Bribes tarnish drug industry

In an effort to fight the chronic bribery, 10 major local pharmaceutical companies discussed possible solutions and measures at a resolution meeting yesterday, according to the Korea Pharmaceutical Manufacturers Association.

Big names in the domestic industry including Dong-A Pharmaceutical, Yuhan Corporation, Hanmi Pharmaceutical Company and Daewoong Company allegedly participated.

The gathering was called because local pharmaceutical companies are currently sailing through rough seas. Several drug firms are under investigation for offering bribes to doctors and pharmacists in return for prescribing their medical products.

Kwang Dong Pharmaceutical Company, one of the nation’s largest drug companies, was recently disciplined by the Free Trade Commission in Korea for trying to bribe 1,700 hospitals and public health doctors, according to the Korea Pharmaceutical Manufacturers Association.

Prosecutors are currently investigating several other pharmaceutical companies that may have offered bribes in various forms such as taking medical doctors on free golf trips.

Auh June-sun, the president and CEO of Ahn-Gook Pharmaceutical Company and also the head of the KPMA, is also suspected for giving bribes, according to the Fair Trade Commission.

Auh pledged in his inauguration speech in March that he will try to root out illegal practices.

“The spread of excessive bribes over the years has caused the public to have many distrust of the overall domestic drug industry,” he said at the inauguration.

According to the Anti-Corruption and Civil Rights Commission, local pharmaceutical firms set aside around 20 percent of their annual revenue for bribes to doctors and pharmacists. The bribes account for up to 25 percent of drug prices.

Auh suggested during his speech that money set aside for bribery should be spent on research and development.

In fact, the Welfare Ministry recently predicted that drug firms will save up to 420 billion won ($336 million) a year by not offering bribes.

Clearing up the industry is easier said than done, it seems.

“Bribing doctors and pharmacists is widely considered a tradition among many domestic drug firms,” said an industry official.

The government said in March it is planning legislation that would establish legal grounds for punishing pharmacies and revoking doctors’ licenses if they are found guilty of involvement in the practice. Auh also said in March that stronger measures and laws should be enforced.

Currently, doctors lose their licenses if they are accused of receiving bribes on three occasions, but drug firms argue that laws should be strong enough to punish offending doctors for just one offense.

“Transparency is needed in this industry in Korea,” said Juergen Koenig, president and managing director of Germany-based Merck’s local operation, last month at a press conference. All stages from manufacturing drugs to dispensing dosages should be transparent, he said.

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