Distributors Association plans "strong response"

…conflict intensifies as Janssen Korea implements margin reduction

Response measures are being discussed in meetings, such as the Wednesday Forum·regional associations

Chairman Park Ho-young said, "It has gone beyond the scope of a simple negotiation…the association will respond"

The Korean pharmaceutical distribution industry is rallying around the Korea Pharmaceutical Distributors Association in response to Janssen Korea's reduction of distribution margins.

 

Park Ho-young, Chairman of the Korea Pharmaceutical Distributors Association, described Janssen Korea's margin reduction as an arbitrary act rather than a negotiation, indicating a firm stance of strong countermeasures.

 

The Wednesday Forum (Chairman Nam Sang-gil), a private gathering within the pharmaceutical distribution industry, recently held its regular monthly meeting in June to discuss key issues, including countermeasures against Janssen Korea's margin reduction, and foster camaraderie among members.

 

At the forum, opinions were raised that small and medium-sized hospitals must seek alternatives for Janssen Korea products, such as the biologic Remicade.

 

Additionally, it was argued that with the reduced distribution margins, pharmacy deliveries are practically difficult, thus necessitating the minimization of orders for Janssen Korea pharmaceuticals.

 

Notably, Chairman Park Ho-young of the Korea Pharmaceutical Distributors Association also attended the meeting to explain the association's response plan to the issues threatening the distribution industry.

 

Park stated, "The 2%p distribution margin reduction being pushed by Janssen Korea goes beyond the scope of a simple negotiation; it is an act of tyranny." Park added, "Member companies have conveyed their concerns to the association.

 

The association will step forward and respond proactively." He further emphasized, "The association will exert all its capabilities to eliminate elements that threaten the pharmaceutical distribution industry." Park repeatedly urged unity among member companies, stating, "If we fail to properly defend against this Janssen Korea issue and fail to demonstrate the united power of the distribution industry, a greater crisis will come in the future." An advisor to the Wednesday Forum who attended the meeting also supported Chairman Park, saying, "Now is the time to build a strong front, centered on the association, against Janssen Korea's attempt to cut distribution margins." He added, "Sanctions are also necessary for member companies that act against the association's policy." Following the Wednesday Forum, the Korea Pharmaceutical Distributors Association plans to hold a series of follow-up response meetings.

 

The Seoul Pharmaceutical Distributors Association will have an expanded board meeting on the 18th to discuss key issues in depth, including the Janssen Korea margin reduction issue.

 

The Seoul Pharmaceutical Distributors Association, which had initially sought countermeasures through hospital branch meetings, is said to have shifted the discussion among the board of directors, considering the seriousness of this matter.

 

The Gyeonggi-Incheon Pharmaceutical Distributors Association also expressed deep concern about Janssen Korea's move to reduce distribution margins.

 

It will lend its support to the association's response, including preparing a statement of opposition.

 

The heads of regional branches under the Korea Pharmaceutical Distributors Association are expected to meet next Monday, and pharmaceutical distributors in the Busan, Gwangju, and Daegu regions are also expected to voice their concerns, centered around the association.

 

As they have delegated negotiation authority for margin reductions to the association, regional pharmaceutical distributors are likely to strengthen their resolve to participate actively.

 

A high-ranking official from the Korea Pharmaceutical Distributors Association warned, "The latest margin reduction is not just a simple profit structure adjustment; it is an issue directly linked to the survival of small and medium-sized distributors," and added, "If we fail to withdraw Janssen Korea's measure this time, a crisis will sweep over the entire distribution industry." He further pointed out, "Margins are like a cost concept for distributors, and pharmaceutical companies must accurately recognize this concept."