The antitrust regulator said Thursday it has decided to slap a fine of 29.8 billion won (US$21.93 million) on JW Pharmaceutical, a local drug firm, for providing illegal rebates to local clinics.
The company had given cash, gifts and other benefits worth 6.5 billion won from 2014 and 2018 to about 1,400 hospitals and clinics nationwide if they prescribed its products, according to the Fair Trade Commission (FTC).
In addition, the company was found to have provided some 100 clinics with economic benefits worth 530 million won from 2014-2018 to have them use their products, the FTC added.
The company is also suspected of attempting to conceal such illegalities, the regulator said, adding that it reported the case to the prosecution for a further probe.
The FTC also sought prosecution investigation into CEO Shin Young-sup for the alleged practices and ordered the company to implement corrective measures.
It is the largest fine that the FTC has ever imposed against a local pharmaceutical firm for JW Pharmaceutical's "systematic and intensive" rebates.
The company had punitive measures imposed on it by the regulator back in 2007, but it repeated similar unfair practices, the FTC said, explaining the reason for the latest decision.
"Giving unfair economic benefits to doctors will lead to market distortion, as they would choose drugs that serve their own interests, rather than those appropriate for customers," the FTC said. "Such a stern punishment will contribute to the fair trade order in the drug market."
The company said in a statement that the FTC "lost balance" in making the decision compared with similar cases by other companies, and vowed to push for administrative litigation after reviewing the details.