Pharmaceutical Advertising 2019 Comparisons

Last Updated February 20, 2019

Contributed By Kim & Chang

Law and Practice

Authors



Kim & Chang brings together in its health practice the firm's unparalleled regulatory, intellectual property, corporate, competition law and litigation expertise to meet the complex needs of clients in the pharmaceutical, animal health, medical device and diagnostics sectors. Formed when Kim & Chang was first established in 1973, the practice has since advised the great majority of multinational firms in these sectors that do business in Korea, from established industry leaders to newer biotech companies and start-ups. Considerable knowledge of how regulatory agencies work and how the relevant laws and law enforcement trends have evolved allow the practice to advise clients proactively on a wide range of issues, from the legality of specific promotional practices, product approval and pricing to product recalls, anti-counterfeiting strategies, advertising claims and regulatory compliance. The highly experienced team – comprised not only of attorneys but industry specialists and numerous former officials of the Ministry of Health & Welfare (MOHW), the Ministry of Food & Drug Safety (formerly the Korea Food and Drug Administration, MFDS), and other government agencies – has an in-depth, practical understanding of the commercial and regulatory aspects of these businesses that is unmatched in Korea.

The Pharmaceutical Affairs Law (PAL) and the Regulation on Safety of Pharmaceutical Products (the 'Regulation'), which is an enforcement regulation of the PAL, regulate the advertising of medicines in Korea. The Act on Fair Labeling and Advertising (AFLA) is the more generally applicable legislation.

The Korean Research-based Pharmaceutical Industry Association (KRPIA) Voluntary Code on Labeling and Advertising for Drugs (the 'KRPIA Advertising Code') is a self-regulatory code applicable to advertising of medicines.

On 28 February 2017, the Ministry of Food and Drug Safety (MFDS) introduced the Guidelines on Advertising Drugs and Providing Information on Prescription Drugs (the 'Guidelines'), which provide examples and explanations regarding the standards for advertisement that are set forth in the PAL and the Regulation. The Guidelines do not have the force of law but provide insight into the criteria the MFDS will generally apply when reviewing advertisements of and provision of information on medicines.

The self-regulatory code applies to pharmaceutical companies that are members of the KRPIA. The self-regulatory code specifies what labelling and advertising practices are considered inappropriate under the AFLA. This code was adopted by the KRPIA to regulate the conduct of their members and were reviewed by the Korean Fair Trade Commission (KFTC). ¬¬The self-regulatory codes is not legally binding but is based on specific authorisation under the AFLA for industry associations to establish voluntary codes for complying with the applicable regulations. Violation of the self-regulatory code is generally presumed to be a violation of the AFLA.

Under the AFLA and subordinate legislation, advertising is defined as widely disseminating or presenting information about a business or its products, transacting conditions or other information relating to the transaction to consumers through certain enumerated media.

The Regulation contains a list of advertising media and means that is similar to that under the AFLA: newspapers, broadcasting, magazines, leaflets, pamphlets, samples, tickets, internet and other means of communication through personal computers, posters, signboards, neon signs, ad balloons, electronic billboards, videos, audio recordings, books, publications, movies, plays, face-to-face advertising, demonstrations, the packaging of one’s own or another company’s product and other similar media.

The applicable laws do not explicitly set forth a definition of “information provision” that can be distinguished from advertising, although the regulation does explicitly permit the provision of scientific information to healthcare professionals (HCPs) as an exception to the PAL’s general prohibition against direct-to-consumer (DTC) advertising of prescription medicines. The Guidelines detail the factors that the MFDS will consider when reviewing whether this exception applies and also contain examples of other types of information provision that may be permitted (eg, inclusion of approved product information on the pharmaceutical company’s corporate website) as well as the requirements that must be met when conducting such activities. The Guidelines provide that even in cases of such information provision, the advertising regulations under the PAL must be met to the extent applicable.

Whether a disease awareness campaign is construed as advertising depends on the context and content. The Regulation prohibits advertisements that allude to prescription medicines (which are subject to the prohibition on DTC advertising) through means such as reference to the relevant disease. The MFDS has in the past applied this rule strictly in connection with disease awareness campaigns. For example, the MFDS has taken the position that a disease awareness campaign where the name of the sponsoring pharmaceutical company is indicated runs afoul of the prohibition against indirect DTC advertising of prescription medicines.

