CONTENTS
- 1. Pharmaceutical Rebates | Shift in the Risk Assessment Structure for Rebates
- - The Core Structure of the Change in Rebate Criteria
- 2. Pharmaceutical Rebates | Changes in Related Additional Provisions
- - The Core Criteria That Remain in Place
- 3. Pharmaceutical Rebates | The Significance of the Regulatory Change
- - The Direction of Corporate Response, from "Reactive Response" to "Structural Management"
- - The Assistance of Daeryun Law Firm LLP
1. Pharmaceutical Rebates | Shift in the Risk Assessment Structure for Rebates
As the assessment criteria for pharmaceutical rebates become more refined, the framework is changing so that a company's internal control system and level of compliance are also reviewed comprehensively.
On March 26, 2026, the Ministry of Health and Welfare gave advance notice of legislation for proposed amendments to the Enforcement Decree and Enforcement Rules of the Special Act on the Fostering and Support of the Pharmaceutical Industry, and at the same time gave administrative notice of a proposed amendment to the Regulations on the Certification of Innovative Pharmaceutical Companies.
This reform is regarded not merely as an adjustment of certification criteria but as a measure that reorganizes the overall evaluation system of the pharmaceutical industry, and it has drawn the industry's attention in particular because the certification criteria related to pharmaceutical rebates may change substantively.
Until now, issues of pharmaceutical rebates have tended to be confined to criminal and administrative risk, but they appear poised to be recast as a key risk factor that directly affects a company's maintenance of certification and even drug pricing policy.
The Core Structure of the Change in Rebate Criteria
The most important change in this amendment is that the reference point for the review criteria related to pharmaceutical rebates has been changed from the "time of the administrative disposition" to the "time the violation ended".
Previously, an administrative disposition received more than five years before the point of the certification extension review was excluded from review, but the proposed amendment sought to shift the criterion to the more substantive factor of the "time the violation ended."
In other words, the intent is to clarify the criteria for assessing pharmaceutical rebate risk by excluding from review cases in which a certain period has elapsed since the time the violation ended.
This change can be seen as reflecting a legislative trend toward securing consistency with the period during which sanctions may be imposed under administrative law.
At the same time, from the company's perspective, the way past rebate histories are evaluated has changed, placing companies in a position where they must reorganize their certification strategies.
Category | Former Criterion | Amended Criterion |
Criterion for Exclusion from Review | Exclusion of an "administrative disposition" issued more than five years before the point of the certification extension review | Exclusion of a "violation ended" more than five years before the point of the certification review or the certification extension review |
Reference Factor for the Criterion | Centered on the time of the administrative disposition | Centered on the time the violation ended |
Treatment Where a Lawsuit Is Filed | The date the judgment became final was deemed the date of the administrative disposition | The relevant provision is deleted |
While Administrative Litigation Is Ongoing | No separate provision | A conditional certification is permitted under which the certification may be revoked within a certain period upon a dismissal judgment or ruling |
2. Pharmaceutical Rebates | Changes in Related Additional Provisions
In this amendment, not only the assessment structure related to pharmaceutical rebates but also the method of handling certification in administrative dispute situations has been changed.
Previously, where a lawsuit was filed against a rebate-related administrative disposition, the date the judgment became final was deemed the time of the administrative disposition, but the relevant provision is to be deleted.
This means that a strategy in which a company manages its certification risk by delaying the timing of a disposition through litigation may no longer be effective.
In addition, a conditional certification system has been introduced under which certification or an extension of certification is possible under certain conditions even while an administrative appeal (a pre-litigation review before an administrative agency, comparable to an administrative appeal or agency review in common-law systems) or administrative litigation is ongoing, while allowing the certification to be revoked within a certain period if a dismissal ruling or judgment subsequently becomes final.
This is interpreted as an institutional mechanism that partially guarantees corporate activity even while a dispute related to pharmaceutical rebates is ongoing, while at the same time controlling subsequent risk.
The Core Criteria That Remain in Place
Meanwhile, the basic intensity of regulation regarding pharmaceutical rebates is expected to be maintained.
The criteria for the number and amount of rebate-related administrative dispositions over a certain recent period, measured as of the point of the certification review, still apply, and where they exceed a certain level, restrictions arise in obtaining or maintaining certification.
In particular, the amount of economic benefits provided and the number of dispositions still operate as important reference factors, so it is more appropriate to understand this as a refinement of the evaluation method rather than to interpret it as a formal easing of the criteria.
Ultimately, the issue of pharmaceutical rebates can be seen as establishing itself as a factor for evaluating a company's level of internal control and its overall compliance system.
3. Pharmaceutical Rebates | The Significance of the Regulatory Change
This institutional reform shows that the policy perspective on pharmaceutical rebate risk is changing.
Whereas the past approach was centered on punishing individual violations, the current direction shifts toward comprehensively evaluating a company's ongoing ethics, transparency, and even its level of internal control.
In particular, in a situation where Innovative Pharmaceutical Company certification is directly tied to drug pricing policy and market competitiveness, the issue of pharmaceutical rebates appears likely to operate as a key variable affecting a company's business strategy.
The Direction of Corporate Response, from "Reactive Response" to "Structural Management"
This proposed amendment conveys to pharmaceutical companies the message that pharmaceutical rebate risk is no longer a matter to be addressed after an incident occurs, but a structural risk that must be managed in advance.
Companies must not only manage their rebate-related histories but also review their overall sales and marketing structures and reorganize their internal control systems.
In particular, there is a need to systematically manage risks that may arise in practical areas such as external distribution structures, transaction methods with medical institutions, and promotional activities.
The Assistance of Daeryun Law Firm LLP
Pharmaceutical rebates are an area in which complex legal risks, including criminal punishment, administrative dispositions, and revocation of certification, may arise simultaneously, so a single line of response is not sufficient.
In particular, in a situation where certification criteria and the policy environment are changing, it is crucial to redesign the company's overall compliance system, going beyond responding to individual cases.
Through the collaboration of attorneys experienced in medical matters who hold a physician's or pharmacist's license and thus possess a deep understanding of the pharmaceutical and bio industries, together with corporate attorneys and related legal experts, Daeryun Law Firm LLP provides integrated advice covering not only criminal and administrative responses related to pharmaceutical rebates but also certification maintenance strategies, the establishment of internal control systems, and the review of contractual structures.
In addition, by organically linking investigation responses, responses to administrative dispositions, and certification risk analysis, the firm supports companies in reducing the complex risks they may face.
In a changing regulatory environment, pharmaceutical rebate risk is a factor directly tied to a company's sustainability.
Daeryun Law Firm LLP will provide practical legal advice and strategic response measures so that companies can conduct their business stably.
