Fair Trade Commission and National Assembly Research Service Urge Caution
Concerns Raised Over a "Second Tada Ban Act"
"Post-Regulation Is Preferable to a Total Ban"
Concerns about excessive regulation are growing both inside and outside the National Assembly and the government regarding the so-called "DoctorNow Prevention Act" (the revised Pharmaceutical Affairs Act), which would fundamentally prohibit telemedicine platforms from simultaneously operating pharmaceutical wholesale businesses. There are warnings that this could become a "second Tada Ban Act," with critics arguing that instead of a total ban, it is necessary to establish market order through post-regulation measures.
According to the office of Kim Hankyu, a lawmaker from the Democratic Party of Korea, on December 30, both the Korea Fair Trade Commission and the National Assembly Research Service submitted opinions stating that the proposed amendment requires careful review due to "concerns about excessive regulation" and "potential harm to consumer welfare." While both organizations acknowledged the possibility of unfair practices by telemedicine platforms, they expressed the view that completely blocking entry into the wholesale business is inappropriate.
The Fair Trade Commission stated, "A blanket ban on licensing pharmaceutical wholesale businesses for telemedicine intermediaries could restrict competition aimed at providing diverse services, stifle innovation, and ultimately harm consumer welfare. At this point, it would be preferable to establish order in pharmaceutical transactions through post-regulation of unfair trade practices, rather than imposing a fundamental ban."
The commission added, "Given that the telemedicine-related market is still in its early stages and the share of telemedicine intermediaries in the current pharmaceutical wholesale market is small, we do not believe that competition is being restricted to a concerning degree at this time." However, it also stated that issues such as overtreatment and the impact on the health insurance budget require more thorough examination.
The National Assembly Research Service categorized this amendment as a case similar to the previous "Tada Ban Act," which hindered mobility innovation. It pointed out that the demands of stakeholders have been strongly reflected, and that there is a recurring pattern of eliminating platform models-whose illegality is not clearly established within the existing legal framework-through separate legislation.
In particular, the Research Service noted, "A blanket ban on wholesale business by telemedicine platforms could raise issues of fairness with existing wholesalers, consistency within the legal system, excessive regulation of legitimate business activities, and potential violations of the principles of equality and prohibition of excessive restriction. There is also a risk that transactions could become even less transparent through indirect structures involving related wholesalers."
Instead of a total ban on wholesale business by telemedicine platforms, the Research Service proposed alternatives such as: ▲ specifying rebate clauses tailored to the platform environment; ▲ making it mandatory to report and disclose economic benefits; ▲ strengthening oversight by introducing a registration or licensing system for telemedicine intermediaries; and ▲ imposing conditional approvals or corrective orders for conflict-of-interest structures.
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