Constitutional Court: "'Chuseok Gift Special' Is Not an Advertisement Prohibited Under the Pharmaceutical Affairs Act" ... Decision to Cancel 'Prosecutor's Deferred Indictment'

The Grand Bench of the Constitutional Court. [Image source=Yonhap News]

[Asia Economy Reporter Choi Seok-jin] Ahead of Chuseok, the Constitutional Court has ruled that posting a paper on a pharmacy window with prices along with the phrase "Chuseok Gift Special" to promote specific products cannot be considered as "price comparison advertising with other pharmacies," which is prohibited under the Pharmaceutical Affairs Act or its Enforcement Rules.

According to the principle of legality in criminal law, penal provisions must be interpreted and applied strictly. The phrase "Chuseok Gift Special" means that the pharmacy is selling products at a reduced price for Chuseok gifts, and it is difficult to interpret it as meaning that the prices are cheaper compared to other pharmacies.

The Constitutional Court announced on the 7th that in a constitutional complaint case filed by pharmacy operator A, who was given a non-prosecution disposition for violating the Pharmaceutical Affairs Act by using the phrase "Chuseok Gift Special" for product promotion, against prosecutor B of the Seoul Central District Prosecutors' Office, the court unanimously decided, "The non-prosecution disposition by respondent (prosecutor B) infringes on the petitioner’s (A’s) rights to equality and pursuit of happiness, and thus it is canceled."

The court explained, "The phrase 'Chuseok Gift Special' in advertising does not fall under the 'price comparison advertising with other pharmacies for pharmaceutical products' prohibited by the Pharmaceutical Affairs Act and its Enforcement Rules."

A, who operates a pharmacy in Jung-gu, Seoul, was given a non-prosecution disposition by the prosecution last August for posting a paper on the pharmacy window on September 3, 2019, that read "Chuseok Gift Special, OO Supplement, 45,000 won."

A non-prosecution disposition is a type of non-indictment decision, but unlike 'not guilty' or 'no charges,' it acknowledges the suspicion of a crime but refrains from prosecuting the suspect considering the degree of harm and other factors.

Article 47(1)(4) of the Pharmaceutical Affairs Act imposes an obligation on pharmacy operators and others selling pharmaceuticals to comply with matters prescribed by the Ministry of Health and Welfare regarding pharmaceutical distribution management and sales order maintenance.

Furthermore, Article 44(2)(3) of the Enforcement Rules of the Pharmaceutical Affairs Act, a decree by the Ministry of Health and Welfare, prohibits "price comparison advertising of pharmaceutical products with other pharmacies."

A argued in the constitutional complaint that "the phrase 'Chuseok Gift Special' was used solely to provide information about selling pharmaceuticals at reasonable prices for Chuseok, without comparing prices with other pharmacies, yet the prosecutor recognized it as a violation of the Pharmaceutical Affairs Act and issued a non-prosecution disposition, infringing on the right to pursue happiness."

The Constitutional Court first cited a Supreme Court ruling, stating, "Penal provisions must be interpreted and applied strictly, and should not be excessively expanded or analogically interpreted to the detriment of the defendant."

It continued, "The Pharmaceutical Affairs Act and its Enforcement Rules prohibit 'price comparison advertising of pharmaceutical products with other pharmacies' not simply to ban displaying or evaluating prices of pharmaceutical products, but to prevent excessive price reductions through such advertising that would disrupt fair sales order of pharmaceuticals."

The court pointed out, "The petitioner only wrote 'Chuseok Gift Special' when selling pharmaceuticals and did not indicate any comparison targets such as other pharmacies," and added, "'Special price' means a specially discounted price, but socially and commonly, it implies a price that is particularly low compared to general standards, not necessarily that it is cheaper than other pharmacies."

It further explained, "'Chuseok Gift Special' is an advertising phrase conventionally used to indicate that prices have been lowered for Chuseok gifts, and consumers generally perceive it as the business reducing prices for Chuseok rather than necessarily meaning that the products are sold cheaper than those of other companies."

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