'Adding CSO' to the target of rebate penalty

Expanding the scope of drug suppliers

The purpose is to eradicate illegality by reducing the blind spot of the Pharmaceutical Affairs Act

A revision of the law is being promoted so that not only pharmaceutical companies that gave rebates to doctors and pharmacists, but also the Contract Sales Organization (CSO) that they delivered on their behalf, can be directly punished for violating the Pharmaceutical Affairs Law.

 

It is to clarify the grounds for administrative disposition in case of illegal detection by including the pharmaceutical CSO in ‘Article 47 (Order in Distribution of Drugs, etc.) of the Pharmaceutical Affairs Act)’.

 

On the 12th, Jung Choun-sook, a member of Democratic Party of Korea said in a phone call with Dailypharm that he plans to initiate a representative proposal next week as soon as possible on the revision of the Pharmaceutical Affairs Law.

 

On the 8th, at the parliamentary inspection of the administration of the Ministry of Health and Welfare, she spoke to Minister Park Neung-hoo about the illegal rebates through CSOs of some pharmaceutical companies.

 

Despite the fact that CSO is being abused as a place to provide new rebates, contrary to its basic purpose, it is criticized that the legal basis for punishment is insufficient due to the blind spot of Pharmaceutical Affairs Law.

 

CSO was originally created to act as an agent for legal sales such as promotion of drug sales for pharmaceutical companies and to help pharmaceutical companies focus on new drug development.

 

However, some pharmaceutical companies are exploiting CSOs by offering variant rebates because CSO is not considered a 'drug supplier' subject to a ban on rebates under the Pharmaceutical Affairs Act.

 

According to the data submitted by the MOHW to her, it was unable to properly determine the current status of the number of CSO companies currently operating.

 

In a survey of some pharmaceutical companies last year, only statistics were obtained that 27.8% of the 464 responding pharmaceutical companies were consigning sales.

 

The MOHW said that there was only one illegal rebate through CSO, but this is also not an accurate statistics.

 

Specifically, a pharmaceutical Company was prosecuted in 2018 on charges of providing rebates worth about ₩1.6 billion to a number of medical professionals with CSO and pharmaceutical wholesalers from 2013 to 2017.

 

As a result, both executives and employees of pharmaceutical companies and CSO's CEO were notified of disposition for violating the Pharmaceutical Affairs Act.

 

She is preparing an amendment to the Pharmaceutical Affairs Act that extends the provisions prohibiting the exchange of rebates so that CSO can't do anything related to rebates.

 

This is a method of adding 'a person who has received drug business consignment from a pharmaceutical company or other business processing consignment' to the scope of drug suppliers in the Pharmaceutical Affairs Act.

 

She said, "We will create a legal basis to directly punish those who act as pharmaceutical companies such as CSO through illegal rebates." In addition, she explained, "The scope of administrative disposition includes CSOs and wholesalers, thereby enhancing the eradication of illegality and the completion of the Pharmaceutical Affairs Act."