the results of the months-long probe into the pharmaceutical firm specializing in selling PN products.

According to the prosecutors, the company, its CSO, and the wholesaler bribed doctors at the hospitals with cash, corporate cards, and prepayment for restaurants and cafes from 2013 to 2017. The illicit money helped the drugmaker promote the sales of its products.

The pharmaceutical firm, whose identity was not disclosed, was established in 2003. It manufactures and sells 20 billion won ($17.7 million) worth PN products every year. The total medical rebates it provided for hospitals, including the CSO’s contribution, amounted to 1.1 billion won. The wholesaler offered about 500 million won worth kickbacks.

From 2009 to 2017, the drugmaker’s salespersons and CSO staffs also gave 400 million won worth rebates to executives of the wholesaler, asking their illegal help to supply new drugs.

By the amount of rebate per case, there was one case where more than 50 million won was offered as an illegal rebate. Two cases were between 30 million won and 50 million won each. Eleven cases were between 10 million won and 30 million won each.

The prosecutors said they would request the Ministry of Health and Welfare and the Ministry of Food and Drug Safety to take administrative measures against the drugmaker and rebate recipients. The punitive measures will include the price cut of the products, discontinuation of insurance benefits, summary suspension of the physicians’ medical licenses, and suspension of the drugmaker’s business.

“The Seoul Western District Prosecutor's Office began investigating the case in January. We have not yet received the request for administrative orders yet,” said Shin Je-eun, a section chief at the health and welfare ministry’s pharmaceutical policy division. “The Korea Pharmaceutical and Bio-Pharma Manufacturers Association is also reviewing CSOs. We will share the results and utilize them later.”

“As the latest illegal rebates are associated with operational expenses, the ministry will discuss with the Korean Medical Association, the Korean Hospital Association, and the Korean Academy of Medical Sciences how to regulate such rebates for operational fees, Shin added.

kss@docdocdoc.co.kr

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