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- 2026-09-02 19:05:37
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- Policy
- Platform display of obesity drug prices not an advertising violation
- by Lee, Tak-Sun Sep 02, 2026 09:07am
- AI-generated imageThe Ministry of Food and Drug Safety (MFDS) has concluded that displaying the names and prices of non-reimbursed prescription drugs, including obesity treatments Mounjaro and Wegovy, on telemedicine platforms is difficult to regard as illegal advertising under the Pharmaceutical Affairs Act, prompting controversy across the healthcare and pharmaceutical sectors.Amid mounting criticism that this undermines the original intent of prohibiting direct-to-consumer advertising of prescription drugs, experts analyze that the background behind the Ministry of Food and Drug Safety's decision involves a strict textual interpretation of current Pharmaceutical Affairs Act provisions and a 'regulatory gap' concerning platforms as a new type of intermediary.The first key legal basis for the MFDS interpretation is Article 68(6) of the Pharmaceutical Affairs Act (Prohibition of Exaggerated Advertisement, etc.), which "prohibits advertising prescription drugs to the general public" except in cases prescribed by Ordinance of the Prime Minister, such as vaccines for the prevention of infectious diseases and advertisements in professional pharmaceutical publications.Under Supreme Court precedent, for an act to constitute 'advertising' prohibited by the Pharmaceutical Affairs Act, there must be evidence of a clear commercial purpose and promotional conduct intended to stimulate public demand for a specific drug and promote its sale.The MFDS appears to have interpreted the mere display of a 'product or ingredient name' and an 'actual market price,' without descriptions exaggerating or highlighting a product’s therapeutic efficacy or superiority, as closer to the provision of objective information than commercial advertising intended to promote sales. In this sense, an MFDS official also reached the legal conclusion that 'a simple listing of prices without descriptions of efficacy or effects would be difficult to regard as satisfying the elements of advertising to the general public.'Limits of Article 44 of the enforcement rule…Platforms are not ‘pharmacy operators’The limits of the Pharmaceutical Affairs Act also come into play when it comes to comparisons of prices among pharmacies and practices that steer consumers toward the lowest-priced option.Article 44(1)3 of the Enforcement Rule of the Pharmaceutical Affairs Act (Distribution Business of Drugs), concerning pharmaceutical distribution management and maintenance of orderly sales practices, stipulates that “a pharmacy operator shall not make a representation or advertisement that, without identifying the subject or basis of comparison, implies that his or her pharmacy offers more favorable terms than another pharmacy, or compares the selling prices of drugs with those of another pharmacy.”The problem is that the provision expressly limits the party subject to the restriction to a 'pharmacy operator.' Telemedicine platforms such as DoctorNow are IT-based intermediaries rather than pharmacy operators. As a result, even when a platform aggregates price information from participating pharmacies and displays it in list form, the wording of the current Enforcement Rule makes it difficult to hold the platform itself liable for violating the provision.The decision is also seen as reflecting the practical challenges facing the MFDS as an enforcement authority.One issue is ambiguity over who is actually responsible for the advertising. When prices are displayed on a platform, it can be difficult to determine whether the advertiser is the pharmacy, a pharmaceutical wholesaler or the platform itself. If the MFDS were to aggressively apply Article 68 of the Pharmaceutical Affairs Act and pursue administrative sanctions or criminal complaints without clearly identifying the responsible party, it could face a substantial risk of losing subsequent administrative litigation.The division of responsibilities among government ministries also appears to have served as one factor. The MFDS is primarily responsible for drug safety and product advertising under the Pharmaceutical Affairs Act. On the other hand, disclosure of non-reimbursed prices, pharmaceutical distribution practices, patient solicitation or referral under Article 27(3) of the Medical Service Act, and compliance with platform guidelines fall more closely within the remit of the Ministry of Health and Welfare. From this perspective, regulating price displays as pharmaceutical advertising could extend beyond the scope of the laws administered by the MFDSThe dilemma between consumers’ right to know and a ‘legislative gap’Unlike advertising through mass media (TV, newspapers, outdoor advertisements, etc) which pushes information indiscriminately to the public, price searches within a platform are initiated by consumers seeking the information themselves. This leaves room to regard such searches as falling within the scope of consumers’ right to know, similar to the Health Insurance Review & Assessment Service’s disclosure of non-reimbursed medical fees.Accordingly, displaying the names and prices of prescription drugs in mass media would be more likely to constitute a violation of the Pharmaceutical Affairs Act’s ban on prescription drug advertising, as the party responsible for the advertisement would be clearly identifiable.However, the pharmaceutical sector disputes the MFDS interpretation. Industry representatives argue that the agency has overlooked the fact that telemedicine platforms go beyond merely allowing consumers to actively search for prices and send unsolicited notifications to users that encourage or stimulate demand for specific drugs.Critics also argue that the MFDS interpretation is overly narrow because simply identifying a product as a 'diet injection' or 'obesity treatment' can itself communicate its