Companies banned from displaying product names on souvenirs

Korea Pharmaceutical and Bio-Pharma Manufacturers Association obtains FTC approval for revised Fair Competition Code

New provisions introduced for companies caught providing illegal support at academic conferences

Pharmaceutical companies are now prohibited from displaying product names on promotional material such as pens and notebooks provided to healthcare professionals at product briefing sessions; only the company name may be displayed.

According to industry sources on the 7th, the Korea Pharmaceutical and Bio-Pharma Manufacturers Association (KPBMA) received Fair Trade Commission approval for the 5th revision of its ‘Fair Competition Code for Pharmaceutical Transactions’ and ‘Detailed Operational Standards for the Fair Competition Code.

Among the newly added provisions, the scope of promotional items provided to healthcare professionals has been more clearly restricted.

Previously, during product briefings conducted during visits to individual medical institutions, pharmaceutical companies were permitted to provide healthcare professionals with food and beverages, as well as low-value promotional items bearing either the company name or product name.

Under the revised rules, companies are now allowed to provide pens and notebooks bearing only the company name strictly for the purpose of delivering medical and pharmaceutical information at on-site briefings. Product names are explicitly prohibited from being printed on these items. Additionally, commemorative gifts may not be provided, and the combined value of the pens and notebooks must fall within the scope of ‘commemorative gifts valued at KRW 50,000 or less’ as specified in the scope of economic benefits permitted under the Enforcement Rules of the Pharmaceutical Affairs Act.

The revised code also introduces a new requirement mandating that pharmaceutical companies prepare and disclose an expenditure report detailing economic benefits provided to pharmacists, Korean medicine pharmacists, medical professionals, founders of medical institutions, or employees of medical institutions within 3 months after the end of each fiscal year. Companies must retain the expenditure report, related accounting records, and supporting documentation for 5 years.

The definition of pharmaceutical sales promoters has also been expanded. In addition to pharmaceutical suppliers as defined under the Pharmaceutical Affairs Act (i.e., marketing authorization holders, importers, and wholesalers), the scope now explicitly includes “entities entrusted with pharmaceutical sales promotion and those re-entrusted by them.” This clarification means that CSOs (Contract Sales Organizations) acting on behalf of pharmaceutical companies or wholesalers are also subject to the Fair Competition Code's regulations on promotional activities.

The revised code also newly stipulates that when pharmaceutical companies support domestic academic conferences or international academic conferences held in Korea, they must not provide any additional financial or in-kind benefits related to the same conference, such as donations, food and beverage offerings, booth rentals, or advertising.

New sanctions have also been introduced for companies found to have illegally supported academic conferences.

Under the revised provisions, if it is confirmed through a court ruling, administrative action, or investigation by KPBMA that a pharmaceutical company supported the hosting or operation of an academic conference for improper purposes, the Association is prohibited from approving that company’s support for any academic conference hosting or operation for a period of two years from the date the fact of supporting the hosting or operation for improper purposes is confirmed.