Executed in Accordance with Relevant Regulations and Internal CP Standards
The police have launched a compulsory investigation into Daewoong Pharmaceutical, whose sales staff are suspected of engaging in illegal rebate activities. Daewoong Pharmaceutical has stated that it has not violated any regulations and intends to prove this through the police investigation.
On the morning of July 17, the Criminal Investigation Unit of the Gyeonggi Nambu Provincial Police Agency began a search and seizure operation at Daewoong Pharmaceutical, which is under suspicion of violating the Pharmaceutical Affairs Act. The targets of the search and seizure include Daewoong Pharmaceutical's headquarters in Gangnam-gu, Seoul, as well as its subsidiaries and related companies.
The police plan to deploy multiple investigators to secure documents and electronic information related to Daewoong Pharmaceutical's sales management.
The allegations surfaced through a public interest report. The whistleblower, believed to be associated with Daewoong Pharmaceutical, submitted a report to the Anti-Corruption and Civil Rights Commission in April last year, detailing two years of illegal rebate activities by the company from January 2022 to December 2023. According to the report, during this period, approximately 130 Daewoong Pharmaceutical sales representatives provided rebates to around 380 hospitals and clinics in exchange for using the company's new drugs and other pharmaceutical products. The exact amount of the rebates is unknown.
Previously, in August last year, the police received the public interest report from the Anti-Corruption and Civil Rights Commission and conducted an investigation, concluding in April this year that there were no grounds for charges and closing the case without indictment. However, after facing criticism for an insufficient investigation, the police decided to reopen the case and, on June 25, transferred it from Seongnam Jungwon Police Station to the higher-level Gyeonggi Nambu Provincial Police Agency.
Daewoong Pharmaceutical maintains that there were no illegal activities in its sales processes. A company representative stated, "Daewoong Pharmaceutical strictly complies with the Pharmaceutical Affairs Act and the Fair Competition Code in sponsoring academic events and holding product briefings," adding, "All such activities are transparently planned and executed in accordance with relevant regulations and internal compliance program (CP) standards, following both pre- and post-procedures."
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