Pharmas face sales challenges and rebate monitoring

Amid the conflicts between the medical community and the government

Starting April 1, tertiary hospitals and outpatient clinics will shorten their working hours… Pharmaceutical and medical devices company may experience an inevitable decline in sales

The majority of symposiums and consultation vists have been cancelled…’Limited marketing activities’

Finding new clients and sales visits are challenging..Some clinics have asked pharmaceutical industry employees not to make visits

As the ongoing feud between the medical community and the government over the medical school quota continues, the pharmaceutical industry faces the full impact.

 

In addition to major hospitals, outpatient clinics have shortened working hours, making it difficult for some pharmaceutical company employees even to meet medical professionals.

 

Sales and marketing department employees express concerns about the immediate impact on performance.

 

Industry sources reported on April 2 that the Korean Medical Association (KMA) has decided to shorten doctors’ working hours in outpatient clinics to 40 hours per week.

 

Starting April 1, outpatient clinics will voluntarily shorten their working hours for late nights and weekend visits.

 

Starting April 1, professors at 20 medical schools nationwide will begin a 24-hour continuous shift followed by a day off for daytime work the next day.

 

This is a follow-up measure after the Medical School Professors Association of Korea sent a letter to the heads of major hospitals nationwide, urging them to adhere to the 52-hour workweek for professors.

 

The pharmaceutical industry anticipates a decrease in sales and revenue…”Events have been cancelled...Challenges in detailing marketing” With medical professionals' working hours shortened, the pharmaceutical industry is expected to face significant disruptions.

 

Asan Medical Center in Seoul is reported to have banned pharmaceutical company employees from entering to prevent disruptions, and there is speculation that other major hospitals may follow.

 

Even if hospital entry is permitted, it is said to be extremely difficult for pharmaceutical employees to meet with medical professionals.

 

“Since the medical feud began, we have been unable to meet with medical professionals at university hospitals.

 

Even outpatient clinics are asking us not to make visits,” a sales employee in the Korean pharmaceutical industry said.

 

“Not only finding new clients but maintaining sales with existing clients has become challenging,” he added.

 

“The impact on sales will be lessened for large pharmaceutical companies as they have original products and are conducting co-promotions.

 

Currently, only the big pharmaceutical companies can conduct detailing marketing targeting medical professionals,” he added.

 

“Smaller pharmaceutical companies need to sell generic drugs to improve profitability, but it is challenging to schedule appointments with medical professionals to conduct detailing marketing.” “I’m uncertain about the second quarter, but it’s possible that some companies may experience a decrease in sales profits by the second half of the year,” he said.

 

In addition to domestic pharmaceutical companies, global pharmaceutical companies that have entered the Korean market also express concerns about the medical gap.

 

As they supply medications such as anticancer drugs, orphan drugs, and biologics needed for severely ill patients, consulting with medical professionals is essential.

 

However, those companies are also experiencing difficulty in arranging meetings.

 

The analysis suggests that especially with the cancellation of conferences and subcommittee meetings scheduled for February and March, opportunities for product promotion have diminished.

 

“Scheduled meetings related to clinical trials are moving forward, but the majority of symposiums and conferences are being cancelled,” a sales employee of the global pharmaceutical company said.

 

“We are concerned about the cancellations of scheduled events.

 

It is a difficult time for everyone, but we hope that agreements can be reached between the medical community and the government,” he added.

 

Medical device and therapeutic material companies are also in crisis.

 

With a decrease in the number of surgeries due to medical gaps, a decline in revenue is inevitable.

 

“With delayed payments and a significant decrease in the number of surgeries in major hospitals, we have observed a significant drop in revenue compared to the same period last year.

 

The discontinuation of surgeries is the biggest issue," an employee of the medical device company said.

 

"The impact on consumable sales is greater than on equipment sales.

 

With fewer surgeries, the usage of therapeutic materials has decreased by more than half.

 

If this situation continues for a month or two, the company's future will be concerning," he added.

 

The government is conducting intensified tax audits…Pharmaceutical industry faces ‘triple hardships’ with having to submit expenditure reports Analysis suggests that pharmaceutical companies will face increased pressure due to intensified rebate monitoring and the requirement to submit expenditure reports.

 

The government has announced intensified monitorings on pharmaceutical company rebates until May.

 

The Ministry of Health and Welfare (MOHW) is operating a focused reporting period for pharmaceuticals and medical device rebates until May 20.

 

Through this focused reporting period, the MOHW aims to encourage voluntary reporting and uncover rebates.

 

The government is reportedly implementing a focused reporting period for illegal rebates in response to suspicions of pharmaceutical company employees being recruited for doctor rallies.

 

However, there is a prevailing view that it primarily targets pharmaceutical companies.

 

Currently, the government is conducting intensified tax audits targeting some domestic pharmaceutical companies.

 

Additionally, the government also discloses economic benefit expenditure reports from pharmaceutical and medical device suppliers for academic conference support and participation in product briefings.

 

Last month, the MOHW announced guidelines for disclosing expenditure reports and conducting investigations.

 

The economic benefit expenditure report includes details of financial benefits provided by pharmaceutical and medical device industries to medical professionals to enhance transparency in drug and medical device transactions.

 

The economic benefit expenditure report for the previous fiscal year will be published in December of this year.

 

“Amid the intensifying conflict between the medical community and the government, we are facing a triple hardships of intensified tax audits, declining sales and operating profits, as well as disclosure of expenditure reports,” a domestic pharmaceutical industry employee said.

 

“While the government is pressuring the medical sector to gain advantageous positions in negotiations, the adverse effects are impacting the pharmaceutical industry,” he added.

 

"While a decline in sales is anticipated, there should be no issues with expenditure reports or rebate problems unless they are fabricated or illegal," another domestic pharmaceutical company employee stated.

 

“We hope hospitals and the pharmaceutical industry can overcome this crisis together.”