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Novartis Korea fined W56b over kickback case

PUBLISHED : May 24, 2017 - 16:13

UPDATED : May 24, 2017 - 16:44

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[THE INVESTOR] The Korean unit of Swiss drug giant Novartis on May 24 was slapped with a 55.9 billion won (US$49.62 million) fine and insurance coverage suspension for some of its drugs as the country’s Health Ministry confirmed its preliminary decision. 




The ministry said that it will suspend insurance coverage of nine variations of two drug types including Alzheimer’s drug Exelon for six months from Aug. 24 to Feb. 23 next year. It also levied a fine on 33 variations of 15 drug brands, including the leukemia treatment Glivec.

The final decision came after the ministry announced the punitive measures in April for offering 2.6 billion won of illegal rebates to doctors between 2011 and 2016.

The company was given a grace period of three months before the effective date in August to ensure a smooth transition to other medicines that can replace Novartis’ rebate-related drugs.

The ministry urged health care providers to “thoroughly prepare for the substitution of medicines and the computerized system for prescription of medicines so that patients will not have any trouble using alternative drugs.”

Novartis Korea said it "respectfully accept" the ministry's decision on administrative sanctions.

"We have taken decisive actions to drive performance with integrity, including strengthening our compliance function and developing a new customer-facing model," the company said in a statement. 


By Park Han-na (hnpark@heraldcorp.com)

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