South Korea’s health ministry has fined Swiss pharmaceutical giant Novartis 55.1 billion South Korean won (CHF48 million) for offering doctors kickbacks in return for recommending the company's drugs. The ministry suspended insurance coverage for several Novartis drugs.
The ministry said in a statement on Thursday that it suspended insurance coverage for nine variations of two drug types including Alzheimer's drug Exelon for six months, and imposed a fine on 33 variations of 15 drug brands.
The ministry said its preliminary actions could be reconsidered next month after reviewing Novartis’ response.
In reaction, Novartis Korea told Reuters that it acknowledges the ministry's statement.
"We expect the Ministry of Health and Welfare to make a final decision by the end of May and understand there may be a grace period before the effective date of up to three months," it said.
The health ministry's decision comes after the South Korean Ministry of Food and Drug Safety fined Novartis Korea CHF176,479 in March and imposed a three-month ban on the sales of some drugs as punishment for offering illegal rebates and kickbacks to doctors.
Employees of the Basel-based pharmaceutical company are accused of paying doctors rebates and bribes amounting to 2.6 billion South Korean 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.