[Alpha Biz= Paul Lee] South Korean police have launched a raid on Daewoong Pharmaceutical over allegations that its sales representatives offered illegal rebates to healthcare providers. The company denies any wrongdoing and says it will cooperate fully to prove its compliance with the law.



On July 17, the Gyeonggi Southern Provincial Police Agency’s criminal task force conducted a search and seizure operation at Daewoong’s headquarters in Gangnam, Seoul, as well as its subsidiaries and related third-party offices. Authorities are collecting documents and digital data related to sales practices.



The investigation stems from a whistleblower complaint submitted to the Anti-Corruption and Civil Rights Commission in April last year. According to the complaint, from January 2022 to December 2023, approximately 130 Daewoong sales staff allegedly offered rebates to over 380 hospitals and clinics in exchange for prescribing the company’s new drugs. The total amount involved in the alleged scheme has not been disclosed.



This case was initially closed in April 2024 after police found no evidence of wrongdoing. However, facing public criticism over the investigation's shortcomings, police reopened the case and transferred it to the Gyeonggi Southern Police Agency for further scrutiny.



Daewoong Pharmaceutical maintains that all its promotional activities were conducted in accordance with South Korean pharmaceutical regulations. A company spokesperson stated, “Daewoong strictly adheres to the Pharmaceutical Affairs Act and Fair Competition Code in all academic event sponsorships and product briefings. These activities are transparently executed based on internal compliance standards, including pre- and post-event procedures.”



The investigation is ongoing.

 

 

 

[ⓒ 알파경제. 무단전재-재배포 금지]