Sanctions on Unfair Customer Solicitation Practices
[Asia Economy Reporter Joo Sang-don] The Fair Trade Commission announced on the 23rd that it has decided to issue a corrective order and impose a fine of 78 million KRW on MG for providing improper incentives to 75 hospitals and clinics nationwide with the purpose of increasing prescriptions of nutritional infusion solutions that it manufactures and sells.
According to the Fair Trade Commission, from September 2012 to December 2017, MG provided rebates worth approximately 860 million KRW to 75 hospitals and clinics nationwide to boost prescriptions of three types of nutritional infusion solutions it manufactures and sells.
Sales representatives provided cash obtained through methods such as card kkang, where corporate cards were used to make credit purchases but cash was actually returned, or directly offered economic benefits to hospitals and clinics by prepaying corporate cards for various events such as seminars and dinners. They also utilized indirect payment methods through sales agencies.
To conceal these rebate provisions, accounting books were recorded by dispersing the amounts across various accounts such as advertising expenses, sales promotion expenses, meeting expenses, and welfare expenses.
A Fair Trade Commission official stated, "Providing rebates to increase prescriptions of prescription drugs not only infringes on patients' rights to choose medications but also adversely affects the soundness of health insurance finances. The Fair Trade Commission will continue to strengthen monitoring of acts that undermine competitive order through rebates in the pharmaceutical market and will respond strictly if violations of related laws are detected."
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