The current Act stipulates that under certain circumstances, such as where a medical institution founder or pharmacy founder (hereinafter “medical institution founder, etc.”) owns more than 50%, in stocks or equity, of a drug wholesaler that is a juristic person or has other special relations, the drug wholesaler shall not sell drugs to the medical institution or pharmacy concerned.

The initial intention of introducing this system was to prevent medical institution founders, etc., with high equity in wholesalers that are juristic persons from using their equity relationship or position as a related party to increase the fair market value of drugs or disturb the orderly distribution of drugs. It was introduced in the same context as the provision prohibiting medical institution founders, etc., from obtaining a drug wholesaler permit.

However, the reality is that a medical institution founder, etc., with less than 50% stock or equity ownership of a drug wholesaler can still exercise control over the drug wholesaler and force it to engage in exclusive transactions with the medical institution etc., consequently increasing the fair market value of drugs, increasing the burden of health expenses, and negatively influencing health insurance finances while also eliminating the drug supply potential of other drug wholesalers and otherwise disrupting the orderly distribution of drugs or inducing unfair transactions. This Act prescribes that no hospital or pharmacy shall operate a drug wholesaler, and that no drug wholesaler shall operate a hospital or pharmacy. It is necessary to consider the fact that allowing medical institution founders, etc., to use their equity relationship with drug wholesalers to indirectly dominate wholesale trade undermines the fairness of the law.

Accordingly, the Amendment prescribes that where a medical institution founder, etc., owns stocks or equity in a drug wholesaler that is a juristic person, the drug wholesaler shall not sell drugs to the medical institution or pharmacy, thereby aiming to reduce the burden of health expenses and prevent unnecessary expenditures in health insurance finances. It also aims to eliminate unfair transactions, ensure orderly distribution of drugs, and achieve many other policy objectives by changing the system.

Details

Where a medical institution founder, etc., owns stocks or equity in a drug wholesaler that is a juristic person, the drug wholesaler shall not, directly or through another drug wholesaler, sell drugs to the medical institution or pharmacy concerned (Article 47 (4) 1 c).

Where a medical institution founder, etc., owns stocks or equity in a drug wholesaler that is a juristic person, the drug wholesaler shall not, directly or through another drug wholesaler, sell drugs to the medical institution or pharmacy concerned (Article 47 (4) 1 c).