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New Anti-Rebate Legislation in South Korea

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Abstract

The South Korean Government recently announced a reform in the drug anti-rebate law, with the purpose of eradicating pervasive, unethical, and illegal rebate practices in pharmaceutical marketing. The main objective of this reform is to have the ability to bring criminal charges against doctors and pharmacists for receiving illegal kickbacks from drug companies. Previously, provision of illegal kickbacks by drug companies led to criminal punishment of the drug companies alone, leaving doctors and pharmacists unpunished as the recipients. With the introduction of the “Dual Punishment System (DPS)” reform, criminal punishment for illegal rebates is extended to those receiving illegal kickbacks. Although bitter controversy erupted among stakeholders when the reform was first drafted, a civic group participated in the reform process and effectively influenced the legislative process to a successful end. Some interim outcomes from the DPS in terms of bringing illegal practices to account have already been reported since the policy’s implementation in November 2010. The reform background, goals, potential issues, and policy implications are explored in this study with the objective of providing further insight into drug policy for other countries that face similar challenges in the area of drug marketing.

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Notes

  1. Drug-related rebates come in various forms. Some rebates are legally authorized while others are against the law. For example, in a risk-sharing scheme within a drug reimbursement system, rebates in the form of payback to payers are legally approved and are often even required. However, rebates in the form of covering expenses of academic conference participation, providing material gifts or discounts, and supporting various events organized by prescribers, dispensers, and medical institutions, are considered unethical and illegal by the Pharmaceutical Affairs Acts. The rebates that are the subject of this study are the illegal ones.

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Acknowledgments

The study was conducted and prepared without any source of funding. The work presented here was carried out by collaboration of all authors; Yang B and Yu S defined the research theme, Yu S is the guarantor for overall content, while Yu S and Kim J collected the data and interpreted the results. All authors contributed to writing of the manuscript and have no conflicts of interest that are directly relevant to the content of this article. The opinions expressed in this manuscript are those of the authors.

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Authors and Affiliations

  1. Graduate School of Public Health, Seoul National University, Seoul, Korea

    Su-Yeon Yu & Bong-Min Yang

  2. School of Nursing & The Research Institute of Nursing Science, Seoul National University, Seoul, Korea

    Jin-Hyun Kim

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  1. Su-Yeon Yu
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  2. Bong-Min Yang
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  3. Jin-Hyun Kim
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Correspondence to Bong-Min Yang.

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Yu, SY., Yang, BM. & Kim, JH. New Anti-Rebate Legislation in South Korea. Appl Health Econ Health Policy 11, 311–318 (2013). https://doi.org/10.1007/s40258-013-0029-x

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