JW Pharma confronts a potential 30 Billion Won ($21 million) fine amid allegations of unlawful rebates

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On Thursday, the antitrust regulator announced a hefty fine of 29.8 billion won (approximately US$21.93 million) for JW Pharmaceutical, a domestic pharmaceutical company, for allegedly offering unlawful incentives to local medical clinics. The company is accused of providing cash, gifts, and other perks totaling 6.5 billion won between 2014 and 2018 to approximately 1,400 hospitals and clinics across the country in exchange for prescribing its products. Additionally, it allegedly offered economic benefits worth 530 million won to around 100 clinics during the same period to encourage the use of its products.

The antitrust regulator also suspects that JW Pharmaceutical attempted to conceal these illicit activities and has reported the case to the prosecution for further investigation. The CEO, Shin Young-sup, is facing a prosecution investigation for his alleged involvement, and the company has been ordered to implement corrective measures. Notably, this fine is the largest ever imposed by the regulator on a local pharmaceutical firm due to JW Pharmaceutical’s systematic and intensive use of rebates.

It’s worth mentioning that JW Pharmaceutical had previously faced punitive measures from the regulator in 2007 for similar unfair practices, which contributed to the severity of this latest decision. The regulator’s stance is that offering unfair economic benefits to doctors can distort the market by influencing their drug choices based on personal gain rather than the best interests of patients, and the substantial fine is seen as a measure to uphold fair trade principles in the pharmaceutical market.

In response to the decision, JW Pharmaceutical stated that the regulator’s judgment appeared unbalanced compared to similar cases involving other companies and vowed to pursue administrative litigation after a detailed review.

(Source: Oh Seok-min | Yonhap News Agency)

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