Pointers have emerged that large hospitals are creating indirect suppliers of pharmaceuticals and medical devices to maximize profits, thereby worsening the national health insurance budget. In response, the government has launched a fact-finding investigation and stated it will formulate countermeasures.
Lawmaker Nam In-soon of the Democratic Party of Korea stated during the Health and Welfare Committee audit at the National Assembly in Yeouido, Seoul, on the 7th, "Tertiary general hospitals are establishing indirect suppliers for pharmaceuticals and medical devices, supplying their own products to hospitals to monopolize profits, which negatively impacts the national health insurance budget." She further pointed out, "Although we passed an amendment to the Medical Device Act limiting the shareholding of related parties in established indirect suppliers to less than 50%, there are still structural limitations in preventing this."
Nam (Rep.) said, "In the case of Kyung Hee University Hospital, they jointly created an indirect supplier called Baekje Investment with pharmaceutical wholesaler Baekje Pharmaceutical, and the proportion of pharmaceuticals supplied to Kyung Hee University Hospital accounts for 87%," adding, "The indirect supplier bills the national health insurance at a ceiling price for these costs to take profits, and distributes 3.6 billion won in dividends to Kyung Hee University Hospital."
She continued, "Not only Kyung Hee University but also Hanyang University is the same, and there are cases where they provide not just dividends but also donations. The government needs to properly grasp this issue. This ultimately negatively impacts the national health insurance budget," urging the government to prepare countermeasures.
In response, Minister of Health and Welfare Jeong Eun-kyung said, "I agree with the need to reduce the damage caused by indirect suppliers or CSOs (Contract Sales Organizations) increasing the national health insurance budget or out-of-pocket expenses." She added, "A fact-finding investigation on indirect suppliers is currently underway, and we will formulate a response plan considering the cases you mentioned and report back." She further noted, "The investigation period runs until December, so we will review further and prepare a plan by early next year."
in THEBIO
