The government would toughen the criteria for corporate social responsibility and ethics in certifying innovative pharmaceutical companies, checking whether corporate executives were involved in any sex crime.

The Ministry of Health and Welfare said Wednesday it would put to public notice an amendment to the “Regulations on the certification of innovative Pharmaceutical Companies” until April 3. The move is aimed to improve social responsibility and ethics of pharmaceutical companies, it added.

Under the revised law, the government will not grant a certification for three years, or revoke it, if a drugmaker’s executives (directors and auditors under the Commercial Law) engage in embezzlement, bribery, and stock price manipulation, or commit seriously unethical acts such as assault, insult, and sex crime against subordinate employees.

For those recognized as innovative firms, the ministry will apply the previous rules to their actions before the date of the administrative notification. If they need a re-evaluation of the certification, the ministry will apply the revised notice.

Meanwhile, the ministry eased rules on rebates.

In canceling the certification, the government lowered the threshold of the amount of rebate to 5 million won ($4,700) from 20 million-600 million won (before the application of certification) and 5 million-10 million won (during the application). The government can revoke the certification if the company engage in rebates two times or more, instead of the three times or more previously.

Also, in the case of cancellation of certification, the drugmaker will not be able to receive certification for three years. However, in the succession of an innovative pharmaceutical company, the ministry will exclude successor’s violations from the certification criteria.

"We commissioned a study to revise the rules. During the preliminary public notice period, we will collect opinions from related agencies, hold a briefing session for pharmaceutical companies on March 22-23), and go through the review of the pharmaceutical industry supporting committee. Then, we’ll issue the final notice in April,” a ministry official said.

The ministry will apply the revised notice to the re-evaluation of innovative pharmaceutical firms until June, and the new certification from the second half, the official added.