efficacy or intended effect.At the pharmacy level, pharmacies further argue that telemedicine platforms are not merely information portals but commercial environments in which consultation, prescribing and dispensing are connected in a single process. From that perspective, they contend that displaying prices has effectively become a promotional tool that can encourage inappropriate use of prescription drugs.Ultimately, the MFDS decision has been characterized as a representative example of a 'legislative gap' arising from attempts to regulate a new form of pharmaceutical distribution and intermediation through an existing legal framework.A pharmaceutical industry legal expert said, “To clearly regulate the display of drug prices by platform intermediaries going forward, legislative measures will likely be necessary beyond simply changing administrative interpretations, including expressly setting out intermediary obligations in the amended Medical Service Act and Pharmaceutical Affairs Act.
- Policy
- "IPC certification can be revoked even after pharma clears charges"
- by Lee, Jeong-Hwan Sep 02, 2026 09:07am
- The Ministry of Health and Welfare (MOHW) announced that even if a pharmaceutical company is cleared of charges in an illegal drug rebate investigation and only individual employees are found liable for violations, the company remains subject to review for the revocation of its Innovative Pharmaceutical Company certification.The MOHW states that because revoking Innovative Pharmaceutical Company certification is an administrative procedure to evaluate whether policy incentives should be maintained, independent of criminal punishment, it is not an excessive or duplicate sanction.On the 1st, the MOHW responded to written inquiries from Representative Mi-hwa Seo of the Democratic Party of Korea on the National Assembly's Health and Welfare Committee.The MOHW explained that when pharmaceutical companies are found providing illegal rebates, the ministry decides whether to revoke Innovative Pharmaceutical Company certification by comprehensively evaluating administrative sanction histories and accountability for disrupting market order, regardless of any criminal penalties imposed on the company.The rationale is that revoking Innovative Pharmaceutical Company certification due to distribution order violations, such as rebates, functions as a regulatory governance mechanism to determine whether it remains appropriate to grant and sustain qualification and preferential policy benefits, distinguishing it from criminal penalties or statutory administrative sanctions under the Pharmaceutical Affairs Act or the National Health Insurance Act.In practice, when reviewing certification revocations, the MOHW determines whether to revoke status through deliberation·resolution by the Pharmaceutical Industry Promotion and Support Committee, based on criteria such as rebate amounts (whether under KRW 5 million), violation frequency (fewer than two instances), and the violation period (excluding violations that occurred more than five years prior).The MOHW clarified that even if a company is cleared of charges due to an employee's individual fault, corporate accountability cannot be detached once fair market order has been compromised.Under the 'Special Act on the Promotion and Support of the Pharmaceutical Industry' and related regulations, receiving an "administrative sanction" under the Pharmaceutical Affairs Act or the Monopoly Regulation and Fair Trade Act renders a company subject to disqualification and revocation review.Of the four cases reviewed over the past five years involving judicial dispositions and corporate liability, it was confirmed that one company had its certification revoked and another voluntarily surrendered its certification despite operating a Compliance Program (CP) and receiving non-indictment (cleared of charges) dispositions for the corporate entity. The remaining two cases were disqualified from certification renewal due to factors such as failure to submit documentation.The MOHW also dismissed concerns that imposing certification revocation alongside existing administrative measures, such as drug price reductions and administrative fines, constitutes excessive sanctioning.The MOHW stated, "The Innovative Pharmaceutical Company framework is a system designed to give accredited benefits to companies capable of leading the industry based on ethical responsibility," adding, "Because it is a regulatory measure to assess the validity of maintaining certified status, it does not constitute duplicate or excessive sanctioning."However, the MOHW does not currently operate explicit statutory reduction provisions for proactive corporate compliance activities (operating CP or establishing ISO 37001).The MOHW stated, "During committee evaluations, members consider corporate compliance efforts and attributable liability," and explained, "The MOHW will gather feedback from experts and stakeholders on establishing detailed review criteria that reflect substantive corporate liability and preventive efforts as mitigating factors."In response to concerns that a substantive review process is necessary to examine who is responsible for and the extent of charges during revocation proceedings, the MOHW responded that "We are currently evaluating prior notices, formal hearings, and deliberations by the Pharmaceutical Industry Promotion and Support Committee, considering the motives, background, severity, and degree of intent or negligence behind the violation."The MOHW further stated, "Even if a company is cleared of charges, corporate and individual liability cannot be separated once an employee's illegal rebates disrupt fair market order," and concluded by adding, "Considering the high level of criticisims from the society associated with rebates and the necessity to actively eradicate them for the sound development of the pharmaceutical industry, it is necessary to re-evaluate whether to maintain government-accredited Innovative Pharmaceutical Company status."
