The Fair Trade Commission decided to impose a correction order and a fine of 240 million won on the JW New Drug (JW Chinese and foreign new drug), which provided unfair rebates to hospitals and clinics for the purpose of increasing prescriptions.
JW New Drug, a mid-sized company operating in the pharmaceutical manufacturing industry, is an affiliate of JW Group (the flagship company JW Joongwae Pharmaceutical) with sales of 77.8 billion won as of the end of 2017.
According to the Fair Trade Commission, JW New Drug provided unfair rebates worth about 800 million won to 90 hospitals and clinics nationwide for the purpose of increasing the prescription of obesity treatment drugs it manufactures and sells from January 2014 to April 2017.
According to their efficacy, obesity treatments are categorized into appetite suppressants, fat absorption suppressants, energy metabolism promoters, and satiety inducing agents, and have a market size of about 1342 billion won as of 2019.
In the early 2010s, the market size declined due to the rise of stability issues such as cardiovascular side effects, but since then, the trend has been steadily increasing as new obesity treatments are developed.
JW New Drug handles a total of 18 types of obesity treatments such as Penterme, and appetite suppressants are flagship products that record annual sales of around 1 billion won. In the market as a whole, products such as Novo Nordisk’s Saxenda (42.6 billion won), Daewoong Pharmaceutical’s dietamine (9.5 billion won), and Huons Huttermin (6.2 billion won) are the top sales.
As a result of the FTC investigation, JW New Drug contracts a certain amount of prescription with hospitals and clinics, and in return, provides financial benefits such as cash and goods support corresponding to a certain percentage (20-35%) of the contracted prescription amount. did.
First of all, when the salesperson in charge conducts the preliminary support and publishes a draft, the head of the sales headquarters approves the review and preliminary support, and the person in charge of the sales management department executes the pre-support. Afterwards, the profits were provided in the order that the salesperson delivered the pre-support amount and managed the performance.
In particular, after the initial application, it even checked whether it was prescribed according to the actual contract, and if the hospital or clinic did not prescribe according to the contract, the implementation was managed by delaying the signing of a new contract or lowering the rate of prior assistance.
The Fair Trade Commission reports the acts of JW New Drug as an act of attracting customers of competitors by providing unfair profits (Exclusive Regulation and Fair Trade Act Article 23, Paragraph 1, No. 3), and corrective orders (order prohibiting acts) and penalties. (240 million won) The imposition was decided.
The Fair Trade Commission said, “By taking strict measures to provide unfair rebates in the obesity treatment market, which is a prescription drug, we will correct the competitive order and contribute to protecting consumer interests.” We will continue to strengthen surveillance, and if any violations of related laws are discovered, we will sanction them according to the principle.”