Bad practices die hard. For example, you need not look further than the kickbacks pharmaceutical companies give to doctors and pharmacists in return for prescribing their medicines.
To root out this deeply entrenched corrupt practice, the government revised the law in November last year. It made doctors and pharmacists, as well as pharmaceutical companies, subject to punishment when found to have been involved in illegal deals.
Under the amended laws, doctors and pharmacists who receive illegal money from drug companies risk license suspension for up to 12 months. For third-time offenders, the penalty is severe ― license revocation.
Officials of the Health and Welfare Ministry hoped this strengthened punishment would put an end to the kickback culture in the medical community. In reality, it only led pharmaceutical companies to use more devious methods to avoid scrutiny.
The persistence of rebates was recently brought to light by a scuffle among doctors at the Kyung Hee University Medical Center. According to news reports, doctors at the hospital’s respiratory department exchanged blows over the distribution of kickbacks. The amount of money involved exceeded 500 million won, leading many to wonder about the magnitude of the bribes pharmaceutical companies provide to doctors and pharmacists.
The ministry estimates drug producers spend more than 2 trillion won a year in kickbacks, about 20 percent of their total annual revenue. These kickbacks are translated into an increase in health care costs, putting a strain on the national health insurance system.
Recently, Health and Welfare Minister Im Chae-min proposed to further toughen penalties against unethical drug companies, doctors and pharmacists. For pharmaceutical firms, he plans to introduce a “one strike and you are out” rule.
Currently, when a drug company is found to have provided kickbacks to promote the sales of its product, it is forced to cut the price of the product by 20 percent. The minister’s proposal calls for removing the product from the redemption list of the National Health Insurance Corp., which effectively means an exit from the market.
For doctors and pharmacists, Im plans to apply a “two strikes and you are out” rule, which means revoking the licenses of two-time offenders.
Before revising the laws, Im plans to have doctors, pharmacists and pharmaceutical companies sign a social pact and declare voluntary efforts to stay away from the disgraceful kickback culture. Yet a social pact of this type rarely works in Korea. If the minister wants to terminate the unwholesome practice, he may have to apply the one-strike-and-you-are-out rule to doctors and pharmacists as well.