Fair Trade Commission Might Expand Rebate Investigation to Hospitals

Korea’s Fair Trade Commission (FTC) announced a plan to investigate not only pharmaceutical companies but also hospitals, if necessary, regarding the pharmaceutical industry’s rebate scandal.

FTC Chair Kwon Oh-seung said on a radio program on Monday, “It could be problematic to talk about pharmaceutical companies without mentioning hospitals and pharmacies (known to have received rebates). After conducting a comprehensive review, we will investigate hospitals as well, if necessary.”

He also said regarding the industry’s opinion that it is not fair to punish them for such a long-standing practice, “I asked representatives of the industry in court, and they said that we gave them the reason to end the practice. They meant that they wanted to stop the practice, and the FTC’s investigation gave them an opportunity to do so.”

He also added, “It is not enough to just impose fines. We are thinking of how to make the industry more competitive institutionally.”

Meanwhile, as for the price regulations that the FTC failed to introduce, Kwon said, “There is evidence in the law, but the enforcement ordinance was not strong enough. We tried to align the enforcement ordinance to the law, but failed due to harsh opposition.”

cha@donga.com