Distribution of press releases does not necessarily constitute pharmaceutical advertising, although it may do so in certain circumstances, such as if the press release is distributed in a form that resembles a news article and as such encourages verbatim reproduction of the press release’s content. The Guidelines provide that whether a press release or news article constitutes an advertisement or violates the PAL will be “judged on a case-by-case basis, taking into account specific details such as who is conducting the advertising, whether the advertisement was commissioned, how the press release became news, the link between the pharmaceutical company and the news company, and the content of the news article.”

The PAL prohibits advertising of prescription medicines via mass media such as newspapers or magazines. An exception applies to advertisements in the trade press, ie, professional and academic media that are targeted at medical experts. Special care is required when sending a press release to a newspaper in general circulation, as such conduct may potentially be deemed a DTC advertisement.

Comparative advertising concerning a patient’s condition before and after use of medicines is prohibited. Moreover, advertising that compares one’s own product to a competitor’s product is prohibited to the extent that the advertisement is “defamatory or libelous.” The Guidelines provide that even advertisements or labelling that is based on actual facts may be defamatory or libellous if it emphasises the flaws of other products and suggests that they are inferior. Comparisons with other products may be permitted to a limited extent when the purpose is to “provide useful and accurate information”, but even in such cases the other medicine must be indicated by its active pharmaceutical ingredient only and the advertisement cannot directly or indirectly refer to the brand name of the other medicine.

As a general rule, only on-label advertising of authorised medicines is permitted. However, advertising of unauthorised medicines or indications may be permitted if the pharmaceutical company cites supporting literature, such as that contained in an official formulary or compendium of pharmaceuticals recognised by the Minister of Food and Drug Safety or “results of medically or pharmaceutically recognised clinical trials.” In such cases, the meaning of the reference material must be accurately conveyed and the name of the researcher, title of the article and the date of publication must be indicated. The MFDS has interpreted “results of medically or pharmaceutically recognized clinical trials” narrowly; for instance, the Guidelines only enumerate “supporting documents submitted and reviewed at application for product approval” as an example of substantiating data that falls within this category. Providing off-label information based on academic articles that were not submitted during approval may also be permitted in certain circumstances, as discussed under 3.3 Provision of Information to Healthcare Professionals,below.

Information on unauthorised medicines or unauthorised indications may be provided during an academic conference as long as the academic conference is hosted by an academic congress and not by the pharmaceutical company and the purpose of the conference is purely academic and not marketing. Even in such cases, the name of the unauthorised medicine should not be disclosed and the medicine should be referred to by its ingredients, to avoid the issue of an advertisement of unauthorised medicines. If, on the other hand, the academic conference is organised by a pharmaceutical company, the authorities will likely view the provision of information on unauthorised medicines or indications during the conference as a promotional activity and advertising not permitted under the PAL, even if the specific product name is not mentioned. The same applies to satellite symposiums organised and held by pharmaceutical companies incidental to academic conferences held by professional academic organisations.

Notwithstanding the above, in international academic conferences where many foreign HCPs are present, it is possible to exhibit and advertise unauthorised medicines in booths and share the results of clinical trials with HCPs, within the scope and purpose of the academic conference.

Information on unauthorised medicines or unauthorised indications may be provided to HCPs in certain limited circumstances, including where the information is solicited by HCPs. The information must be objective, with no commercial purpose. Even when providing professional information solicited by HCPs, such as the most recent clinical data, the information should be in its unprocessed, original form.

It is permissible to provide information to healthcare institutions that would be helpful in estimating budgets, such as the anticipated timing of the authorisation and expected supply price of a medicine or indication, as long as such information is not provided in a form such as to be construed as an advertisement. Such information is permitted only to the extent that the information is solicited by the healthcare institution. Information on drug efficacy, benefits and similar matters should not be included, to avoid the impression of a promotional purpose.

In principle, advertising prescription medicines to the general public is prohibited. As an exception, advertising prescription medicines is permitted where the medicine is for the prevention of an infectious disease that is designated under the Act on Prevention and Management of Infectious Diseases, or the advertisement is placed in professional and academic media that is targeted at medical experts.

