Fair Trade Commission: "Kukje Yakpum gave rebates to clinics and hospitals... Fine of 252 million KRW"

[Sejong=Asia Economy Reporter Joo Sang-don] The Korea Fair Trade Commission (KFTC) announced on the 25th that it has decided to issue a corrective order and impose a fine of approximately 252 million KRW on Kukje Yakpum for providing unfair economic benefits (rebates) to hospitals and clinics to promote the sales of its own pharmaceutical products.

Kukje Yakpum is a pharmaceutical manufacturing and wholesale company with total assets of 140 billion KRW and sales of 120 billion KRW as of the end of 2020.

According to the KFTC, Kukje Yakpum provided unfair economic benefits (cash, gift certificates, etc.) amounting to about 1.76 billion KRW to 80 personnel from 73 hospitals and clinics nationwide from February 2008 to July 2017 to promote the sales of pharmaceuticals it manufactures and sells.

Kukje Yakpum systematically allocated part of its sales activity budget as rebate funds at the company level and provided unfair economic benefits to hospitals and clinics through both pre- and post-support methods.

The specific rebate provision process was carried out as follows: "drafting by branch sales staff → review by sales headquarters → approval by the CEO → delivery of support funds."

The KFTC judged that these actions constituted unfair customer inducement practices by providing unfair or excessive benefits compared to normal trade practices, thereby enticing customers of competing businesses to trade with themselves.

A KFTC official stated, "By detecting and taking action against unfair rebate practices by pharmaceutical companies, we expect to contribute to restoring competitive order in the pharmaceutical market and protecting consumer interests," adding, "The KFTC will continue to strengthen monitoring of acts that undermine competition order in the pharmaceutical market."

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