New Anti-Rebate Legislation in South Korea

The South Korean Government recently announced a reform in the drug anti-rebate law, with the purpose of eradicating pervasive, unethical, and illegal rebate practices in pharmaceutical marketing. The main objective of this reform is to have the ability to bring criminal charges against doctors and pharmacists for receiving illegal kickbacks from drug companies. Previously, provision of illegal kickbacks by drug companies led to criminal punishment of the drug companies alone, leaving doctors and pharmacists unpunished as the recipients. With the introduction of the “Dual Punishment System (DPS)” reform, criminal punishment for illegal rebates is extended to those receiving illegal kickbacks. Although bitter controversy erupted among stakeholders when the reform was first drafted, a civic group participated in the reform process and effectively influenced the legislative process to a successful end. Some interim outcomes from the DPS in terms of bringing illegal practices to account have already been reported since the policy’s implementation in November 2010. The reform background, goals, potential issues, and policy implications are explored in this study with the objective of providing further insight into drug policy for other countries that face similar challenges in the area of drug marketing.