Generally, DTC advertising of over-the-counter medicines is permitted. Any advertisement in certain media including print, television or radio broadcasts and the internet must be reviewed and approved by the Korea Pharmaceutical and Bio-Pharma Manufacturers Association (KPBMA). Even in the case of non-prescription medicines, advertising medicines for paediatric use in magazines or broadcasting programmes for children is prohibited.

The PAL and the Regulations specify the information that should or should not be included in advertising directed to the general public. Generally, advertising of prescription medicines is prohibited but advertising of over-the-counter medicines is permitted, subject to the KPBMA’s review. When advertising, pharmaceutical companies must comply with the requirements set forth below:

  • information designated by the Minister of Food and Drug Safety, such as the medicine’s effects and efficacy, must be indicated; and
  • certain information, including the following, should not be included in the advertisement:
    1. information suggesting that a doctor, dentist, practitioner of oriental medicine, pharmacist or other similar HCP has endorsed the medicine in question (the fact that a medicine has been designated for certain public health purposes by the national or a municipal government or a public organisation may be disclosed, however);
    2. information that could lead the viewer to mistake a foreign product as a domestic product, or vice versa;
    3. off-label information (please see discussion under 3.1 Restrictions on Provision of Information on Unauthorised Medicines or Indications, above);
    4. information that is untrue or only partially true;
    5. comparisons of patients’ conditions before and after use, and other information presenting or alluding to the drug’s effectiveness;
    6. information that is or may be defamatory of other products, even if based on true facts;
    7. patient testimonials and statements such as that the company is being inundated with orders for the product;
    8. use of superlative expressions, such as 'best' or 'top class';
    9. for medicines with adverse effects, denying such adverse effects or improperly emphasising the safety of the product;
    10. presenting the relevant symptoms or surgical procedures in a threatening manner; or
    11. advertising the effects and efficacy of ingredients that are not the main ingredient.

With regard to the price of medicines, the Ministry of Health and Welfare (MOHW) has taken the position (supported by the PAL) that the price of a medicine should be indicated by the entity (usually a pharmacy) that sells the medicine to the end user. Others (including importers, manufacturers and wholesalers) may not engage in conduct (including distribution of a pricing matrix) that could affect the seller’s setting of the sale price.

Under the KRPIA Advertising Code, general enquiries regarding the use of products must be handled by appropriately qualified personnel. When a patient asks for information or advice on diagnosis or treatment of a disease, the pharmaceutical company must recommend that the patient consult with his/her physician. If a patient or a family member of the patient makes specific enquiries about the medicine to be prescribed, the pharmaceutical company must answer using an information leaflet or patient aids. For all other information, the pharmaceutical company should recommend that the patient or the family member consult their doctor.

The KRPIA Advertising Code states that a pharmaceutical company must make efforts to provide information to and educate patients so that patients have access to general medical information or information on treatments that may be prescribed by their doctors. Such information must be educational and encourage patients to seek further information from the appropriate HCP. However, the educational material should not contain material that could be regarded as promotional or advertising – or refer to a specific medicine. The educational material may include descriptions on the scope of treatment, medical information and a discussion of relevant clinical parameters in general.

Patient education material may be prohibited as DTC advertising, if the educational materials are placed in public areas, such as hospital waiting rooms, or are widely disseminated to the general public. In addition, as discussed in 2.2 Difference Between Information and Advertising, a public disease awareness campaign that indicates the name of the sponsoring pharmaceutical company or the name of the specific medicine could potentially constitute the advertising of prescription medicines that violates the PAL.

As discussed under 4.2 Information Contained in Advertising to the General Public, advertisements indicating that a doctor, dentist, practitioner of oriental medicine, pharmacist or other HCP has endorsed a specific medicine are not permitted. Utilising news articles to suggest that HCPs have guaranteed the effects and efficacy of the medicine is also prohibited

The requirements discussed in 4.2 Information Contained in Advertising to the General Public, apply to advertising directed at HCPs as well as to DTC advertisements.

As discussed in 3.1 Restrictions on Provision of Information on Unauthorised Medicines or Indications, off-label advertisements are generally prohibited, and although there is an exception for certain data in certain literature including the “results of medically or pharmaceutically recognised clinical trials”, the MFDS has construed this exception narrowly. Providing off-label information may be permitted in limited circumstances as discussed in 3.3 Provision of Information to Healthcare Professionals,above, but in such cases the information should be presented in its unprocessed, original form.

