155 doctors indicted for taking bribes off Dongwha

More than 150 doctors have been indicted for receiving kickbacks from Dongwha Pharmaceuticals in exchange for prescribing the company’s drugs to patients, an investigation team led by the Seoul Western District Prosecutors’ Office said Sunday.

Prosecutors also brought formal charges against Dongwha Pharmaceuticals; the 49-year-old head, surnamed Lee, of Dongwha’s sales department; and the 50-year-old CEO, surnamed Seo, of a marketing agency.

Lee and Seo have been indicted without detention for violating the Pharmaceutical Affairs Law, authorities said Sunday, adding that the two are responsible for providing more than 5 billion won ($4.5 million) worth of rebates to doctors from 923 hospitals and clinics nationwide.

The 155 doctors were also indicted without detention and will be charged with violating the Medical Law for receiving between 3 million won to 30 million won each from Dongwha.

Authorities said they have requested that the Ministry of Health and the Ministry of Food and Drug Safety suspend the business operation licenses of the involved parties, including Dongwha, clinics and hospitals.

Pharmaceutical companies in Korea are often busted for pulling off schemes similar to Dongwha’s, but prosecutors said the most recent case involves a “new trick” because the rebates weren’t entirely offered in cash.

Instead, the investigation has shown that Dongwha bribed doctors by buying them studio apartments, going so far as to pay deposits for leases, rents and maintenance fees.

“It’s the first time that a pharmaceutical agency has been busted for paying [doctors’] rents in an illegal rebate case,” said Lee Seong-hee, a prosecutor who led the probe, on Sunday.

“The scam is a far cry from the past customary practice of funneling money through doctors’ bank accounts.”

Dongwha also enticed doctors with Louis Vuitton purses, prosecutors said Sunday, pointing to a case in which the company bought luxury bags for 29 doctors who sold more than 1 million won worth of medicines monthly.

Of the more than 5 billion won worth of rebates uncovered, the marketing agency led by Seo was responsible for sending 4 billion won to doctors on behalf of Dongwha, prosecutors continued.

Dongwha had not issued a statement on the case as of press time Monday.

BY CHO HYE-KYUNG [selee@joongang.co.kr]