MSD vs Medihelpline PMS contract dispute goes on trial

“Refund claim lawsuit” vs. “subcontract dispute mediation request”

“Payment should be based on actual cases performed” vs. “this is pure abuse of power… the contract must be honored as written”

A legal battle is looming between multinational pharmaceutical company MSD Korea and CRO firm Medihelpline over payment disputes related to a PMS outsourcing contract.

 

According to Dailypharm coverage, MSD recently filed a lawsuit against Medihelpline, demanding the return of part of the advance payments made under a PMS outsourcing contract.

 

However, the complaint was returned due to the recipient’s absence.

 

Prior to this, Medihelpline had filed a “subcontract dispute mediation request” with the Subcontract Dispute Mediation Council of the Korea Trade Mediation Agency, claiming that MSD failed to pay approximately KRW 1.5 billion in subcontract fees.

 

In other words, both sides are insisting that the other is responsible for the unsettled payments under the same outsourcing contract.

 

PMS (Post-Market Surveillance) refers to the system of collecting data from 600 to 3,000 patients over four to six years after a new drug is launched, to report the usage results to the Ministry of Food and Drug Safety (MFDS).

 

Medihelpline’s role under the contract was to visit medical institutions prescribing MSD’s drugs, collect PMS data, and prepare submission documents for the MFDS, in return for payment.

 

Such outsourcing contracts are extremely common and are conducted countlessly in the pharmaceutical industry.

 

The dispute can be summarized as follows: Between 2017 and 2022, the two companies entered into outsourcing contracts to conduct PMS for seven of MSD’s products, known collectively as the “MK Family.” Out of these, PMS services for 3 products were carried out smoothly.

 

The problem arose with the remaining 4 products, where execution was insufficient.

 

Among them were products that MSD had abandoned, and at the time, Medihelpline was also struggling with mass staff layoffs, making normal operations difficult.

 

The conflict surfaced during the settlement process for this contract.

 

According to the settlement data Medihelpline submitted in the first half of 2025, the work the company did for the 3 products exceeded the estimated amounts based on actual cases, meaning MSD owed an additional KRW 530 million.

 

MSD accepted and agreed to this.

 

The ‘estimated amount’ refers to the figure set at the time of the initial contract, since the exact number of actual cases cannot be predicted in advance due to the nature of PMS contracts.

 

In other words, PMS projects inherently involve significant variability.

 

However, for the four products where execution was lacking, the services naturally fell well short of the estimated amounts.

 

MSD expressed its intent to settle payments based on the actual number of cases performed.

 

Medihelpline rejected this, insisting that settlement should be based on the estimated figures stated in the original contract.

 

Issue 1: Estimated amounts in the contract vs.

 

the unique nature of PMS agreements The dispute centers on two key points: whether payments should be made for actual work performed or strictly according to the contract's estimated figures, and to what extent the contract allows for flexibility in dealing with the inherent variability of PMS projects.

 

Medihelpline argued that this dispute represents “abuse of power over a subcontractor in a hierarchical relationship,” and stated, “If MSD simply pays according to the original contract, there would be no issue.

 

We will fight this to the end.” Thus, the key issue becomes whether it is valid for a PMS outsourcing contract between a pharmaceutical company and a CRO to be settled based on the estimated figures written in the contract.

 

MSD’s stance is “No.” According to the company, the core of PMS is tracking the outcomes of individual patients’ treatments, and outsourcing contracts are by definition based on the number of cases.

 

The estimated figures in the contract are merely references to approximate the expected scale at the outset, written with the understanding that settlement would be based on actual cases.

 

In fact, Medihelpline demanded an additional KRW 530 million beyond the estimated amounts specified in the contract for 3 successfully completed products, citing extra costs incurred from conducting sub-analyses of the collected data.

 

Medihelpline also informed MSD in November 2023 that the advance payments it had already received exceeded the actual work performed by KRW 800 million KRWand requested suspension of further advance payments as well as offsetting against payments for other projects.

 

Medihelpline sought extra payment for over-fulfilled work and requested suspension where less was done, implicitly acknowledging the contract's case-based nature.

 

An MSD representative stated, “This is not the first time we’ve worked with Medihelpline on PMS outsourcing.

 

In all past contracts, settlement has always been based on actual cases performed.

 

The advance payments for the 4 projects clearly exceed the services delivered.

 

We filed the refund claim lawsuit not merely to recover the advance, but to put an end to the CRO’s accusations and this settlement dispute through civil litigation.” In response, a Medihelpline representative responded, “The email sent to MSD in 2023 was sent unilaterally by an individual without management’s approval, at a time when the company was experiencing major internal changes, including mass resignations.

 

There is a signed contract, and it is proper to honor it as written.

 

MSD is exploiting a single mistake as a weakness.”

Issue 2.

 

Whether PMS contracts fall under the scope of the Subcontracting Act Another key issue is the Subcontracting Act.

 

Medihelpline claims that MSD Korea’s failure to pay violates Articles 11 and 13 of the Subcontracting Act, and has filed a dispute mediation request with the Fair Trade Commission.

 

The alleged violations are Article 11(2) of the Act, which states that “a principal contractor shall not reduce subcontract payments once agreed upon,” and Article 13, which requires that “when the principal entrusts manufacturing, the subcontract payment must be made within 60 days of receiving the deliverables, or within the shortest period possible.” The Subcontracting Act was established to correct unfair trade practices between large corporations and small or medium-sized enterprises, and to protect subcontractors as the economically weaker party.

 

If Medihelpline’s claims are true and a global corporation like MSD abused its position to exploit a small domestic CRO, then such conduct deserves to be sanctioned.

 

Thus, the issue lies in whether settlement based on actual cases performed in PMS contracts constitutes abuse of power, and whether such contracts fall within the scope of subcontracting arrangements.

 

The law lists specific industries—such as engineering, transportation, construction, and security—as falling under subcontracting, while leaving other activities to be designated by the Fair Trade Commission.

 

Therefore, the customary practices of PMS contracts between multinational pharmaceutical companies and domestic CROs, as well as precedents and the legitimacy of such arrangements, are likely to become key criteria in the court’s judgment.

 

A Medihelpline representative stressed, “The company is facing severe financial difficulties due to MSD’s non-payment along with other factors, and we will confront MSD’s actions head-on beyond the mediation request.

 

We are confident this is a clear violation of the Subcontracting Act.” An MSD representative lamented, “For over a year, we have made continuous efforts to pay costs in accordance with the proper contractual procedures.

 

Nevertheless, Medihelpline has refused to cooperate in settling the service fees, instead making groundless accusations that damage our reputation and credibility.

 

We regret this deeply.”