South Korea to fine Novartis unit over unfair drug promotions

SEOUL South Korea’s antitrust regulator said it would fine Novartis’ local unit 500 million won ($444,089) for alleged unfair promotions, in another setback for the Swiss drugmaker that was fined earlier this year over kickbacks to doctors.

The Korea Fair Trade Commission added in a statement on Thursday that it would file a complaint against the company with prosecutors. It said that Novartis Korea had spent 7.6 billion won to fund overseas trips by medical practitioners to attend academic conferences from 2011 to 2016.

Novartis Korea selected recipients for the funding based on their prescription of the company’s drugs, or anticipated prescriptions of the drugs, the regulator said.

“They have used support for overseas academic congresses as unfair promotional means,” the regulator said.

Under South Korea’s fair trade rules, a drug maker is not allowed to provide “direct support” to individuals participating in academic congresses, although a company can donate funds to industry associations to support them.

“Based on our own investigation, we found that some overseas congress trips by healthcare professionals were funded in a way that did not fully comply with industry self-regulation standards. This conduct was also in violation of our policies and inconsistent with our culture,” Novartis said.

Novartis said it had stopped such funding practices.

“We have also reinforced our compliance function, re-designed the field force evaluation system and are currently developing a new customer-facing model to drive performance with integrity,” it added in its statement.

Earlier this year, South Korea’s health ministry fined Novartis 55.9 billion won after prosecutors indicted its local unit for offering doctors kickbacks of 2.6 billion won. The ministry also suspended insurance coverage for some of its drugs for six months starting late August.

($1 = 1,125.9000 won)

(Reporting by Hyunjoo Jin- Editing by Himani Sarkar)