- InterView
- [Reporter’s View] Decade of drug price cuts ahead
- by Jung, Heung-Jun Sep 02, 2026 09:07am
- With the reassessment of listed drugs set to continue for a decade beginning next year, large-scale disruption from drug price cuts is expected to unfold on the front line every year.The government needs to put measures in place before price reductions under the reassessment begin next April. Preventing confusion over product returns and price-difference settlements after price cuts should also be part of the responsibilities that come with the latest drug pricing reform.Phase 1 drugs, which will undergo reassessment from next year through 2033, and Phase 2 drugs, scheduled for 2030 through 2036, will undergo phased annual price cuts of 2%.Under the system, prices set at 53.55% of the benchmark will gradually be reduced to 45%. Products that fail to meet the relevant criteria will have their prices reduced to 80% of the applied rate for that year.For individual products, the amount of each reduction may not appear substantial. The problem, however, is the sheer scale. With post-listing management now conducted on a regular schedule, thousands of products are expected to face price reductions every April or October.Although administrative attention is currently focused on determining which products will be subject to price cuts, once that process is complete, the market will have to contend with the disruption caused by the price adjustments themselves.Products facing price cuts in April and October will include not only those covered by the reassessment of listed drugs but also products subject to the price-volume linkage system under the regularized post-listing management framework.If the prices of thousands of drugs are cut simultaneously, pharmacies will inevitably seek large-scale settlements for price differences to protect themselves against inventory losses. If the government follows the same tight timelines used for previous drug price cuts, a wave of product returns across the market will be all but inevitable.The government should finalize and transparently announce the products subject to price cuts and their respective reduction rates at least one month in advance, giving pharmacies and distributors sufficient time to prepare procedures such as price-difference settlements without disruption.During the across-the-board price cuts in 2012, procedures for paper-based returns were established, and compensation for price differences was provided. Even so, the sheer number of affected products rendered disruption in the field unavoidable.The reassessment of listed drugs will affect the market over a lengthy 10-year period. Rather than a one-off shock, it will become an annual event affecting the market for a decade. Before the first round begins next year, the government therefore needs to establish a predictable and transparent buffer system.To this end, the government should work with organizations, including the Korea Pharmaceutical and Bio-Pharma Manufacturers Association, the Korea Pharmaceutical Distribution Association and the Korean Pharmaceutical Association to establish measures in advance. The quality of a drug pricing system depends not only on sophisticated formulas for determining new prices, but also on whether the system can operate without imposing unnecessary social costs and disruption on the market.
