Two officials at Health Insurance Review and Assessment Service (HIRA) are suspected of receiving bribes from pharmaceutical companies for registering the latter’s products as new drugs covered by insurance payment.
Earlier the year, the Busan District Prosecutors’ Office raided HIRA and some pharmaceuticals, including Huons and LG Chemical (formerly LG Life Sciences), and there were words within the industry about suspected kickbacks between HIRA and these companies, which have now proved true, industry watchers said Monday.
It is the first time HIRA officials, incumbent or former, face legal punishment on corruption charges since the agency's inception nearly three decades ago.
The prosecutors said they arrested and indicted a former HIRA official surnamed Choi, who concurrently serves as the dean of a medical college, for breach of trust and giving bribes. They also booked a standing member of the service, surnamed Kim, without physical detention. Kim is on charge of bribery, receiving money from Choi and giving him inside information concerning the registration of new drugs.
Choi worked as a standing member of HIRA and a nonstanding member of the Drug Reimbursement and Evaluation Committee. According to prosecutors, Choi allegedly received 100 million won ($88,400) worth of bribes in the form of cash and payments at bars, massage parlors and golf courses between January 2014 and 2015. In return, he delivered information related to new drug registration to pharmaceutical firms.
Even after quitting the job, Choi received “performance fees” from drug makers for setting drug prices at higher levels than normal for larger insurance coverage. For instance, he set a new drug price with unit cost of 140won at more than 400 won, the prosecutors said. In the process, Choi gave 6 million won to Kim for providing information on new drugs and registering medical coverage for them. HIRA will remove Kim from his post Wednesday.
The prosecution has also found that Choi, while serving as a non-standing member of the drug evaluation panel, helped his university receive orders for research service worth 410 million won from four pharmaceutical firms. But the law enforcement officers exempted the drug makers from indictment, as the irregularities occurred before May 29, 2016 when they introduce the rule in the criminal law to punish the third-party for breach of trust and bribery.
Choi, a graduate of a local pharmacy college, also worked as the chief druggist at a hospital and an executive at a large pharmaceutical company. Kim, who took bribes from Choi, served as the vice president of a multinational pharmaceutical company and a surgeon at a hospital.
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