Attention is on whether the "partial amendment to the Pharmaceutical Affairs Act," which would restrict telemedicine platforms from concurrently engaging in pharmaceutical wholesale, will be brought to a plenary session of the National Assembly this month.
The rival parties plan to hold a plenary session of the National Assembly on the 15th. Some in the industry predicted that the partial amendment to the Pharmaceutical Affairs Act could be delayed again. The bill did not even make it onto last month's plenary agenda due to strong backlash from the industry and differences among lawmakers.
Last year, some in the industry and politics amplified their opposition by calling the bill the so-called "Doctor Now prevention law," saying it targets a specific company's business model, and even "a second Tada ban law." Some say that as the "second Tada ban law" frame took hold, Doctor Now gained the upper hand in the battle for public opinion.
As the controversial bill hit a roadblock, the Ministry of Health and Welfare pushed back. It said the measure is the minimum safeguard to prevent unfair transactions that could occur in the pharmaceutical distribution process involving telemedicine platforms, and is not a regulation targeting a specific company or the platform industry itself. We reviewed the facts on 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 brokerage platform that emerged alongside the pilot telemedicine program during the COVID-19 pandemic. At the time, telemedicine was operated on a temporary and pilot basis, and the platforms brokering it were not clearly defined as legal actors under the Pharmaceutical Affairs Act.
In this context, Doctor Now set up a pharmaceutical wholesaler as a subsidiary. The company launched a subsidiary, Bijin Yakpum, in 2024 and began pharmaceutical wholesale. Last year it absorbed and merged that unit and is now operating Doctor Now (online wholesale mall).
Because Doctor Now is effectively the only case operating both a platform and wholesale at the same time, the Pharmaceutical Affairs Act amendment has been dubbed the "Doctor Now prevention law." The welfare ministry says this framing distorts the bill's intent and that it is different from the "Tada incident."
A ministry official said, "This is not a law to stop platform businesses. It only says don't do wholesale," adding, "Structurally, it is different from the 'Tada' case, which banned the business itself."
The Tada ban law restricted the platform-based transport 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 does not ban telemedicine brokering or platform operation.
◇ The wobbling principle of banning concurrent businesses: why the regulation is needed
Health authorities and patient groups worry that platforms could offer exposure benefits to pharmacies that buy drugs through their own wholesalers, or effectively steer the supply of certain medicines.
After setting up its wholesaler, Doctor Now's platform drew controversy for inducing partner pharmacies to purchase drug packages worth a certain amount and displaying phrases such as "NOW guaranteed dispensing" on the app screen.
Under the current Pharmaceutical Affairs Act, the main legally recognized 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 mechanism to prevent excessive prescribing and unfair transactions by limiting the involvement of interests at each stage.
In particular, a ban on concurrent businesses is the rule. In cases of special relationships, such as within second-degree kinship or with more than 50% equity ownership, mutual transactions are prohibited from the outset. Acts such as a drug wholesaler supplying only to certain pharmacies, refusing to supply to certain pharmacies without justifiable reason, and offering rebates are also banned. Drug rebates are a main cause of higher drug prices.
However, the Pharmaceutical Affairs Act containing such provisions was crafted on the premise of in-person care, so health authorities say the legal framework must be updated to fit the institutionalization of telemedicine.
Telemedicine platforms, which have connected medical institutions and pharmacies as pilot projects, have not had a clear legal status under the Pharmaceutical Affairs Act. With the recent amendment to the Medical Service Act institutionalizing telemedicine, platforms are also set to be incorporated as formal actors, but the Pharmaceutical Affairs Act is still designed on the premise of in-person care, leaving an institutional gap.
A ministry official said, "The principle of banning concurrent businesses is the minimum safeguard to prevent overprescribing and misuse of pharmaceuticals 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 justification Doctor Now put forward when it made its pharmaceutical wholesaler Bijin Yakpum a subsidiary was to stop patients from wandering in search of prescribed drugs, the so-called "pharmacy pinball."
