Prosecutors Conduct Search and Seizure at Gyeongbo Pharmaceutical Over Suspected Hundreds of Billions Won in Rebates

The prosecution has launched a compulsory investigation into Kyungbo Pharmaceutical, which is suspected of engaging in rebate transactions worth hundreds of billions of won.

The Food and Drug Crime Investigation Division of the Seoul Western District Prosecutors' Office (Chief Prosecutor Song Myeong-seop) announced on the 18th that it is conducting a search and seizure at Kyungbo Pharmaceutical's headquarters in Seodaemun-gu, Seoul.

Earlier, whistleblower A reported to the Anti-Corruption and Civil Rights Commission in May 2021 that Kyungbo Pharmaceutical provided illegal rebates amounting to 40 billion won by returning about 20% of the drug price in cash or other forms to hundreds of hospitals and clinics nationwide from 2013 to 2021. In response, the commission recognized A as a whistleblower in September 2021 and requested the prosecution to investigate Kyungbo Pharmaceutical for violations of the Medical Service Act, Pharmaceutical Affairs Act, and Fair Trade Act.

The Supreme Prosecutors' Office transferred the case to the Seoul Western District Prosecutors' Office, which is a 'Food and Drug Safety-focused Prosecutors' Office.' The Seoul Western District Prosecutors' Office summoned A as a witness last year for investigation. Kyungbo Pharmaceutical, a subsidiary of Chong Kun Dang Holdings, the holding company of the Chong Kun Dang Group, has consistently denied the allegations, stating that the company strictly prohibits rebates at the corporate level.

A prosecution official stated, "This search and seizure is part of an investigation that the prosecution took over from the Anti-Corruption and Civil Rights Commission's whistleblower case," adding, "We plan to conduct the investigation swiftly and strictly."