SEOUL — The Fair Trade Commission (FTC) announced on Thursday that it has fined JW Pharmaceutical, a South Korean drug firm, a record 29.8 billion won (US$21.93 million) for illegally providing rebates to local hospitals and clinics. According to the FTC, from 2014 to 2018, the company offered cash, gifts, and other incentives worth 6.5 billion won to about 1,400 medical facilities nationwide, contingent upon them prescribing its products.
As reported by Yonhap News Agency, the FTC also found that the company had given 530 million won in economic benefits to some 100 clinics between 2014 and 2018 for using its products. Furthermore, the commission has reported the case to the prosecution for additional investigation, as the company is also suspected of trying to conceal these illegal activities.
The FTC has also initiated a prosecution investigation into JW Pharmaceutical's CEO, Shin Young-sup, for his alleged role in these illicit practices and has ordered the company to undertake corrective actions. The latest fine marks the largest ever imposed by the FTC on a local pharmaceutical company for such practices. The commission justified the fine by pointing out that JW Pharmaceutical had received punitive measures for similar practices back in 2007 but had not corrected its behavior.
In a public statement, JW Pharmaceutical said it believes the FTC "lost balance" in its decision-making compared to similar cases involving other companies. The company also indicated its intent to push for administrative litigation after a detailed review of the case.