Fair Trade Commission and National Assembly Research Service Call for Caution
Concerns Raised Over "Second Tada Prohibition Act"
"Post-Regulation Preferable to a Blanket Ban"
Concerns about excessive regulation are growing both inside and outside the National Assembly and government regarding the so-called "Doctor Now Prevention Act" (the amendment to the Pharmaceutical Affairs Act), which fundamentally prohibits telemedicine platforms from engaging in pharmaceutical wholesale business. Critics warn that this could become a "second Tada Prohibition Act," and voices are emerging that, rather than a blanket ban, post-regulation should be used to establish market order.
According to the office of Kim Hankyu, a member of the Democratic Party of Korea, on December 31, the Korea Fair Trade Commission and the National Assembly Research Service have submitted opinions stating that the amendment requires careful review due to concerns such as "harm to consumer welfare" and "excessive regulation." While both institutions agree on the possibility of unfair practices by telemedicine platforms, they maintain that blocking entry into the wholesale business itself is an inappropriate approach.
The Fair Trade Commission stated, "A total ban on granting pharmaceutical wholesale licenses to telemedicine intermediaries could restrict competition aimed at providing diverse services, stifle innovation, and ultimately harm consumer welfare. At this point, it is preferable to establish order in pharmaceutical transactions through post-regulation of unfair trade practices rather than an outright ban."
The Commission added, "Given that the telemedicine-related market is still in its early stages and telemedicine intermediaries currently account for only a small share of the pharmaceutical wholesale market, we do not believe there is a significant concern about restricting competition at this time." However, it also noted that issues such as overprescription and the impact on the health insurance system require more thorough review.
The National Assembly Research Service classified this amendment as a case similar to the previous "Tada Prohibition 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-which are not clearly illegal under the existing legal framework-through separate legislation.
In particular, the Research Service pointed out that "a blanket prohibition of telemedicine platforms from engaging in wholesale business could raise issues of fairness and legal consistency with existing wholesalers, lead to excessive regulation of legitimate business activities, and spark debates over violations of equality and the principle of proportionality. There is also a risk that transactions could become more opaque through indirect structures involving related wholesalers."
Instead of a total ban on telemedicine platforms engaging in wholesale business, the Research Service proposed alternatives such as: ▲specifying rebate provisions tailored to platform environments; ▲mandating the reporting and disclosure of 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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