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Seoul may suspend insurance payment for some Novartis productsFirst case of introducing two strike out rule against illegal rebate 
  • By Kwak Sung-sun
  • Published 2017.03.24 18:30
  • Updated 2017.03.28 18:55
  • comments 0

Novartis Korea may have to sell some of its medicines without insurance coverage. The suspension of insurance payment can mean a fatal blow to a drugmaker operating in Korea, which implements national healthcare system. Prosecutors have indicted the company for providing the rebate of 2.6 billion won ($2.3 million) to doctors in August under the pretext of academic events, and the trial is underway.

The Ministry of Health and Welfare (MOHW) said Thursday it is considering suspending insurance benefits to some Novartis products, in addition to the existing penalties of sales suspension and fine payment imposed earlier by the Ministry of Food and Drug Safety (MFDS). The health-welfare ministry is examining 42 Novartis products for additional sanctions, ministry officials said.

Out of the 42 Novartis products involved in the rebate scandal, MFDS recently imposed fines of 200 million won ($178,500) on 33, equivalent to the sales suspension of three months, and suspended the sales of nine others for three months. MOHW’s move to stop insurance coverage is also based on the MFDS’s earlier measure. It excluded asthma therapy Xolair injection from the list because the drug is not subject to medical insurance in the first place.

Among the remaining 41, MOHW is considering imposing fines on 23, including Galvus, Onbrez, Certican and Afinitor, instead of excluding them from insurance coverage because they have no generic products. The ministry is considering suspending insurance benefits for the other 18 products, including Exelon and Zometa, as they have generics.

It is the first time MOHW considers the suspension of insurance coverage since it introduced the two strike out system concerning rebates in 2014. Under the system, regulators exclude violating products from insurance benefits for one year. If a product gets caught twice for its maker giving rebates, officials will erase it from the list of insurance benefits for good.

“We are analyzing Novartis data jointly with Health Insurance Review and Assessment Service (HIRA) and will carefully make a decision based on the related rules,” a ministry official said. “We are also thinking how to inform the decision once we decide to punish them additionally. It's hard now to predict exactly when we can complete the process.


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