Prosecutors have indicted six botulinum toxin (BTX) manufacturers - Medytox, Hugel, Pharma Research Bio, Jetema, Korea BNC, and Korea BMI - for allegedly selling BTX injections without authorization.

According to the Seoul Western District Prosecutors' Office on Wednesday, the prosecutors indicted the six manufacturers and 12 former and current employees for allegedly selling BTX to domestic exporters without national lot release approval from the Ministry of Food and Drug Safety (MFDS) from December 2015 to December 2021.

Under the local law, biological agents requiring special health and hygiene attention, such as BTX and vaccines, must receive separate national lot release approval from the MFDS before a company sells them, even after receiving marketing approval.

The national lot release approval is a system that obligates the makers of medical products to acquire the government's quality checks, such as tests and document reviews, before selling them on the domestic market. Except for some export-only pharmaceuticals, all products for local use must win lot release approval. 

The case began when the MFDS revoked the product approval of the BTX products of the six companies after judging that their supply of BTX to domestic trading companies was mainly for domestic sales rather than exports.

The prosecution agreed with the MFDS and said when pharmaceutical companies hand over drugs to exporters, the sale is complete, which requires national lot release approval.

"An exporter paid the pharmaceutical company for the drugs and did not inform the pharmaceutical company whether the drugs would be resold domestically," the prosecutor's office said. "Therefore, the transaction was not part of the export process but rather the sale of the drug by the pharmaceutical company to the exporter."

Also, the six pharmaceutical companies did not verify whether their BTX products were indeed exported after they transferred them to the distribution companies, the prosecutors added.

The BTX makers, however, have been arguing that the paid transfers to Korean exporters were part of the export process and did not require national lot release approval.

In response to the prosecution's announcement, Hugel issued a statement saying, "We believe that the prosecution's indictment is based on a different legal conclusion regarding indirect exports, and we are actively defending our position through the legal process."

Although the other five companies did not offer comments, they seem to share similar positions, industry watchers said.

Some industry officials have called for a precedent to prevent similar cases in the future.

"The price of products exported to China through unofficial routes is so high that companies are tempted," said an industry insider. "Since the MFDS has judged that the current practice is illegal, they should correct the practice after the court makes a final ruling on the matter."