FTC levies W41b price-fixing fine on Korean vaccine makers

Korea Fair Trade Commissioner Han Ki-jeong speaks during a briefing held at the Government Sejong Complex in Sejong, Thursday. (Yonhap)

South Korea's antitrust regulator on Thursday announced it has decided to assess 40.9 billion won ($32.3 million) of fines for 32 pharmaceutical firms and wholesalers for colluding to secure orders for the government’s vaccine procurement bids.

The 32 companies included global pharmaceutical firm GSK, GC Biopharma, Yuhan, Boryung and SK Discovery, which has SK Plasma and SK Bioscience as subsidiaries.

Under the the Fair Trade Commission's decision, Korea Vaccine Sales will receive a fine of 7.2 billion won while GC Biopharma is ordered to pay 2 billion won. SK Discovery, Boryung and Yuhan will have to pay 185 million won, 482 million won and 323 million won, respectively. GSK will face a fine of 351 million won.

According to the Korean antitrust regulator’s investigation, the companies engaged in collusive business activities in a total of 170 vaccine procurement bids carried out by the Public Procurement Service between 2013 and 2019. The 170 bids were worth around 700 billion won in total, the FTC added.

The FTC claimed that the companies selected a winner and fixed prices in advance. Through their collusive activities, the 32 companies were able to win 147 out of 170 bids, with winning bids set higher than usual, which helped them to maximize their sales.

The FTC argued that their price-fixing activities have resulted in the government's financial losses.

Those vaccine procurement bids were part of South Korea’s national immunization program funded by the government’s budget, the FTC said. The bids dealt with influenza, hepatitis, tuberculosis, tetanus and pneumococcal vaccines.

Meanwhile, GC Biopharma, Boryung and SK Discovery also received penalties for being involved in price-fixing activities in 2011.

By Shim Woo-hyun(ws@heraldcorp.com)