Attention is on whether the "partial amendment to the Pharmaceutical Affairs Act," which would restrict telemedicine platforms from concurrently operating pharmaceutical wholesale businesses, will be brought to a floor vote at the National Assembly this month.
The ruling and opposition parties plan to hold a plenary session on the 15th. Some in the industry predicted that the partial amendment to the Pharmaceutical Affairs Act could be pushed back again this time. The backlash from the industry has been strong, and due to differences among lawmakers, it was not even placed on the agenda at the plenary session last month.
Last year, parts of the industry and political circles amplified opposition, calling the bill the so-called "Doctor Now prevention law," saying it targeted a specific company's business model, and even "a second Tada ban law." Some also assessed that as the "second Tada ban law" frame took hold, Doctor Now gained the upper hand in the battle for public opinion.
As controversy stalled the bill, the Ministry of Health and Welfare issued a rebuttal. It said the measure is a minimum safeguard to prevent unfair transactions that could occur in the pharmaceutical distribution process involving telemedicine platforms, and is not a regulation targeting specific corporations or the platform industry itself. We examined the facts behind the key issues.
◇ Is the Pharmaceutical Affairs Act amendment "a second Tada ban law"?
At the center of the controversy, Doctor Now is a telemedicine intermediary platform that emerged with the pilot telemedicine program during the COVID-19 pandemic. At the time, the government ran telemedicine on a temporary and pilot basis, and platforms brokering it were not clearly defined as legal actors under the Pharmaceutical Affairs Act.
In this context, Doctor Now established a pharmaceutical wholesaler as a subsidiary. The company launched a subsidiary, "Bijin Yakpum," in 2024 to start a pharmaceutical wholesale business. Last year, it absorbed the subsidiary and has since been operating Doctor Now (an online wholesale mall).
Since Doctor Now is effectively the only case simultaneously running a platform and a wholesale business, the Pharmaceutical Affairs Act amendment picked up the nickname "Doctor Now prevention law." The welfare ministry says this framing distorts the bill's intent and maintains it is different from the "Tada incident."
A Ministry of Health and Welfare official said, "This is not a law to stop platform businesses. It only says do not also run a wholesaler," stressing, "Structurally, it is different from the 'Tada' case, which banned the business itself."
The Tada ban law restricted the platform-based transportation service itself, blocking market entry. In contrast, the core of the Pharmaceutical Affairs Act amendment is to restrict the structure in which a platform owns and operates a pharmaceutical wholesaler. It is not a law that bans telemedicine brokering or platform operation.
◇ The wobbling principle of banning concurrent businesses: Why is regulation needed?
Health authorities and patient groups worry that a platform could grant exposure benefits to pharmacies that purchase drugs through its own wholesaler or effectively steer supply toward specific drugs.
In fact, after setting up its wholesaler, Doctor Now's platform drew controversy by encouraging partner pharmacies to buy drug packages worth a certain amount and displaying phrases like "NOW certain to dispense" in the app.
Under the current Pharmaceutical Affairs Act, the main legal actors are medical institutions (physicians), pharmacies (pharmacists), and pharmaceutical wholesalers. The roles of diagnosis and prescription, dispensing and sales, and distribution are clearly separated by law. This is a legal device to prevent excessive prescribing and unfair transactions by limiting the involvement of interests at each stage.
In particular, banning concurrent businesses is the principle. In cases of special relationships—such as within second-degree kinship or with more than 50% equity—mutual transactions are blocked from the outset. It also bans acts such as a drug wholesaler supplying only to certain pharmacies, refusing to supply to certain pharmacies without justifiable reason, and providing rebates. Drug rebates are also a main cause of higher drug prices.
However, since the Pharmaceutical Affairs Act was created on the premise of in-person care, health authorities say the legal framework must be updated in line with the institutionalization of telemedicine.
Telemedicine platforms have connected medical institutions and pharmacies as part of pilot programs, but they had no clear legal status under the Pharmaceutical Affairs Act. With a recent amendment to the Medical Service Act institutionalizing telemedicine, platforms are set to be incorporated as formal actors, but the Pharmaceutical Affairs Act is still designed on the premise of in-person care, leaving a systemic gap.
A Ministry of Health and Welfare official said, "The principle of banning concurrent businesses is the minimum device needed to prevent excessive prescribing and misuse, and to ensure a fair and transparent distribution order," adding, "This should apply equally regardless of the form or size of corporations."
◇ "Pharmacy pinball is not the answer: structural limits"
The rationale Doctor Now put forward in creating its pharmaceutical wholesaler Bijin Yakpum as a subsidiary was to stop so-called "pharmacy pinball," where patients wander from pharmacy to pharmacy to find prescribed drugs.
