‘Allowing drug wholesaling via platform creates conflicts of interest’

Ministry of Health and Welfare urges the National Assembly to pass a bill banning DoctorNow-style wholesaling platforms

Joon-Hyuk Kang, “Just as public officials are barred from buying stocks tied to their duties, the same goes to platform wholesaling; it is a conflict of interest”

“Platforms should be viewed as holding influence equivalent to prescribing or dispensing authority”

Joon-Hyuk Kang, Director of Pharmaceutical Policy Division, MOHW

"Just as it is clearly a conflict of interest and therefore prohibited for public officials such as lawmakers and ministers to purchase stocks in sectors related to their official duties, it is equally a clear conflict of interest and should be prohibited for platforms to engage in distribution and sales by also operating as pharmaceutical wholesalers. Doctors, pharmacists, and platforms must fulfill their distinct roles in the telemedicine process, and for this, the amendment to the Pharmaceutical Affairs Act must pass the National Assembly."

The Ministry of Health and Welfare stated that allowing telemedicine platforms to operate as pharmaceutical wholesalers is not a solution to the ‘pharmacy hopping’ crisis.

The Ministry directly challenged the main argument currently being used by some lawmakers and Presidential Chief of Staff Hoon-sik Kang to block the plenary session and processing of the amendment to the Pharmaceutical Affairs Act, which passed the National Assembly's Health and Welfare Committee and Legislation and Judiciary Committee with bipartisan agreement, stating it is factually incorrect. This has drawn intense attention from political circles and the healthcare and pharmaceutical sectors.

Regarding how the bill banning platform wholesalers is commonly referred to as the ‘Doctornow Prevention Act,’ the Ministry stated, “It could easily be misinterpreted as a law banning platform brokerage itself. A more accurate description would be a platform conflict-of-interest prevention bill or a ban on collusion between Doctornow and drug wholesalers,” the ministry said.”

On the 14th, Joon-Hyuk Kang, Director of Pharmaceutical Policy at the Ministry of Health and Welfare, met with the press corps to explain the ministry's position on the delayed plenary processing of the Pharmaceutical Affairs Act amendment proposed by Rep. Yoon Kim of the Democratic Party of Korea, which has already passed both the Health and Welfare Committee and the Legislation and Judiciary Committee review.

Yoon Kim’s bill for the amendment to the Pharmaceutical Affairs Act faces plenary delay due to opposition from some lawmakers across parties and Chief of Staff Hoon-sik Kang.

The Ministry maintains that, to establish a safe non-face-to-face medical environment free from platform dependency for patients, medical institutions, and pharmacies, safeguard a fair pharmaceutical distribution system, and prevent patient medication misuse, both the Medical Service Act amendment institutionalizing non-face-to-face care (already passed by the National Assembly) and the Pharmaceutical Affairs Act amendment banning platform wholesalers require urgent plenary session processing.

Minister of Health and Welfare Eun-kyeong Jeong also strongly expressed her view during the previous Judiciary Committee meeting regarding the platform wholesaler ban bill. She stated that, similar to doctors and pharmacists, the amendment of the Pharmaceutical Affairs Act is necessary to prohibit platforms from abusing their monopolistic position to engage in specific pharmaceutical distribution and sales activities.

Nevertheless, several lawmakers from both major parties, including So-young Lee, Han-kyu Kim, Bo-yoon Choi, and So-hee Kim, argued that “Banning platform wholesaling based solely on concerns over illegal rebates would stifle startup innovation.” Presidential Chief of Staff Hoon-sik Kang also supports these lawmakers’ position.

Doctornow, which positions itself as Korea’s leading telemedicine platform, claimed that “operating a wholesaling business is merely a practical measure to resolve pharmacy hopping” and has actively lobbied against the legislation.

“Allowing platform wholesalers cannot be the solution to the pharmacy hopping issue”

The Ministry of Health and Welfare has fully refuted these arguments from some lawmakers, the Presidential Office, and Doctornow. First, it stated that allowing Doctornow to operate a wholesaler and directly or indirectly intervene in drug distribution and sales cannot be considered a solution to the patient pharmacy hopping crisis.