As discussed in 3.3 Provision of Information to Healthcare Professionals, a company could provide reprints of journal articles to HCPs, especially in cases where the HCP initiates the request. However, reprints should be provided in compliance with intellectual property laws and also with laws and self-regulatory industry code governing value transfers to HCPs.

As discussed, in 4.1 Main Restrictions on Advertising to the General Public, in order to advertise over-the-counter medicines through certain mass media, the pharmaceutical company must obtain prior review and approval from the KPBMA, to which the MFDS has delegated authority. The KPBMA reviews whether the advertisements comply with the requirements set forth in the Regulations, some of which are discussed under 4.2 Information Contained in Advertising to the General Public, above.

The PAL does not impose a legal requirement to adopt SOPs or employ specific personnel. However, it is general practice for companies to appoint an employee to review pharmaceutical advertisements for compliance with the rules on pharmaceutical advertising before the advertising is submitted to the KPBMA for its review.

The requirements discussed above apply to the advertising of medicinal products on the internet; there is no separate set of rules regulating online advertisements. Advertising prescription medicines on the internet is prohibited, except where the medicines are used to prevent an infectious disease that is designated under the Act on Prevention and Management of Infectious Diseases, specialised information is being provided to medical or pharmaceutical experts, or the advertising is conducted through professional and/or academic media.

See 7.1 Regulation of Advertising of Medicinal Products on the Internet.

Under the Guidelines, companies may provide certain limited information, including on-label information on their prescription medicines, on their corporate website (notice of such website must be provided to the KPBMA). In doing so, the company should take precautions such as avoiding including specific product information through a pop-up window on the website’s landing page. The MFDS also recommends that companies take technical measures, such as preventing downloads, to prevent the information from being disseminated over the internet in an improper or misleading manner.

For patient support websites that provide information on a specific disease and/or a product, the Guidelines state that operating a separate website that focuses on a specific prescription product and is accessible to the general public may generally be deemed a violation of the prohibition on DTC advertisement. The Guidelines go on to state that a patient support website that is operated as part of a risk management plan approved by the MFDS may be deemed as falling outside the scope of DTC advertisement, provided that appropriate measures are implemented such as log-in procedures that allow only patients who have been prescribed the product to access the website.

In Korea, the main anti-corruption statutes are the Korean Criminal Code and the Act on Prohibition of Improper Requests and Provision/Receipt of Money and Valuables (“Anti-Graft Act”).

The Korean Criminal Code penalises official and commercial bribery. Official bribery is customarily defined as conferring a benefit on a government official in connection with the discharge of the official’s duties, and requires proof that the benefit provided was of a quid pro quo nature. Commercial bribery is bribery of a person entrusted with conducting commercial duties for an employer or a corporation. For commercial bribery, the government must additionally prove that the person giving the bribe made an 'improper request'. Korean courts have interpreted 'improper request' to include material breaches of company policy as well as unlawful conduct.

The Anti-Graft Act applies to the provision and receipt of things of value to/by “public officials, etc” a group that is defined broadly under the act. In the healthcare sector, the statute applies to:

  • doctors and other personnel affiliated with public health clinics and military doctors;
  • individuals affiliated with public institutions such as national university hospitals;
  • officers/employees of private educational foundations; and
  • faculty or staff of public and private schools (including HCPs who hold a professorship at a medical college).

Unlike bribery under the Korean Criminal Code, no quid pro quo or connection with the recipient’s official duties is needed for there to be a violation.

Both the Korean Criminal Code and the Anti-Graft Act generally apply to benefits provided to individuals rather than to organisations. However, according to the Anti-Corruption and Civil Rights Commission (ACRC), which is the agency responsible for enforcing the Anti-Graft Act, if healthcare companies or healthcare organisations serve as conduits for providing improper benefits to public officials, the provider of the benefit may be subject to criminal liability under the Anti-Graft Act. Healthcare companies and organisations may also be liable under the Anti-Graft Act for the conduct of their employees, unless they can prove that they exercised due care and supervision to prevent such misconduct.

