Bill banning pharma wholesale platforms

Minister Jeong Eun Kyeong logically persuaded both ruling and opposition party members at the Legislation and Judiciary Committee session

Minister Jeong said, "Misuse of the platform's immense authority may cause unfair transactions of prescription·dispensed drugs"

Prevention of potential criticism of half-baked regulation of non-face-to-face healthcare

Rep. Kim Yoon proposed the 'Doctor Now Bejin Pharm Prevention Act' and summoned Doctor Now to the Parliamentary Inspection…Rep. Seo Young-kyo has publicised the text message regarding the wholesaler website

Minister of Health and Welfare Jeong Eun Kyeong, Rep. Kim Yoon of the Democratic Party of Korea, and Rep. Seo Young-kyo of the Democratic Party of Korea (from left)

​"This bill is not a second 'Tada Ban Law,' as mentioned by Rep. Shin Dong-uk in the press. It is not intended to prohibit the non-face-to-face healthcare platform itself, but rather to impose restrictions to solve problems arising when a platform operates a pharmaceutical wholesale business. Currently, the establishment of medical institutions and pharmacies is also currently prohibited from engaging in wholesaling."

With the formal legislation bill for non-face-to-face healthcare and the bill banning intermediary platforms from establishing pharmaceutical wholesale (the so-called 'Doctor Now Bejin Pharm Prevention Act') passing the National Assembly's Legislation and Judiciary Committee, the evaluation is that "the government has achieved results in legislation that guarantees the safety of public pharmaceuticals."

Minister of Health and Welfare Jeong Eun Kyeong addressed questions from both ruling and opposition party members in the Legislation and Judiciary Committee on the afternoon of November 26. It is reported that the Minister said, "The platform wholesale prohibition act is not a second 'Tada Ban Law,' with a firm stance, remaining calm, and giving logical and clear explanation of the potential side effects if the bill failed to pass led to its passage by the Committee.

The ruling Democratic Party of Korea also played a major role, directly proposing the regulatory bill (Rep. Kim Yoon) and endorsing the Minister's philosophy and concerns through supportive questioning (Rep. Seo Young-kyo). This combined effort pushed through the necessary legislative act to establish a comprehensive non-face-to-face healthcare environment.

The government and the ruling party effectively collaborated to proactively block the potential criticism of having a 'impractical non-face-to-face care bill,' which they would have faced if the platform wholesale prohibition act had not passed.

The amendment to the Medical Service Act (institutionalizing non-face-to-face healthcare) and the amendment to the Pharmaceutical Affairs Act (prohibiting intermediary platforms from establishing wholesalers) are expected to be put to a vote and processed in the National Assembly plenary session on November 27.

If approved by the plenary session without issue, all necessary parliamentary procedures for the legislation will be complete. Following government transfer and Cabinet Meeting approval, the laws will be announced next month (December). The implementation dates for both the Non-face-to-face Care Act and the Doctor Now Bejin Pharm Prevention Act are set to "one year from the date of government promulgation," meaning they will officially take effect in December 2026.

Minister Jeong's firm stance... "Medicine is a public good, platform must not be abused"

Throughout the Legislative and Judiciary Committee meeting, Minister Jeong logically persuaded the National Assembly, explaining why non-face-to-face healthcare intermediary platforms must be prohibited from engaging in wholesaling and detailing the anticipated side effects if it were allowed.

Minister Jeong's core argument was that the bill prohibiting the concurrent operation of a platform and a wholesale business is not intended to regulate the non-face-to-face care intermediary industry, which is a new and innovative sector. Instead, it is a preventive law designed to prevent platforms from abusing their immense authority to control the distribution, prescribing, and dispensing of pharmaceuticals, which are considered a public good, for unfair profit.

In explaining this, Minister Jeong pointed to the precedent of the domestic market-leading platform, Doctor Now, which had already caused controversy by establishing the pharmaceutical wholesaler Bejin Pharm as a subsidiary and by entering the drug distribution market.

Doctor Now's operation of Bejin Pharmacy was strongly opposed by the pharmacists' community and caused public controversy over fair pharmaceutical distribution. It ultimately served as a critical justification for the Legislation and Judiciary Committee's amendment to the Pharmaceutical Affairs Act.

