The Korea Pharmaceutical Distribution Association and Daewoong Pharmaceutical(069620) agreed to end their conflict over the designation of hub wholesalers and the overhaul of distribution policy and to draw up a co-prosperity plan. However, this agreement does not change the contracts or fee terms between hub wholesalers and sub-wholesalers.
The Pharmaceutical Distribution Association said on the 26th that it reached an agreement related to distribution policy, including changing the existing term "hub wholesaler" to "distribution partner," ending its recent conflict with Daewoong Pharmaceutical. Accordingly, the association decided to halt all protest activities, including rallies and solo demonstrations in front of the National Assembly and the presidential office.
Daewoong Pharmaceutical said the agreement does not change anything related to contracts. The company said, "Transactions between hub wholesalers and sub-wholesalers fall under transactions between distribution firms," and added, "The sub-wholesaler fee is also a matter that no one other than the transaction stakeholders can intervene in, and there was no agreement under which Daewoong Pharmaceutical would adjust the fee."
Park Ho-young, president of the Pharmaceutical Distribution Association, said, "The conflict so far was growing pains that arose in the process of building a more sound and rational pharmaceutical distribution ecosystem," and added, "Through sincere communication with Daewoong Pharmaceutical, we drew a decision that enables mutual growth between drugmakers and the distribution industry."
With this agreement, the conflict between drugmakers and the distribution industry over the hub wholesaler policy has been settled for now. Attention is on whether, in future talks over other drugmakers' distribution policies, there will be continued cases of drugmakers and the distribution industry strengthening prior consultations.