The PAL, the Monopoly Regulation and Fair Trade Law (FTL), and the KRPIA’s and KPBMA’s respective Fair Competition Codes ('Fair Competition Codes'), generally prohibit companies from inducing HCPs and healthcare organisations to prescribe their product by providing benefits.

The PAL prohibits pharmaceutical companies from providing economic benefits to HCPs for the purpose of promoting sales or prescription of pharmaceutical products. This is commonly referred to as the 'dual punishment' system because both the provider and recipient of economic benefits may be sanctioned. The Enforcement Regulation of the PAL stipulates the following exceptions ('safe harbours') to this general prohibition:

  • providing samples;
  • supporting HCPs’ participation in academic conferences;
  • supporting clinical trials;
  • providing meals, beverages, souvenirs, transportation and accommodation to participants of a product presentation;
  • providing discounts on the basis of payment terms; and
  • compensation for participation in post-marketing surveillance studies.

The Enforcement Regulation sets forth detailed requirements for the aforementioned exceptions.

The FTL provides that companies must not engage in unfair trade practices such as 'unfair customer solicitation'. Unfair customer solicitation includes the giving or offering of unfair or excessive benefits to draw customers from competitors. The FTL stipulates that industry associations may establish a self-regulatory code to prevent unfair customer solicitation and request the KFTC to review such a self-regulatory code for compliance with the FTL. The KRPIA and KPBMA’s respective Fair Competition Codes were reviewed by the KFTC pursuant to this provision; conduct that complies with the Fair Competition Codes is generally regarded by the KFTC as permitted by the FTL. The following activities are permitted under the Fair Competition Codes:

  • providing samples;
  • making donations for medical, pharmaceutical, educational or charitable purposes;
  • supporting the hosting or operation of academic conferences;
  • sponsoring HCPs’ participation in academic conferences;
  • providing travel expenses, accommodation, food, beverages and souvenirs to participants of product presentations targeting multiple healthcare institutions;
  • providing pharmaceuticals for clinical trials;
  • providing consideration for market surveys;
  • providing consideration for participation in post-marketing surveillance studies;
  • providing compensation for participation in clinical studies; and
  • providing souvenirs or promotional materials with minimal value at exhibitions.

The activities permitted under the Fair Competition Codes are also generally deemed permitted under the PAL as well, even when they do not fall under the safe harbours.

The PAL, FTL, and the Fair Competition Codes prohibit provision of benefits or inducements to organisations. Originally the PAL only prohibited the provision of economic benefits to individuals, such as pharmacists, practitioners of oriental medicine, founders of healthcare institutions and employees of healthcare institutions, but it was amended in December 2016 to expressly prohibit the giving of economic benefits to pharmacies and healthcare institutions.

Under the PAL and the Fair Competition Codes, gifts may be offered to HCPs who participate in a pharmaceutical company’s product presentation. For product presentations targeting multiple healthcare institutions, 'souvenirs' of up to KRW50,000 in value may be provided, while 'promotional materials' (brand reminders) of up to KRW10,000 in value may be provided for product presentations for a single healthcare institution. Effective since 1 January 2019, the KRPIA’s Fair Competition Code prohibits the giving of promotional aids in relation to the promotion of prescription medicines, with the exception of pens and notepads provided at company organised or third party events, not to exceed a value of KRW10,000 combined per HCP, per the amended International Federation of Pharmaceutical Manufacturers & Associations Code of Practice. The KPBMA has also announced that effective as of 1 January 2019, promotional items related to sports, hobbies, leisure or recreational activities cannot be provided to HCPs.

Under the PAL and the Fair Competition Codes, samples may be provided to medical institutions or HCPs for the purpose of enabling the recipient to identify features of the product such as its formulation, colour, taste or smell. Such products must be in the minimum packing unit, and only the minimum amount necessary for confirming the product’s characteristics may be provided. All samples must be marked 'sample' in either Korean or English.

The PAL allows pharmaceutical companies to sponsor HCPs’ participation in academic conferences. Such sponsorship must meet the following requirements:

  • support must be only for the actual costs (eg, transportation, meal, accommodation and registration fees);
  • only presenters, chairpersons and panelists at the academic conference may be sponsored; and
  • the academic conference must be hosted by an association that meets the criteria prescribed in the Enforcement Regulation.