"Platform operators possess far greater influence than doctors or pharmacies," Minister Jeong explained. "They can use their affiliated pharmacies or medical institutions to influence the prescribing or dispensing of specific drugs. A case has already occurred where a platform operator, by concurrently operating a pharmaceutical wholesaler, induced affiliated pharmacies to source drugs through that wholesaler."

Minister Jeong added, "This could become a form of unfair trade (illegal pharmaceutical rebates) and serve as an incentive to use specific drugs. The concern is that the platform, with its enormous power and influence, could impact physician prescribing and pharmacy dispensing. This power could be misused, for example, if the platform receives investment from pharmaceutical companies."

Minister Jeong stressed, "We sought to address these issues preventively during the introduction of the new system because the misuse of the platform business could affect drug transactions, prescribing, and dispensing, all of which are considered a public good. It would ultimately have a negative impact on patients. This is consistent with the prohibition on medical institution or pharmacy founders from concurrently engaging in wholesaling."

Following this explanation, Rep. Shin Dong-uk, who had raised the initial question, concluded his query by saying, "Yes, I understand," which led to the bill's passage by the Committee.

Rep. Kim Yoon proposes the Bejin Pharm Prevention Bill...Rep. Seo Young-kyo questions the opening of a wholesale website

Rep. Kim and Rep. Seo of the Democratic Party also played crucial roles in the bill's passage.

First, Rep. Kim proposed the amendment to the Pharmaceutical Affairs Act, representing the concern that Doctor Now's direct involvement in drug distribution and sales through the establishment and operation of Bejin Pharm could sharply increase the potential for new types of illegal activities (rebates) and significantly raise the probability of violating the Medical Service Act and Pharmaceutical Affairs Act by guiding patients to specific medical institutions and pharmacies. The legislative intent was to establish a fair pharmaceutical sales order.

Immediately following the bill's proposal, Doctor Now publicly criticized the ban on platform-owned wholesalers as unfair legislation, expressing "regret that the bill was proposed despite policy authorities judging it difficult to be viewed as unfair trade."

Prior to proposing the bill, Rep. Kim had summoned Doctor Now CEO Jeong Jin-woong to the Parliamentary Inspection last year to directly question him about the side effects of establishing and operating a wholesaler.

Later, when the bill faced challenges during the National Assembly Health and Welfare Committee's plenary session, Rep. Kim, Rep. Park Hee-seung, and others strongly advocated for the legislative validity, arguing to their colleagues that the "Doctor Now Bejin Pharma Prevention Act is not a ban on non-face-to-face healthcare, but a regulation on illegal platform rebates."

Rep. Seo emphasized the need for the legislation at the Legislation and Judiciary Committee hearing by publicly disclosing a text message that illustrated the potential problems if platforms were allowed to operate wholesale businesses alongside.

Based on a text message Doctor Now sent to local pharmacies, Rep. Seo requested that the bill be passed. The Doctor Now text message announced the opening of a pharmaceutical wholesale website as a new function within its Doctornow-Web.

The Doctor Now text included details that inventory would be linked based on the pharmacy's purchase history of specialized drugs distributed by Doctor Now, and upon linking, a 'Guaranteed Dispensing' badge would be displayed on the user application.

Rep. Seo stated, "There are good startups and others that are not. This bill allows startups and the neighborhood pharmacies across the country to achieve a favorable coexistence."

Thus, with Rep. Kim proposing the platform-wide prevention bill, Minister Jeong strongly asserting the legislative necessity, and Rep. Seo providing the final compelling evidence, the bill successfully passed the Health and Welfare Committee and the Legislation and Judiciary Committee, moving closer to final processing in the National Assembly plenary session.

Regarding the legislation, Rep. Kim said, "Medical treatment for convenience should not be corrupted into dangerous distribution. The law is designed to prevent illegal rebates, as non-face-to-face platforms can influence the use and prescribing of pharmaceuticals through connections with pharmacies. If we allow non-face-to-face care without preventing this, there is a high risk of another new form of pharmaceutical rebates becoming a major issue, and we must stop it."