[The Future of Telemedicine ⑤] "DoctorNow Prevention Act" on the Brink... What Is the Solution for Platform Regulation?

'Pharmaceutical Affairs Act' Amendment Stalls at National Assembly Plenary
Ministry of Health and Welfare and Ministry of SMEs and Startups Remain at an Impasse Over Wholesale Ban

Editor's noteInstead of standing in long lines in waiting rooms for hospital treatment, people now meet doctors on their smartphone screens. After being temporarily allowed during the COVID-19 pandemic and during periods of conflict between the medical community and the government, and then tested through pilot programs, telemedicine is set to be fully implemented at the end of this year. Alongside the convenience of filling medical gaps in remote areas and among vulnerable groups, there are also limitations stemming from the ban on drug delivery and concerns about the misuse and abuse of pharmaceuticals. Sharp differences in perspective also remain among the medical community, platform industry, and patient groups. Standing before a major transformation that could shake the very paradigm of the healthcare industry, this series closely examines how telemedicine is changing Korea's medical field and analyzes the challenges that must be resolved to move toward genuine innovation.

Although telemedicine has been institutionalized, the partial amendment to the Pharmaceutical Affairs Act that includes a ban on opening wholesale businesses by telemedicine platforms, commonly referred to as the "Doctor Now Prevention Act," failed to pass. As arguments clashed between those insisting that this bill, which would become a "second Tada ban law," must be blocked and those arguing that the monopolistic ecosystem of large platforms must be prevented, the fate of the bill, which had been headed for a plenary vote in the National Assembly, has become uncertain.

According to related industries on the 3rd, even the last-minute consultative meeting held on the 14th of last month for final coordination among government ministries ended without any outcome, and the "public interest logic" that telemedicine platforms must be prevented from dominating the pharmaceutical distribution market is now in direct conflict with the "innovation logic" that the growth of new industries must not be stifled. In response, the government plans to consider building a public platform that will carry out the public-interest functions of telemedicine.

Doctor Now, a telemedicine platform established in 2019, grew into the No. 1 platform in the industry through pilot telemedicine programs during the COVID-19 period. From February 2024, it entered the pharmaceutical wholesale business by establishing Bijin Yakpum, a pharmaceutical wholesaler. The justification was that if the platform directly supplied pharmaceuticals in order to solve the so-called "pharmacy merry-go-round" problem, in which patients who received telemedicine consultations wander around looking for pharmacies that stock the prescription-only drugs listed on their prescriptions, it would be able to more accurately identify the inventory status of pharmacies.

However, the response on the ground was cold. Doctor Now granted a "NOW Inventory Guaranteed" badge to pharmacies that purchased pharmaceuticals above a certain amount from its subsidiary and gave them priority exposure at the top of the app screen, and the pharmaceutical sector defined this as a clear form of new rebate. Critics pointed out that a method of sending patients only to pharmacies that buy from a particular wholesaler is no different from the under-the-table deals that used to occur between pharmaceutical companies and hospitals.

An official at the Korean Pharmaceutical Association criticized, "If a platform goes beyond being an intermediary and comes to possess the status of a supplier, pharmacies will be forced into a subordinate relationship in which they have no choice but to purchase specific drugs while watching the platform's reaction," adding, "This will ultimately restrict patients' right to choose and lead to the misuse and abuse of pharmaceuticals." The Korean Medical Association also issued an official statement, saying, "The amendment to the Pharmaceutical Affairs Act prohibits platform companies that have emerged through telemedicine from receiving rebates from pharmacy owners," and "This bill is essential to maintaining fair trade order among pharmacies and to protecting public health and safety."

"Second Coupang Prevention Act" vs "Second Tada Incident"

Opinions within the National Assembly were also divided. Lawmakers on the Health and Welfare Committee, including Democratic Party lawmaker Kim Yoon, who introduced the bill, argue that large platforms must be prevented from monopolizing the market by taking control of manufacturing, distribution, and intermediation all at once. In particular, they maintain that it is unacceptable to allow platforms in the pharmaceutical sector, which is directly linked to people's lives, to encourage prescriptions of non-reimbursable drugs in order to maximize profits.

On the other hand, lawmakers belonging to "Unicorn Farm," a startup research support group that includes Democratic Party lawmaker Kim Hankyu, are concerned this could become a "second Tada incident." They argue that killing off companies that began operating within the bounds of legality through ex post facto regulation undermines the state's will to foster new industries.

The Korea Venture Business Association also takes the position that the platform's practices of inducing and soliciting patients to specific medical institutions and pharmacies, as well as market-disrupting behavior by pharmaceutical wholesalers, can be regulated simply by revising existing regulatory provisions. The Ministry of SMEs and Startups likewise maintains that "a blanket ban on wholesale licenses itself is excessive regulation and an infringement on the freedom to conduct business," and argues that it is more reasonable to prepare ex post sanctions.

In response, the Ministry of Health and Welfare has countered that "considering the need for consistency with current law, which prohibits medical institutions and pharmacy owners from engaging in wholesale business, granting an exception only to platforms would be a special favor," deepening the conflict between ministries. As a result, whether the Office for Government Policy Coordination steps in to mediate and how the extraordinary National Assembly session to be held after the Lunar New Year holiday proceeds are expected to be the key turning points in this debate.

If the Doctor Now Prevention Act passes in its original form, Doctor Now will immediately have to give up either its platform business or its wholesale business. It is highly likely that its subsidiary Bijin Yakpum will be sold off or proceed toward closure. Practices such as placing specific pharmacies at the top of the app screen or attaching an "Inventory Guaranteed" badge to attract patients will also be prohibited. However, the method of providing information primarily on pharmacies that are closest to the patient's location or have the highest ratings can continue.

Conversely, if the bill fails to pass or is drastically revised, the influence of platforms is expected to grow even further. Concerns are also being raised that commercialization will accelerate, with platforms later demanding brokerage fees or subscription charges, or linking accumulated medical consultation data with the insurance industry and the health functional food market to generate profit. For this reason, some experts argue that it is necessary to open an institutional pathway that allows platforms to receive fair compensation for their technological innovation, while at the same time ensuring that they do not undermine the public nature of healthcare.

Professor Park Sungmin of the Seoul National University Graduate School of Public Health pointed out, "Telemedicine platforms are clearly an innovation, but if their revenue model remains at the level of pharmaceutical wholesale margins, that is distribution business, not medical innovation," and warned, "Problems that arise when platforms adopt wholesale margins as their revenue model are directly connected to patient health."

This content was produced with the assistance of AI translation services.