South Korea imposes temporary sales ban on Novartis

Novartis employees are accused of paying South Korean doctors rebates and kickbacks amounting to 2.6 billion won (CHF2.3 million) between 2011 and 2016 Keystone

The South Korean Ministry of Food and Drug Safety has fined pharmaceutical giant Novartis 200 million won (CHF176,479) and imposed a three-month ban on the sales of certain drugs as punishment for offering illegal rebates and kickbacks to doctors.

“Novartis acknowledges and accepts the decision of the Korean Ministry of Food and Drug Safety,” a company spokesperson told swissinfo.ch on Thursday.

Employees of the Basel-based pharmaceutical company are accused of paying doctors rebates and kickbacks amounting to 2.6 billion won (CHF2.3 million) between 2011 and 2016 in return for recommending the company’s products. Six senior employees are under investigation and face criminal trial. In addition, South Korea’s Fair Trade Commission is investigating whether Novartis’ sponsorships of doctors’ travel to conferences constitute a violation of fair trade laws.

The sales ban concerns 12 variations of three types of drugs and will last from March 17 to June 16.

Novartis appears to have got off lightly. South Korean laws ban drug companies from providing doctors rebates or discounts for the drugs they prescribe. Under the nation’s law, drug companies that give rebates or discounts to physicians who prescribe their products can have the sale of those products banned for up to six months.

“We have acknowledged and regret that certain associates in Korea took actions in violation of our policies and inconsistent with our culture and the expectations society has for us and our industry. We do not tolerate misconduct and are continuing to invest significant efforts to fully embed a culture of compliance throughout our Korean organization,” said the Novartis spokesperson.