F&D Net Induced Hospitals to 'Note Prescription' of Its Health Functional Foods... Fair Trade Commission Issues Corrective Order and Fine

[Sejong=Asia Economy Reporter Joo Sang-don] F&D Net has been sanctioned by the Fair Trade Commission for providing so-called "note prescriptions" bearing its product names to obstetrics and gynecology clinics and other medical institutions, misleading pregnant women and others into believing that purchasing these products is beneficial.

On the 25th, the Fair Trade Commission announced that it decided to impose corrective orders and a fine of 72 million KRW on F&D Net for such actions. F&D Net is a specialized distributor of health functional foods, utilizing hospitals and clinics as its main distribution channels. Its major products include Doctor Sunny D Drops and Doctor Moms I, II, and III.

Health functional foods are foods manufactured and processed using ingredients or components with beneficial functions for the human body, distinguished from medicines intended for disease prevention and treatment. Generally, purchasing medicines requires a doctor's prescription, but health functional foods can be purchased at an individual's discretion without a doctor's prescription.

However, according to the Fair Trade Commission, from September 2011 to August 2019, F&D Net induced medical personnel at hospitals and clinics with which it traded to issue note prescriptions bearing its product names to consumers. Additionally, when signing supply contracts for health functional foods with hospitals and clinics, F&D Net included exclusive sales clauses that guaranteed about 50% of sales profits and required the establishment of stores handling only its products within those medical institutions.

Hospitals and clinics requested to use note prescriptions provided patients or consumers with note prescriptions bearing product names supplied by F&D Net and guided them to F&D Net health functional food stores within the medical institutions. The Fair Trade Commission judged that such actions constitute unfair customer inducement that misleads or may mislead patients or consumers into believing that purchasing these products is better than others.

Accordingly, the Fair Trade Commission decided to issue a prohibition order on future acts and impose a fine of 72 million KRW.

A Fair Trade Commission official stated, "This action is significant as it is the first time a health functional food company has been caught and sanctioned for inducing medical personnel to use note prescriptions bearing product names, misleading consumers," adding, "To prevent similar cases, we plan to encourage voluntary correction and recurrence prevention of note prescription use through meetings with the Health Functional Food Association and related businesses in the future."

This content was produced with the assistance of AI translation services.