- Policy
- Lixiana generics set to enter the mkt in Nov…26 companies win nods
- by Lee, Tak-Sun Sep 02, 2026 09:07am
- AI-generated imageGenerics referencing the anticoagulant 'Lixiana (edoxaban tosilate hydrate),' which surpasses KRW 120 billion in annual outpatient prescription sales, have completed final regulatory authorization and are set to enter the market this November.With Huons securing confirmation of the final patent-circumvention ruling and obtaining last-minute marketing authorization, 76 products across 26 pharmaceutical companies are set for market launch. However, as the "multi-product listing management" system is applied for the first time under the revised drug pricing policy implemented in August, pricing calculations across active ingredients and formulations have emerged as the primary market success variable.According to the pharmaceutical industry on the 31st, the Ministry of Food and Drug Safety (MFDS) completed marketing authorizations for 76 generic products containing edoxaban (excluding the original drug) as of 6 PM. Products approved by the end of this month are scheduled to be listed on the Ministry of Health and Welfare's Pharmaceutical Reimbursement List in late October and released to the market, with National Health Insurance reimbursement coverage starting November 11, the day after the original drugs' substance patent expires on November 10.Daiichi Sankyo Korea's original drug, Lixiana, is a leading product in the direct oral anticoagulant (DOAC/NOAC) market. It is indicated for ▲reducing the risk of stroke and systemic embolism in patients with non-valvular atrial fibrillation ▲the treatment of deep vein thrombosis (DVT) and pulmonary embolism (PE) ▲reducing the risk of recurrent DVT and PE.According to pharmaceutical market research firm UBIST, outpatient prescription sales reached KRW 121.8 billion in 2025, up 4% compared to the previous year, maintaining its blockbuster status and driving strong development momentum among domestic pharmaceutical companies.Follow-on developers also won patent dispute proceedings. Major pharmaceutical companies, including Samjin Pharm, Chong Kun Dang, Boryung, and Hanmi Pharm, resolved entry barriers by securing upheld claims (rulings of non-infringement) in negative scope confirmation trials against pharmaceutical composition Patent No. 1424843. In particular, Huons finalized its circumvention trial ruling and sequentially secured marketing authorization on August 31, joining the lineup for the coordinated November launch.The revised drug pricing system is the most critical turning point for the Lixiana generic market. After the revised pricing framework takes effect on August 1, edoxaban generic drugs will be the first cohort subject to the strengthened "multi-product listing management" criteria (regulating listings starting from the 14th identical formulation product).Among the 76 generic products approved to date by active ingredient, the original drug-identical 'edoxaban tosilate hydrate' is the most common, with 64 products across 22 companies. In comparison, the salt-modified formulation "edoxaban besylate hydrate" comprises 12 products across 4 companies.By dose strength across all ingredients, the total includes ▲23 products (23 companies) for 15 mg ▲26 products (26 companies) for 30 mg ▲27 products (27 companies) for 60 mg. When evaluating only identical-ingredient (tosilate hydrate) tablets subject to multi-product management, all strengths- 15 mg (19 products), 30 mg (22 products), and 60 mg (23 products)- substantially exceed the 14-product threshold, meaning multi-product management criteria will be applied across all dosages.Under the revised regulations, Innovative Pharmaceutical Companies receive a premium price floor of approximately 60% of the originator price, as before, with an additional three years granted for domestic manufacturing to maintain the premium price for up to four years. In contrast, conventional generics meeting baseline criteria—such as in-house bioequivalence testing and Drug Master File (DMF) registration—are priced at 45% upon initial listing, while generics fulfilling only one criterion are priced at 36%.When the multi-product listing management criteria per identical formulation are applied on top of this, prices will be adjusted downward after one year. Generics initially priced at 45% will drop to 38.25%, while products listed at 36% will decrease to 30.6%. Consequently, most tosilate hydrate tablets sharing the originator's active ingredient will struggle to avoid additional price-cut penalties across all dose strengths after one year.Conversely, products exempt from these regulations have gained a price-defense advantage. Salt-modified therapeutics (12 products), such as the 'edoxaban besylate hydrate’ formulations approved for Hanmi Pharm, Yuhan, Light Pharm Tech, and Genuone Sciences, along with the orally disintegrating tablet (ODT) formulation developed in-house by Dong-A ST, are excluded from the new multi-product listing management criteria.A pharmaceutical industry official projected that "Intense competition is anticipated, with 76 products entering the KRW 120 billion market simultaneously," adding, "Under the revised drug pricing policy, profitability gaps among pharmaceutical companies will widen depending on Innovative Pharmaceutical Company certification status and the possession of salt modifications or specialized dosage formulations."
