According to the prosecutors, Dongwha Pharmaceutical hired three advertising agencies for marketing purposes for about three years between January 2010 and December 2012 who visited the doctor’s offices under the pretext of a market survey and paid them off after the survey was completed.(image: Kobizmedia/Korea Bizwire)
SEOUL, Dec. 8 (Korea Bizwire) — Dongwha Pharmaceutical, one of the largest drug companies in Korea, was indicted for paying rebates by the billions of won to doctors in exchange for agreeing to give prescriptions with its own drugs. This is the biggest illegal rebate incident since December 2008 when a law making it illegal to pay rebates was passed.
A task force consisting of the prosecutors’ office investigators, health ministry officials, and the national police agency detectives announced on December 7 that it charged the company and two company officials and an advertising agency executive for providing under-the-table money to 923 doctors worth 5.07 billion won. The prosecutors’ office also charged 155 doctors for receiving rebate money ranging between 3 million and 30 million won.
According to the prosecutors, Dongwha Pharmaceutical hired three advertising agencies for marketing purposes for about three years between January 2010 and December 2012 who visited the doctor’s offices under the pretext of a market survey and paid them off after the survey was completed.
Dongwha gave the list of doctors to visit to the ad agencies with amounts of rebate to pay for each doctor’s office. The payments were in a variety of forms including luxury brand wallets and paying some of the doctors’ monthly rent in addition to the usual cash and gift certificates.
The prosecutors demanded to the judges that the charged be given harsh punishments like license suspension or suspension in sale. They also recommended that the current law stipulating a penalty of up to 30 million won is excessively lenient and that it be revised to one imposing higher penalties and jail terms. Established in 1897, Dongwha Pharmaceutical is famous for its indigestion drink “Gas Whal Oral Liquid.”
By Sean Chung (schung10@koreabizwire.com)