The Fair Competition Codes permit both supporting the hosting or operation of an academic conference and sponsoring HCPs’ participation in academic conferences. First, pharmaceutical companies may support domestically held academic conferences hosted by organisations specified in the Fair Competition Codes through means such as making donations, providing food, beverages or souvenirs, leasing booths and placing advertisements. KRPIA and KPBMA member companies must notify the KRPIA in advance of the name of the academic conference, its scope and details of its support, and report details to the KRPIA after the event. Member companies are prohibited from determining matters such as the agenda or participants of an academic conference they are supporting.

Second, pharmaceutical companies may sponsor HCPs participating in domestic or overseas academic conferences hosted by organisations specified in the KRPIA Fair Competition Code. Funding may only be provided for transportation costs, registration fees, meals and accommodation. The funding must be provided indirectly through the KRPIA or KPBMA as applicable and not directly to the participant.

Sponsorship of non-scientific events is not specifically permitted under the PAL or the Fair Competition Codes. While sponsoring such events would not be a violation of the PAL or the FTL per se, if economic benefits are provided to HCPs (free participation would likely be deemed an economic benefit in this context) or any promotional activities are undertaken during such events, the event would likely be construed as in violation of applicable law.

The PAL is silent on the issue of donations. The Fair Competition Codes permit member companies to donate to certain institutions (but not to individual HCPs) for medical, pharmaceutical, educational or charitable purposes. Donations of an excessively large amount and donations whose purpose is to induce the selection or prescription of the donating company’s medicines are prohibited.

Under the Fair Competition Codes, cash donations can be made in two circumstances:

  • where a member company entrusts the funds with the KRPIA or KPBMA (as applicable) together with a description of how the funds should be used (but not the specific recipient), and requests the KRPIA/KPBMA to select the recipient; or
  • where an institution requests the KRPIA to solicit donations on its behalf.

In the second case, the KRPIA will review the propriety of the requesting institution’s proposal and solicit donations from member companies. In both cases, the donation must be made directly by the member company to the recipient and the details must be afterwards reported to the KRPIA/KPBMA.

The Fair Competition Codes also permit member companies to make charitable donations of products directly to medical institutions, after filing an ex antereport with the KRPIA.

All types of economic benefits (including discounts and rebates) given by pharmaceutical companies are generally prohibited, unless specifically enumerated under the safe harbours of the PAL or the Fair Competition Codes.

With regard to discounts, the PAL exceptionally permits discounts based on the payment term (ie, on condition of payment being made within a certain period) or on the basis of points accumulated from the use of credit cards or debit cards, subject to criteria set forth in the Enforcement Regulation of the PAL. All other types of discounts (including volume discounts) are strictly scrutinised by the relevant authorities.

The PAL and the Fair Competition Codes permit the provision of service fees relating to certain types of activities, such as clinical trials and post-marketing surveillance studies. The PAL does not but the Fair Competition Codes specifically permit lecture and consultation fees subject to certain restrictions and specific value caps.

For HCPs who are deemed 'public officials', the Anti-Graft Act imposes separate fee caps for lecture fees, but not consultation fees.

None of the activities described in this section require prior approval from employers or regulatory authorities. However, under the Fair Competition Codes, donations and support for the hosting of/participation at an academic conference must be approved by the KRPIA/KPBMA (see 9.3 Sponsorship of Scientific Meetings and 9.5 Grants or Donations to Healthcare Professionals or Healthcare Institutions, above).

Starting with economic benefits provided 1 January 2018, 'suppliers of pharmaceuticals' (defined to include marketing authorisation holders and pharmaceutical importers/wholesalers) are required under the PAL to prepare expenditure reports to the MOHW detailing the economic benefits provided to HCPs during the previous fiscal year.

The transparency requirements apply to all foreign companies as long as they fall under the definition of 'suppliers of pharmaceuticals' even if they do not yet have products on the market.

The MFDS is responsible for enforcing the PAL’s provisions on advertising. The KFTC is responsible for enforcing the AFLA. The KRPIA Advertising Code is enforced by the KFTC and the KRPIA.

The MOHW is responsible for enforcing the PAL’s inducement provisions. The KFTC, KRPIA and KPBMA are responsible for enforcing the FTL and the relevant Fair Competition Codes.

