Prosecution Seeks Prison Sentence for Former JW Shinyak Sales Director in 'Obesity Drug Rebate' Case

Agreed on prescriptions with 90 hospitals nationwide and provided 800 million KRW over 3 years
Also monitored prescription compliance... JW Shinyak corporation faces fine charges

The prosecution has requested a prison sentence for the former head of sales at JW Shinyak, a subsidiary of JW Pharmaceutical, who was indicted on charges related to 'rebates for obesity drugs.'

On the 4th, Judge Yoo Dong-gyun of the Criminal Division 24 at the Seoul Central District Court held a sentencing hearing for former JW Shinyak head of sales Mr. A and JW Shinyak, who were indicted for violating the Pharmaceutical Affairs Act.

On this day, the prosecution requested the court to sentence Mr. A to "2 years in prison," stating that he "made key decisions regarding the rebates." Along with this, the prosecution also requested a fine of 45 million KRW for JW Shinyak. Mr. A's defense attorney said, "Please consider the structural problem where, without providing rebates, it is inevitable to be eliminated in the fierce competition among domestic pharmaceutical companies."

Mr. A, who oversaw JW Shinyak's sales for seven years starting in 2012, was brought to trial on charges including providing cash rebates of several million KRW each time to hospital medical staff through sales representatives in various regional business units after securing a cash budget. JW Shinyak, as Mr. A's employer, was also indicted.

From January 2014 to April 2017, JW Shinyak was caught by the Fair Trade Commission for providing improper rebates worth approximately 800 million KRW to 90 hospitals and clinics nationwide to increase prescriptions of obesity treatment drugs that it manufactured and sold. At that time, JW Shinyak handled 18 types of obesity treatment drugs, and it contracted with each hospital for a certain amount of obesity drug prescriptions, providing economic benefits equivalent to 20-35% of the contracted amount in advance.

Investigations revealed that JW Shinyak conducted rebates by having sales representatives draft prescription contracts for the hospitals they were responsible for, obtaining approval from head of sales Mr. A, and then providing advance payments to the hospitals. JW Shinyak managed the hospitals by monitoring whether they fulfilled the prescription contracts for obesity drugs and reducing the advance payment ratio if the contracts were not met.

In February 2021, the Fair Trade Commission imposed a surcharge of 240 million KRW on JW Shinyak and reported the case to the prosecution. The sentencing hearing for JW Shinyak and Mr. A is scheduled for the 17th of next month.

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