On one side, general anesthetics and narcotic medicines are being illegally distributed without controls; on the other, a shortage crisis spreads because children's fever reducers are out of stock. They may look like separate incidents, but the pharmaceutical industry and experts note they are the result of "information opacity" in Korea's drug supply chain. Even if production increases, medicines vanish on the ground—at the center is a distorted distribution structure where more than 3,500 companies are scattered and tie up inventory. We conducted an in-depth investigation into the structural blind spots and remedies of Korea's festering drug distribution system by speaking with former and current industry insiders. [Editor's note]
In the summer of 2018, millions of tablets of the hypertension treatment "valsartan" were urgently recalled from pharmacies nationwide. The move followed the detection of a potentially carcinogenic substance (NDMA) in China-made ingredients. The government and the pharmaceutical industry moved to recall the products, but they ran into limits in pinpointing exactly which patients had received the drugs.
Even then, the "drug serialization system," which assigns a unique number to each medicine and manages production and distribution histories, was in place, but it was difficult to track down to the individual patient in the field.
Former and current pharmaceutical industry officials and experts described this as "a structural problem where data do not connect." Because supply chain stage information and medical institution usage information are managed separately, the overall flow of medicines cannot be linked into a single system.
◇Why tracking breaks even with serial numbers
The drug serialization system operates by having drugmakers affix a unique number to each minimum packaging unit and report shipping information. Wholesalers also manage this at the inbound and outbound stages.
Prescription drugs (ETC), for which swift traceability and recall are essential in cases of misuse concerns, counterfeiting prevention, or safety issues, are subject to serialization. Over-the-counter medicines (OTC), which consumers can buy at pharmacies without a doctor's prescription, are not required.
But this record breaks as it passes through hospitals and pharmacies. That is because clinics and pharmacies do not have the same level of serialization reporting obligations as drugmakers and wholesalers.
Instead, the Health Insurance Review & Assessment Service (HIRA) identifies medicine usage at medical institutions and pharmacies through insurance claims data. This information is usage performance data for patient care and reimbursement management, and it is not directly linked to serialization information at the supply chain stage.
In the end, because information from the production and distribution stages and information from the actual usage stage move separately, it is difficult to follow the flow of medicines along a single path.
Pharmacy dispensing practices also affect distribution tracking. Pharmacies receive medicines by the box, but actual dosing is divided into single tablets. Each medicine box has a unique serial number, so the movement path can be tracked up to the wholesaler, but the moment a pharmacist opens the box and dispenses by the tablet according to the prescription, the link between that serial number and the patient disappears.
There is also a gap in the "aggregation" system, which assigns a bundle number when packing multiple medicine boxes into a larger carton to boost logistics efficiency. Adoption of drug aggregation is not legally mandatory at present.
Because there are no penalties if drugmakers or wholesalers do not use it or handle it poorly, it is inevitably difficult to track in real time which carton large volumes of drugs were bundled into and where they flowed during the complex wholesale distribution process.
This structure also surfaced in the 2018 valsartan incident. While the distribution path of the recalled medicines could be identified, there were limits to pinpointing down to individual patients. At the time, health authorities proceeded with recalls and cessation of use centered on medical institutions that handled the medicines.
The vulnerabilities of this structure are emerging not only in drug recalls but also in field supply and demand.
An official at a pharmaceutical company said, "There are months when supply is far greater if you compare the company's supply volume with pharmacies' dispensing volume," adding, "Looking only at shipping data, it is by no means insufficient, so even if we wonder why pharmacies say they are short, we cannot ultimately find the root cause."
On this, Kim Dong-suk, a professor in the Department of Health Administration at National Kongju University, noted, "The current system shows only the 'supply data' that move from drugmakers to wholesalers to medical institutions; it is cut off from the 'usage data' that identify how they are actually used for patients and where they are tied up."
Kim diagnosed, "Because the two pillars of data—supply and usage—are not linked, even if supply instability occurs, we cannot even determine at which stage the bottleneck arose."
◇Narcotics are trackable, but controls leak from within
Unlike other general medicines, narcotic medicines are within a system that can trace the entire distribution process.
The Ministery of Food and Drug Safety manages the entire process from manufacturing and import to hospital and pharmacy use through the Narcotics Information Management System (NIMS). Hospitals and pharmacies must report handling volumes, inventory, and dosing records, and violations lead to measures such as business suspension. A certain level of fees is set to compensate reporting activities.
But even with such a system, leaks and misuse incidents involving narcotic medicines, including anesthetics such as propofol and psychotropic drugs, continue. Observers say the reason lies not outside the system but in "internal management."
Internal controls collapse when false or inaccurate reporting occurs within medical institutions, storage management is inadequate, or some staff take medicines out without authorization.
In Feb., sedative anesthetics including propofol and syringes were found in the Porsche that crashed off Banpo Bridge in Seoul. The drugs were narcotic medicines with prescription histories confirmed at medical institutions. According to police, the driver was found to have obtained the drugs from a nursing assistant at a plastic surgery clinic in Seoul's Gangnam.
As such problems mounted, the Ministery of Food and Drug Safety also moved to tighten oversight. On the 9th, the ministry announced for public comment revisions to the Enforcement Decree and Enforcement Rule of the Narcotics Control Act to strengthen the duty of narcotics handlers to manage and supervise employees and to raise the level of administrative penalties for violations. The draft includes clarifying management responsibility to prevent theft and leaks and toughening standards for business suspension upon violations.
A medical community source who requested anonymity said, "On a computer screen, narcotics look perfectly trackable, but the system cannot catch illegal practices in the field such as a doctor falsifying dosing logs or an employee secretly siphoning off drugs," adding, "There are clear limits to control." The source said, "Once prescription drugs cross the threshold of hospitals and pharmacies, they enter a black hole where there is no way to track who actually received the drugs or which warehouse they are in."
An employee at a pharmaceutical company asked rhetorically, "Even though the Ministery of Food and Drug Safety tightly binds narcotics through the dosing stage, gaps like false internal reporting or unauthorized removal still occur, so how much worse must it be for supply, demand, and inventory management of medicines with looser oversight?"