Companies may file an appeal to the administrative court to dispute administrative sanctions imposed by the MFDS, MOHW or the KFTC.

The police and the prosecutor’s office have the authority to investigate and indict companies for violating the rules on advertising and inducement and can recommend criminal sanctions. The courts have the authority to determine the criminal sanctions to be imposed on the company.

For violations of the PAL, companies can file a civil complaint against their competitors to the MFDS and request that it impose administrative sanctions. For violations of the FTL or AFLA, the relevant authority is the KFTC.

Companies can also file a complaint to the police or the prosecutor’s office against their competitors for infringements of the PAL or the AFLA.

Companies can also file a complaint with the KRPIA regarding competitors’ violations of the KRPIA Advertising Code. The relevant procedures are discussed under 11.4 Relationship Between Regulatory Authorities and Courts.

For violations of advertising rules under the PAL, companies may be subject to criminal sanctions of imprisonment of up to one year or a fine of up to KRW10 million. Companies may also be subject to administrative sanctions (sales suspension order of up to three months for an initial violation; six months for a second violation; cancellation of marketing authorisation for a third violation). For a violation of the AFLA, companies may be subject to criminal sanctions of up to two years’ imprisonment or a criminal fine of up to KRW150 million.

For violating rules on the provision of economic benefits to HCPs under the PAL, criminal sanctions of imprisonment of up to three years or a fine of up to KRW30 million can be imposed. Additionally, the MFDS may impose a sales suspension order (up to three months for an initial violation; six months for a second violation) and cancel the relevant marketing authorisation for a third violation. For providing improper benefits to HCPs, companies may also be subject to a corrective order and an administrative fine of up to 2% of the relevant revenue by the KFTC.

Under the KRPIA Advertising Code, the Code of Conduct Committee reviews complaints filed with the KRPIA and determines whether there has been a breach of the KRPIA Advertising Code. If the relevant company is found in breach, the president of the KRPIA may inform them of the results in writing. The company is then required to report the corrective actions it has taken or plans to take within 15 days of receiving the written report of the results. If the company does not take the corrective actions recommended by the KRPIA, the president may ask the responsible authorities to take appropriate actions under the AFLA and/or PAL.

As discussed in 11.3 Penalties for Violating Advertising Rules and Rules on Inducements to Prescribe, above, the KFTC and the MFDS may impose administrative sanctions on the company for refusal to take the recommended corrective action. If the company disputes such administrative sanctions, it may appeal the matter to an administrative court.

Historically, the relevant authorities have actively enforced the advertising regulations (such as the prohibition on DTC advertisement of prescription medicines and the various other restrictions set forth in the PAL and Regulation), and this trend is likely to continue.

Recently there have been several high-profile violations of the AFLA in other sectors. For example, administrative fines were imposed by the KFTC for false claims regarding the safety of certain humidifier sanitisers that are alleged to have caused a large number of deaths and on the fuel efficiency and emissions of certain diesel vehicles. These cases have resulted in a surge in public interest regarding false or exaggerated advertising that touches on safety issues, which may cause the authorities to scrutinise claims in pharmaceutical advertising more strictly.

Kim & Chang

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Korea

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Law and Practice

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Kim & Chang brings together in its health practice the firm's unparalleled regulatory, intellectual property, corporate, competition law and litigation expertise to meet the complex needs of clients in the pharmaceutical, animal health, medical device and diagnostics sectors. Formed when Kim & Chang was first established in 1973, the practice has since advised the great majority of multinational firms in these sectors that do business in Korea, from established industry leaders to newer biotech companies and start-ups. Considerable knowledge of how regulatory agencies work and how the relevant laws and law enforcement trends have evolved allow the practice to advise clients proactively on a wide range of issues, from the legality of specific promotional practices, product approval and pricing to product recalls, anti-counterfeiting strategies, advertising claims and regulatory compliance. The highly experienced team – comprised not only of attorneys but industry specialists and numerous former officials of the Ministry of Health & Welfare (MOHW), the Ministry of Food & Drug Safety (formerly the Korea Food and Drug Administration, MFDS), and other government agencies – has an in-depth, practical understanding of the commercial and regulatory aspects of these businesses that is unmatched in Korea.

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