The MOHW believes the claim that platforms should be allowed to operate as wholesalers to address the issue of patients using telemedicine services having to go from pharmacy to pharmacy due to lack of medication is flawed.

The ministry questioned why resolving pharmacy hopping must necessarily involve allowing platforms to operate as wholesalers, suggesting that this logic itself requires serious reconsideration by policymakers.

While approximately 30,000 pharmaceutical products are distributed in Korea, Doctornow reportedly handles only about 90 products—an imbalance that, according to the MOHW, demonstrates how platform-operated wholesaling could promote illegal or distorted practices.

Director Kang explained, “Allowing platforms to operate as wholesalers won't solve the ‘pharmacy hopping’ issue for pharmacies. If frontline pharmacies could freely share their inventory and stock of medicines via platform apps, the ‘pharmacy hopping’ issue could be resolved.”

Kang added, “With over 30,000 pharmaceuticals circulating in the market, can platforms like Doctornow, which operate wholesalers, distribute, and sell all 30,000 drugs? Currently, Doctornow handles only about. When a specific platform distributes only 90 out of 30,000 drugs, it can distort prescriptions and dispensing at affiliated medical institutions and pharmacies.“

He added, ”But does that mean we should turn the platform into a large wholesaler distributing all 30,000 drugs? This would also create problems in itself. The dual role of platform and wholesaler has clear limitations.“

”Serious conflict of interest issues will arise among large capital platforms if legislation fails"

The MOHW warned that if the bill fails, conflicts of interest arising from platform involvement in drug distribution and sales could spiral out of control.

Beyond Doctornow, larger capital-backed platforms, corporations, or even pharmaceutical companies could collude with platforms to distribute and promote drugs that serve their own interests, the ministry cautioned.

Kang stated, “The purpose of the amendment is not to target a specific company like Doctornow, but to prevent broader conflicts of interest that could lead to medication misuse or collusion. Therefore, the bill needs to be reviewed during the plenary session. Just as public officials are prohibited from purchasing stocks related to their official duties due to conflicts of interest, platform-operated wholesaling presents the same problem.”

He added, “The potential for illegal rebates by platform wholesalers is merely a tool. The core issue is the potential for patient medication misuse or collusion that could arise if conflicts of interest are left unresolved. During non-face-to-face consultations, platforms should only be granted and exercise authority within their specific roles, just like doctors and pharmacists.”

“Platforms hold prescription/dispensing authority equivalent to doctors/pharmacists... reason for wholesaler ban”

The Ministry of Health and Welfare judges that platforms like Doctor Now hold influence equal to or greater than that of doctors holding prescription authority and pharmacists holding dispensing authority in the distribution and sale of pharmaceuticals.

Because physicians and pharmacists are legally prohibited from engaging in wholesaling, the ministry argues that platforms should be subject to the same restrictions.

Director Kang emphasized the urgent need for consensus among the MOHW, the Ministry of SMEs and Startups, and relevant National Assembly committees that platforms can exercise pharmaceutical influence equivalent to healthcare professionals.

Kang said, “The MOHW’s position is that platforms exercise prescribing and dispensing influence comparable to physicians and pharmacists. Therefore, they require equivalent regulatory restrictions, including a ban on wholesaling. The ministry had actually proposed amendments to the original bill to better protect legitimate platform functions, leading to its passage through the Health and Welfare Committee and the Legislation and Judiciary Committee.”

Kang explained, “The original bill defined even the act of posting drug inventory or price information on platforms as patient solicitation and banned it outright. The Ministry views such information provision as a basic platform function and excluded it during the Welfare Committee review. The provision prohibiting pharmacy owners from offering economic incentives to platforms for patient solicitation was also removed. This was because it was difficult to distinguish between legitimate compensation for pharmacy services and other forms of inducement."

He added, “Rather than getting bogged down in peripheral issues like the potential for illegal rebates or the interests of specific companies like Doctornow, I urge politicians and the media to focus on the fact that allowing platforms to operate as wholesalers themselves creates a conflict of interest. We must look toward the passage of the amendment to the Pharmaceutical Affairs Act in the National Assembly as necessary to protect public health in medicines and ensure safe telemedicine.”