More steps to cut down kickbacks to doctors

Social Affairs

Published: 08 May. 2012, 21:26

More steps to cut down kickbacks to doctors

A joint government investigation revealed yesterday that pharmacists, drug firms and medical appliance firms are still deeply involved in paying kickbacks to doctors to use their products, despite efforts to root out the practice.

The Ministry of Health and Welfare is considering freezing kickback-paying drug firms from the health insurance system as well as disclosing the names of companies that pay kickbacks and doctors who receive them above a certain sum.

“We will come up with amended bills of the country’s Pharmaceutical Affairs Act, Medical Act and Medical Appliances Act and submit them to the National Assembly this year,” said Jung Kyung-shil, an official from the health and welfare ministry.

The government is also considering heavier punishments over kickbacks, or rebates.

Drug companies’ expenditure on rebates has long been blamed for the country’s high medicine fees, which places a heavy burden on the government’s budget, as the national health insurance system covers 70 percent of the costs of medicine.

In 2010, the National Assembly adopted a so-called “double punishment system” in which givers and takers of kickbacks are liable to two years in prison or fines of up to 30 million won ($26,430). Now it’s planning additional fines for repeat offenders.

A joint investigation by the health ministry, Fair Trade Commission, the prosecution and police showed that from January 2011 to April 2012, 2,919 doctors, 2,340 pharmacists, and 54 drug firms, wholesalers and medical appliance firms were caught giving illegal rebates.

The ministry said that because the government cracked down on the industry last year, kickback methods have become more creative.

The joint investigation found that the chief executive of a local pharmaceutical firm was charged this year for allegedly offering 1.03 billion won worth of rebates to 340 pharmacists and doctors.

The head of a drug wholesaler was fined for covering 33 million won leasing fees on one doctor’s BMW. Last year, several drug firms were found to have offered 858 doctors 50,000 won for each two-page survey they answered related to a particular illness, claiming it was market research. The probe also found that some pharmaceutical companies paid money to marketing and advertisement agencies to give publicity to certain hospitals that bought their drugs.

By Lee Eun-joo [angie@joongang.co.kr]