Platform display of obesity drug prices not an advertising violation

No efficacy claims or product comparisons, and platforms are not pharmacy operators

Strict textual interpretation of Article 68 of the Pharmaceutical Affairs Act and Article 44 of its Enforcement Rule exposes a regulatory gap

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The 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 MFDS

The 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.