According to data from the Ministry of Health and Welfare obtained by ChosunBiz, there are 28,654 pharmaceutical items in Korea, and the items handled by Doctor Now's wholesaler number 90, or 0.3% of the total.
From the time Bijin Yakpum was operating, the Doctor Now platform had a high share of non-reimbursed drugs. By supply volume, 60.1% were non-reimbursed, and by supply amount, 82.6% were non-reimbursed. Since operating Doctor Now (online wholesale mall) last year, non-reimbursed drugs have become even more concentrated, accounting for 77.2% by supply volume and 95.5% by supply amount.
Across 3,800 pharmaceutical wholesalers, the average share of non-reimbursed drugs handled is about 12%. By comparison, observers say Doctor Now's focus on non-reimbursed drugs is heavier than other wholesalers. By supply amount, the non-reimbursed drugs (95.5%) handled by Doctor Now (wholesale mall) are mostly diet drugs (72.7%) and hair-loss drugs (22.6%), while reimbursed drugs (4.5%) were mainly acne (3.2%) treatments and artificial tears (0.3%).
Even looking only at the lineup, industry officials say there is a gap with solving the "pharmacy pinball" problem.
An official at a major Korean pharmaceutical company said, "Don't we usually call it pharmacy pinball when patients wander in search of medicines due to shortages of certain drugs during flu or infectious disease outbreaks?" adding, "The wholesaler's portfolio is concentrated in non-reimbursed drugs such as diet and hair-loss medications, so I don't think it is right to say this contributes to resolving pharmacy pinball."
A corporation CEO who is a former physician and requested anonymity said, "The claim that you must own a wholesaler to solve pharmacy pinball is not realistic, nor is Doctor Now operating in line with that justification."
Health authorities worry about market distortion from distribution bias. If a platform also operates wholesale, the risk grows that exposure and distribution could be centered on the drugs handled by its own wholesaler rather than the patient's medical needs.
A ministry official said, "Concurrent operation of platform and 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 platform owns a particular wholesaler, there are structural limits to providing inventory information across the full range of drugs patients actually need, and it is not desirable."
Patient groups such as the Korea Alliance of Patients Organization, the Korea Blood Cancer Patients Association, and the Korea Type 1 Diabetes Patients Association are urging the National Assembly to pass the bill for these reasons.
The groups said, "Pharmaceuticals are not ordinary goods but public goods directly linked to people's lives," adding, "If telemedicine platforms come to control drug distribution in the highly public and specialized health care sector, patient safety and choice could be compromised."
As an alternative to pharmacy pinball, the 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 insufficient"
There is a difference of views between the ministry and the Ministry of SMEs and Startups over the bill. The ministry says preemptive structural regulation is necessary, while the MSS argues that ex post sanctions are preferable when illegal acts occur. Some in the platform and venture sectors oppose the bill, citing concerns about stifling innovation.
The ministry pointed to the "limits of ex post sanctions," saying, "In the medical and pharmaceutical sectors, information asymmetry is significant, and it is not easy from the outside to prove exposure and distribution processes driven by platform algorithms."
In fact, in Korea Fair Trade Commission cases related to Kakao Mobility and Naver shopping and search services, sanctions were overturned because the competition-restricting effects of algorithmic discrimination could not be proven. An FTC official lamented, "How can public officials possibly catch the sophisticated algorithm design and operation by IT corporations' experts?"
The Constitutional Court, in cases related to bans on concurrent businesses between medical institutions and pharmacies and between medical institutions and pharmaceutical wholesalers, recognized the need to block in advance the structure where conflicts of interest can arise, saying "regulation only after the fact is ineffective."
The ministry believes the same logic of the Constitutional Court should apply to the issue of concurrent operation of telemedicine platforms and wholesalers. As telemedicine becomes part of the institutional framework, a corresponding legal management system is needed.
A ministry 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 drug wholesalers, it could just as well allow a large wholesaler to run a platform, or enable giant platform corporations like Coupang and Alibaba to operate telemedicine platforms and wholesalers together."