What does it cost a drugmaker in South Korea to pay for English-language training? Maybe a trip to the pokey.
In what has been termed the worst pharmaceutical kickback scandal in years, 7 former and current executives of South Korea's largest drugmaker, Dong-A Pharmaceutical, have been indicted for paying 4.8 billion won ($4.4 million) in kickbacks. GlaxoSmithKline ($GSK) owns about 10% of Dong-A. About 75 doctors are facing sanctions and dozens of others some action, The Korea Times recently reported. To avoid discovery of cash payments, authorities said the bribes were paid in the form of luxury watches, vacations and even the cost of language training for the children of hospital administrators.
Today, two associations representing doctors weighed in, saying it was not entirely the doctors' fault because government policies set payments to them so low, reports the Korea JoongAng Daily. The Korean Medical Association and Korean Academy of Medical Sciences said they will hash out some measures to discipline members who take bribes. But they also lamented, "To eradicate medicine rebates, all these structural causes must be removed." They said getting doctors to kick the kickback habit "depends on the government and pharmaceutical companies."
The issue of paying bribes to get business is one that has caught up plenty of Big Pharma players, who have been or currently are being investigated by U.S. authorities for violations of the Foreign Corrupt Practices Act. Pfizer ($PFE), Johnson & Johnson ($JNJ) and Novo Nordisk ($NVO) have settled probes for payments ranging from $9 million to $70 million. But with drugmakers moving further into emerging markets where business can be extremely difficult to advance without some quid pro quo, there is a question of whether bribes--and fines for paying them--are going to become part of the cost of doing business.
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