- Company
- CKD transferred KRW 24B to its two R&D subsidiares in a year
- by Cha, Ji-Hyun Sep 01, 2026 09:51am
- Chong Kun Dang is accelerating its research and development (R&D) strength by establishing separate corporate entities for its research organizations. Over the past year alone, the company's capital contributions to two newly spun-off entities have exceeded KRW 24 billion. Attention is focused on whether this specialized R&D subsidiary framework will translate into performance.According to the Financial Supervisory Service, on the 1st, Chong Kun Dang invested an additional KRW 10.7 billion into Archela, its specialized drug development subsidiary, in the second quarter. Following an initial KRW 3.0 billion investment when Archela was established last year, this additional capital transfer within roughly six months raised Chong Kun Dang's cumulative investment in Archela to KRW 13.7 billion.Archela was founded in October of last year as a drug development subsidiary designed to enhance specialized expertise and operational efficiency in novel drug development. It operates as a wholly owned subsidiary of Chong Kun Dang, with Chong Kun Dang's equity stake in Archela standing at KRW 8.2 billion as of the end of June.Rather than discovering preclinical candidates in-house, Archela adopts a No Research, Development Only (NRDO) business model focused on advancing transferred clinical-stage pipeline candidates toward regulatory approval and commercialization. The subsidiary has obtained three pipeline candidates previously developed by Chong Kun Dang: the dyslipidemia candidate 'CKD-508,' the obesity and diabetes candidate 'CKD-514,' and the intractable neurological disease candidate 'CKD-513,' and is currently driving their clinical progression and commercial development.Dr. Ju-Hee Lee, formerly of the Chong Kun Dang Research Institute, was appointed as Archela's first chief executive officer. Dr. Lee is a drug development expert who obtained a doctoral degree from Seoul National University and accumulated extensive research experience at the Seoul National University College of Medicine Samsung Cancer Research Institute and Memorial Sloan Kettering Cancer Center (MSKCC) in the United States.Archela's board of directors currently comprises three members: Dr. Lee, alongside non-executive directors Sang-yoon Lee and Chang-sik Lee. Director Sang-yoon Lee is an internist who graduated from Seoul National University College of Medicine and built global clinical development experience at Pfizer and Bridge Biotherapeutics. Director Chang-sik Lee, head of the Chong Kun Dang New Drug Research Institute, has spearheaded small-molecule synthetic drug research, pipeline discovery, and early development. While Sung-jun Min, head of Chong Kun Dang's Clinical Development Center, initially served on the founding board, he later stepped down, and Sang-yoon Lee joined the board.Following its additional capital contribution to Archela, Chong Kun Dang also committed capital to a newly established subsidiary. In April of this year, six months after launching Archela, Chong Kun Dang established Neurateon and invested 10.5 billion KRW during the first half of the year. Chong Kun Dang initially acquired equity by investing KRW 500 million at Neurateon's incorporation, then expanded its total investment to KRW 10.5 billion through a capital increase.Chong Kun Dang established the R&D subsidiary Neurateon to specialize in technical research functions such as pharmaceutical formulation, analytical research, and product development. Neurateon is likewise a wholly owned subsidiary, with Chong Kun Dang holding a 100% equity stake.Archela focuses on clinical development and out-licensing of novel pipeline assets transferred from Chong Kun Dang, whereas Neurateon specializes in formulation and analytical research, as well as product development capabilities for incrementally modified drugs (IMDs) and generics. Chong Kun Dang has thus split the roles of its R&D subsidiaries into Archela, which focuses on late-stage candidate development, and Neurateon, which oversees the technical research needed for commercial formulation and manufacturing.Neurateon's executive composition is similarly tailored to the commercialization stages of formulation, product development, and manufacturing. Inaugural CEO Dong-han Won is a formulation research specialist who conducted formulation and technical research at Dong-A ST for over two decades before serving as head of the Technology Research Institute at Chong Kun Dang. On the board of directors, Yu-Kyung Kwon, head of the Development Center at Chong Kun Dang, and Hyungwon Byun, head of the Manufacturing Division, serve as non-executive directors to support product development and regulatory affairs, as well as manufacturing and quality management, respectively.With these investments, Chong Kun Dang has invested a total of KRW 24.2 billion into the two newly established R&D subsidiaries over the past year. With Chong Kun Dang's consolidated operating profit last year at KRW 80.6 billion, the company effectively allocated about 30% of its annual operating earnings to the two specialized R&D subsidiaries in less than a year.However, neither subsidiary has yet reached the stage of generating substantial financial performance. In the first half of this year, Archela recorded a net loss of 5.3 billion KRW with zero revenue. During the same period, Neurateon recorded no revenue and no net profit or loss.
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