I am facing an investigation into pharmaceutical rebates.

Hello, we are providing an answer regarding pharmaceutical rebates.

A pharmaceutical rebate refers to the act of a pharmaceutical company or the like providing money, goods, entertainment, and the like to medical practitioners and others in order to increase drug sales.

A pharmaceutical rebate is an unlawful act for which both the provider and the recipient may be punished.

Depending on the amount received, suspension of qualification for up to 1 year may be imposed, and the offender may be subject to imprisonment of up to 3 years or a fine of up to 30 million won.

In particular, the provision of devices, cash, gift certificates, entertainment, travel, and the like may be regarded as a rebate, and even if it is argued that the intent of the provision involved no ‘quid pro quo,’ the mere fact of having received it may be problematic.

However, exceptions may include the provision of samples of drugs and medical devices, support such as transportation and meal expenses for presenters at academic conferences, the provision of drugs for clinical trials and research funding, the provision of food, beverages, and souvenirs within a certain limit at product presentations, discounts within a certain rate according to payment terms, the provision of honoraria for post-marketing surveillance approved by the Food and Drug Administration, and the provision of points within 1% when a credit card is used.

If you are facing an investigation, you first need to accurately organize matters such as your past history of receipts, the timing, and any connection with contracts with related companies or with sales activities, and to review whether the provision of the device was in fact intended to induce treatment or prescriptions and whether it falls under an exception.

During the investigation by the investigative authorities or the health authorities, you should prepare a statement of circumstances or a written opinion to clearly explain the facts, avoid unfavorable statements, and respond carefully.

At our firm, medical attorneys experienced in numerous cases relating to pharmaceutical rebates organize the case-related materials from the outset and provide a one-stop legal service, from administrative dispositions to defense against criminal punishment.