Controversies have erupted as the National Assembly is likely to pass the “Pharmacist Law Amendment” aimed at Dr. Now, the largest non-face-to-face medical care platform company in Korea. It started when the ruling party is pursuing a bill to prevent the pharmaceutical distribution business that Dr. Now has been operating legally for over a year due to the possibility of a “new type of rebate.” Dr. Now sent an appeal to all members of the National Assembly on the 28th to actually complain about the crisis of business suspension. The startup industry points out that it is the “second anti-tada law” because a bill is being promoted that prohibits businesses that have already been lawfully authorized without a legal basis due to concerns.
On the 29th, according to the medical community and the startup industry, an amendment to the Pharmacist Law prohibiting non-face-to-face medical platform companies from co-operating in the pharmaceutical wholesale business caused an emergency in related industries such as Dr. Now ahead of the passage of the National Assembly plenary session. This bill, proposed by the representative of the Democratic Party Kim Yoon and voted on by the National Assembly Health and Welfare Committee on the 20th, is called the “Doctor Now Prevention Act.” This law prohibits the act of a platform performing a pharmaceutical wholesale function or supplying pharmaceuticals through wholesalers that have special relationships with partner pharmacies. Dr.Now and Meraki Place, which have been operating a wholesale business legally with permission from the Ministry of Health and Welfare, will become virtually impossible to maintain their existing business model if the amendments are implemented.
Dr.Now established the pharmaceutical wholesaler Bi-Pharmaceutical as a subsidiary in March of last year and absorbed and merged earlier this year. Most pharmacies mainly handle medicines prescribed by nearby hospitals. In a situation where drug delivery has been blocked, patients who have received non-face-to-face medical treatment have had to search for pharmacies with specialty drugs specified in prescriptions. The purpose of non-face-to-face medical treatment, which was introduced to fill medical gaps during public holidays or late-night hours, was overshadowed, causing a strange phenomenon called “pharmacy hit-and-run.”
If the platform directly supplies specialty drugs, I wonder if it will be possible to more accurately grasp the inventory status of pharmacies. It was based on this judgment that Dr.Now entered the pharmaceutical wholesale business. Currently, there are more than 3200 pharmacies that have partnered with Dr. Now. Among them, more than 1200 are receiving pharmaceuticals from Bijin Pharmaceuticals, a subsidiary of Dr.Now. These pharmacies can check the remaining inventory in real time based on supply volume and dispensing history. Consumer satisfaction was also high because the prescribed medicine was out of stock, so there was no need to go in vain.
However, it was pointed out that Dr. Now drives prescriptions to specific pharmacies through this business model. It may violate the Pharmacist Law as well as the Fair Trade Act by first exposing partner pharmacies to platform users. This controversy grew rapidly due to the National Assembly's state audit last year. Dr. Now CEO Jung Jin-woong refuted the point that preferential treatment was given to partner pharmacies at the time of the National Inspection, saying, “Specific pharmacy preferential treatment disputes, such as inventory confirmation, are measures to reduce the inconvenience of patients calling 10 pharmacies without preferential treatment at specific pharmacies due to a map-based exposure structure.” However, the voices from the Korean Pharmaceutical Society that “will promote indiscriminate non-face-to-face medical treatment and that pharmacies will be subordinated to the platform” were encouraged. Eventually, an amendment to the Pharmacist Law prohibiting non-face-to-face medical treatment platforms from entering the pharmaceutical wholesale business was proposed, leaving the National Assembly to pass the plenary session. The ruling party argues that if the platform is directly involved in the distribution of pharmaceuticals, it can lead to new rebates that give preferential treatment to specific pharmacies or encourage specific pharmaceutical companies to prescribe and sell products.
However, apart from the intention to protect the fairness of drug distribution, there are still doubts about the rationality of the method. The venture and startup industry sees this amendment as similar to the “Tada Prohibition Act,” which blocked mobility innovation in 2020 in that it targets specific companies and subsequently outlaws businesses that are already in operation. In a statement, the Venture Business Association strongly criticized it as “legislation that prohibits the business itself that has already been lawfully authorized due only to concerns raised without a legal basis, which greatly violates the principles of the rule of law,” and “another dangerous precedent that can be prohibited at any time, even if doing business in compliance with the law, can be prohibited at any time.” It is pointed out that all acts of concern, such as rebates, collusion, and attracting patients, can already be regulated and punished under current laws such as the Pharmacist Law, Fair Trade Act, and Medical Care Act, so prohibiting the legal business itself is a double regulation even though there are sufficient post-regulation measures. The Korea Startup Forum also argued that “it is very unfortunate that legislation was promoted even though the concerns raised during the state audit last year have already been faithfully addressed and the situation of concern did not actually occur,” and “it is not reasonable to introduce prior regulations just because there is no precedent.” The lack of convenience for consumers is also a problem. If the amendments are implemented and the supply of medicines on the platform is blocked, pharmacies must manually enter drug inventory into the platform. Since the accuracy is lower than when real-time inventory checks were possible, the inconvenience for users is bound to increase.
There are currently only 20 startups left, which had more than 50 related startups during the COVID-19 pandemic due to delays in legalization discussions. Since platform regulations have been drastically tightened in medical law amendments that have crossed the threshold of the National Assembly, it is difficult to laugh even in the face of institutionalizing non-face-to-face medical care, which has been a long-standing goal. Businesses that want to operate a non-face-to-face medical intermediary must report to the Ministry of Welfare, and certification is mandatory if the size is greater than a certain size. In addition to obligations such as prohibiting recommending or inducing medical institutions and pharmacies, prohibiting the provision and receipt of financial benefits, prohibiting intervention in medical judgments, minimal collection of personal information, and immediate destruction of personal information, strong criminal penalties are applied compared to the current medical law system, such as 3 to 5 years in prison and a fine of 30 million to 50 million won in case of violation.
? “Pharmacy hit-and-run solution” vs. “novel rebate” Doctor Now prevention method, controversy [What do you think]