According to Ministry of Health and Welfare data obtained by ChosunBiz, there are 28,654 drug items nationwide, and the items handled by Doctor Now's wholesaler totaled 90, just 0.3% of the whole.
From the time of Bijin Yakpum's operation, the Doctor Now platform had a high share of non-reimbursable drugs. By volume, 60.1% were non-reimbursable, and by value, 82.6% were non-reimbursable. Since running Doctor Now (the online wholesale mall) last year, non-reimbursable drugs have become even more concentrated—77.2% by volume and 95.5% by value.
On average, the 3,800 pharmaceutical wholesalers nationwide handle about 12% non-reimbursable drugs. Compared with that, Doctor Now's skew toward non-reimbursable drugs is seen as far heavier than other wholesalers. By supply amount, the non-reimbursable drugs (95.5%) handled by Doctor Now (the wholesale mall) are mostly diet drugs (72.7%) and hair loss drugs (22.6%), while reimbursable drugs (4.5%) were mainly acne treatments (3.2%) and artificial tears (0.3%).
Even looking only at the product list, figures in the pharmaceutical industry say there is a disconnect with solving the "pharmacy pinball" problem.
A representative at a major domestic drugmaker said, "Don't we usually call it pharmacy pinball when, during flu or infectious disease outbreaks, patients wander in search of drugs due to shortages of certain items?" adding, "That wholesaler's portfolio is skewed toward non-reimbursable drugs such as diet and hair loss medications, so I don't think it's accurate to say it contributes to addressing the pharmacy pinball problem."
A former physician who heads a corporation and requested anonymity said, "The claim that owning a wholesaler is necessary to solve pharmacy pinball is not realistic, and Doctor Now is not being run in line with that rationale."
Health authorities worry about market distortion stemming from biased distribution. If a platform also runs a wholesale business, the risk can grow that exposure and distribution will center on drugs handled by its own wholesaler rather than on patients' medical needs.
A Ministry of Health and Welfare official said, "Concurrent operation of a platform and a wholesaler can distort drug distribution," arguing, "Rather than reducing pharmacy pinball, it embeds a structural risk of undermining fairness and neutrality in drug selection." The official added, "Even if a specific wholesaler is owned, there are structural limits to providing inventory information across the drugs patients actually need, and it is not desirable."
Patient groups such as the Korea Alliance of Patients Organization, the Korea Blood Cancer Patient Organization, and the Korea T1D Society are urging the National Assembly to pass the bill for these reasons.
The groups said, "Drugs are not ordinary goods but public goods directly linked to people's lives," adding, "If telemedicine platforms also dominate drug distribution in the highly public and specialized health care sector, patient safety and choice could be harmed."
As an alternative to pharmacy pinball, the welfare ministry proposed a "public data-based approach." It explained that lawfully opening drug supply and usage data held by the Health Insurance Review & Assessment Service and allowing private platforms to use it would be a more fundamental solution.
◇ Constitutional Court precedent also says "ex post sanctions are difficult"
There is a difference in views between the welfare ministry and the Ministry of SMEs and Startups over this bill. While the welfare ministry says structural, preemptive regulation is needed, the MSS has argued that ex post sanctions are preferable when illegal acts occur. Some in the platform and venture sectors oppose the bill, warning it could stifle innovation.
The welfare ministry pointed to the "limits of ex post sanctions," saying, "Information asymmetry is significant in the medical and pharmaceutical fields, and exposure and distribution via platform algorithms are not easy to prove from the outside."
In fact, in Korea Fair Trade Commission cases involving Kakao Mobility and Naver's shopping and search services, sanctions were overturned because the competitive restraint effects of algorithmic discrimination could not be proven. An FTC official lamented, "How can public officials catch all the crafty algorithm designs and operations by IT corporations' experts?"
The Constitutional Court has recognized the need to preemptively block structures that can create conflicts of interest, saying that "ex post regulation alone is ineffective," in cases related to banning concurrent businesses between medical institutions and pharmacies, and between medical institutions and pharmaceutical wholesalers.
The welfare ministry believes the same logic of the Constitutional Court's rulings should apply to the issue of telemedicine platforms concurrently operating wholesalers. As telemedicine is being incorporated into the institutional framework, a corresponding legal management system is needed.
A Ministry of Health and Welfare official said, "The partial amendment to the Pharmaceutical Affairs Act is neither a Doctor Now prevention law nor a second Tada ban law," adding, "Without a legal framework to block platforms from concurrently operating pharmaceutical wholesalers, it is equally possible that a giant wholesaler runs a platform, or that large platform corporations like Coupang and Alibaba concurrently run telemedicine platforms and wholesalers."