Medytox wins court battle against regulator over BTX license revocation

The first trial of the botulinum toxin (BTX) license revocation case between Medytox and the Ministry of Food and Drug Safety (MFDS) ended with a victory for Medytox.

The Daejeon District Court ruled in favor of Medytox in the first sentencing hearing of the BTX license revocation administrative lawsuit filed by Medytox against the MFDS on Thursday.

The case started when the MFDS deemed Medytox's practice of "indirect export" of BTX to be illegal domestic sales as it did not receive a separate national lot release approval process in 2020.

Biopharmaceuticals currently sold domestically must go through a separate national lot release approval process to check for adulteration and foreign substances.

Still, Medytox engaged in "indirect export" by selling its BTX products to local distributors without getting a lot release approval.

As a result, the MFDS revoked the product license for all units of Meditoxin and Coretox, which led Medytox to file an administrative lawsuit against the decision, arguing that indirect exports do not constitute domestic sales.

"The court revokes MFDS' product license revocation decision for Meditoxin and Coretox and also the order to stop sales, recall, and destroy such products," the court said in a ruling. "The defendant (MFDS) will bear the full cost of the lawsuit."

Medytox welcomed the decision stressing that the ruling frees the related products from the revocation, and the company will focus on enhancing its brand image and achieving normalization as soon as possible.

"Medytox, which is the first BTX developer in Korea, will establish a system that meets global standards to prevent such issues from occurring again," a Medytox official said.

The MFDS said it was waiting for the written sentencing, refusing to comment on the matter. 

MFDS, BTX industry continue to clash over indirect export of BTX

Meanwhile, the indirect export controversy that began with Medytox has been expanding to various BTX makers.

In 2021, the MFDS made the same allegations against Hugel and PharmaResearch Bio, and their respective products were revoked.

In 2022, the MFDS again found that three companies - Jetema, BMI Korea Aesthetics, and BNC Korea- sold their BTX in Korea without national export approval and issued administrative penalties, including revocation of product licenses and orders for recall and destruction.

In November 2022, the MFDS launched an investigation against major domestic BTX companies for allegedly indirectly exporting their BTX.

In March this year, prosecutors indicted six companies, including Hugel, Medytox, PharmaResearch Bio, Jetema, BMI Korea Aesthetics, and BNC, and 12 employees on charges of violating the Pharmaceutical Affairs Act for transferring BTX preparations to domestic exporters for a fee.

Most recently, the MFDS recently decided to nullify the license of Huons BioPharma's BTX preparation Liztox 100 units from July 18.

The MFDS has imposed a six-month suspension on the company's manufacturing operations, along with a recall and destruction order for the drugs in circulation to prevent the use of BTX. Additionally, medical institutions storing the products have been requested to return them.

The regulator said Huons BioPharma's violations included the sale of drugs that did not receive national export approval under the Pharmaceutical Affairs Act, as well as violation of the obligation to label in Korean.

In response to the MFDS' decision, Huons BioPharma said that indirect export is a trade method recognized by the Foreign Trade Regulations.

"Even if a drug is exported through a domestic trading company, it is considered a drug for export and is not subject to the Pharmaceutical Affairs Act," a Huons BioPharma official told Korea Biomedical Review. "The Korea International Trade Association (KITA), which is affiliated with the Ministry of Trade, Industry and Energy, has also recognized the indirect export of drugs as an export for a considerable period of time."

The company emphasized its commitment to taking all necessary legal actions, including appeals, asserting that the measure imposed by the MFDS for its indirect export of BTX is "illegitimate and unfair."

Controversy expands to legal actions

The MFDS' actions have led Hugel, Medytox, PharmaResearch Bio, Jetema, BMI Korea Aesthetics, and BNC to undergo legal measures against the MFDS over the interpretation of the Pharmaceutical Affairs Act.

They argued that the paid transfers to Korean exporters were part of the export process and did not require a national lot release approval.

The ministry's ongoing series of license revocations in the BTX industry will eventually stifle the growth of the industry, they said.

"For biopharmaceutical companies, sanctions by national regulators are a major blow to their credibility," an industry official told Korea Biomedical Review. "These situations will have a negative impact on the K-bio sector as the industry as a whole is actively trying to expand overseas thanks to the recent expansion of BTX's non-cosmetic indications."

It is very unfortunate that the regulatory authorities' excessive claims are leading to a shrinking market for Korean drugs, he added.