The Ministry of Health and Welfare has ordered the suspension of reimbursement for pharmaceutical products of Dong-A ST and a 13.8 billion won ($12.1 million) fine, accusing it of bribing physicians to sell drugs.
The administrative order involves the suspension of reimbursement for 87 products, including hepatitis drug Hepsevir Tab. 10mg, for two months from June 15 to Aug. 14, and a fine of 13.8 billion won on 51 other medicines.
The ministry’s move came after Busan District Prosecutors’ Office’s indictment of Dong-A ST for offering 5.47 billion won worth of illegal rebates to doctors to promote 162 medicines from August 2009 to March 2017.
On Dong-A ST’s assistant agents for anticancer therapies, the ministry decided to impose a penalty rather than a reimbursement suspension due to concerns for patients’ reactions to medication changes.
The ministry granted three months of grace period before the suspension of reimbursements so that medical institutions could purchase substitute drugs and apply them to the electronic system.
Under the National Health Insurance Act, the government orders the suspension of reimbursement over a drug involved in a bribery case but replaces it with a penalty if the medicine has no other alternative.
Out of the 162 drugs subject to the administrative discipline, the ministry ordered a penalty against one orphan drug and 12 other medicines with no substitute.
The total amount of penalties is 13.8 billion won, which was 20 percent of the total reimbursements at 68.9 billion won given to the company for the prescriptions of 51 treatments, including an orphan drug, for the past year.
To minimize the impact on patients who use Dong-A ST’s 87 drugs suspended from getting insurance coverage for two months, the ministry asked pharmacies and hospitals to prepare alternative medicines and reflect them on the electronic system.
“We will sternly deal with illegal rebates and punish both the recipient and the giver strongly. We will enhance punishment against bribery by working closely with other related agencies,” an official at the health and welfare ministry said.
Dong-A ST, however, said it would file an administrative suit against the ministry’s ruling.
“We do not deny breaching the Pharmaceutical Affairs Act,” it said. “However, there are a considerable number of debatable issues in the administrative order. We will apply for the suspension of the execution of the order and file an administrative suit.”
The company said that it would actively appeal the “unfairness and irrationality” of the administrative punishment. “We will make sure that there will be no damage to medical institutions and patients who have been taking our medications for a long time,” it added.
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