In addition to traditional legal issues involving the life sciences and healthcare industries (e.g., criminal, M&A, transactions, HR, general corporate governance), the most dynamic areas of our practice in recent years include the following:

Anti-Corruption & Compliance 

General Compliance

We regularly advise companies on compliance with the Pharmaceutical Affairs Law, the Medical Devices Act, the Cosmetics Law, Food Hygiene Law and the Monopoly Regulation and Fair Trade Law, particularly with respect to advertising claims, adverse event reporting, KGMP, KGSP and product recalls.  We also represent companies in investigations and enforcement actions by the health authorities, competition authorities, and the police/prosecutors’ offices.  As regulatory violations may also carry criminal sanctions, an important focus of our work is to minimize the risk of criminal liability.

Interactions with HCPs / Public Officials

The life sciences and healthcare industries have been frequent targets of investigations and enforcement actions by government agencies, which are actively enforcing laws that prohibit the giving of improper benefits to healthcare professionals.  The Korean government’s focus on bribery has been accompanied by increasing scrutiny by the media and NGOs.  We have unrivalled experience in advising on these laws and regulations, crafting internal codes of conduct, training employees, and representing companies in government investigations and enforcement actions.

Internal Investigations

Today’s heightened enforcement environment means companies need strong internal controls to ensure employees’ compliance.  We frequently design and carry out internal investigations for various purposes, including periodic compliance reviews, ad hoc reviews triggered by allegations of non-compliance, especially by whistleblowers, and preparations for government investigations.  We also assist in developing dawn raid manuals and advise on dawn raid preparedness.

Regulatory

Licensing/Approvals

In advising companies on how to put together application dossiers for product approvals, former MFDS drug and medical device application examiners on our team draw on their expert knowledge to review technical files, test results, GMP assessments, and clinical trials.  Our team also routinely troubleshoots for clients when they are met with obstacles in the process of obtaining market approvals or reimbursement prices.  In addition to direct assistance, we provide up-to-date information on how the MFDS has been implementing the product registration process recently and how such practices have affected business.  Our Practice also provides legal information pertaining to product maintenance, including handling and distributing used products, upgrades to medical equipment, and overseas GMP due diligence conducted by the MFDS for products manufactured overseas. 

Labeling/Advertisements

Pharmaceutical, medical device, food and beverage, cosmetics, and animal health products are subject to strict labeling requirements as well as restrictions on the type of claims that can be made.  In this area where many types of violations may result in criminal as well as administrative sanctions, our team has unparalleled expertise in advising on labeling requirements and the scope of permissible claims.  We have successfully represented companies in proceedings brought by the MFDS, the Korean Fair Trade Commission (“KFTC”), and the prosecutors’ office.

Clinical Trials

Proper planning and management of clinical testing is increasingly important in obtaining product approvals and reimbursement prices.  We regularly assist clients in developing, reviewing, adapting and obtaining approvals with respect to pre- and post-marketing clinical trial protocols by reviewing statutorily required data on safety and efficacy and GCP compliance.  We also advise on measures to protect against liability which may result from the use of new medications and therapies, medical devices, and in vitro diagnostics in clinical trials.

Antitrust & Competition

Antitrust/Cartel

Although the prices of pharmaceuticals and medical devices are strictly regulated under the national health insurance system, there are a number of antitrust issues, such as abuse of market dominance (e.g., restrictive practices) and collusion (e.g., pay-for-delay agreements) that may arise in the life sciences business, other than pricing.  Bid rigging claims have been particularly prevalent in the vaccine business, as a large portion of vaccine distribution is determined through tenders.  Our team advises companies on business activities, such as partnership agreements and tenders, to mitigate the risk of antitrust/cartel investigations by the KFTC, and defend them in such investigations.

Unfair Trade Practices

Life sciences companies are frequently found to have engaged in unfair solicitation of customers via value transfers to healthcare professionals.  Our team, which has the most extensive experience in Korea regarding the KFTC’s investigations into interactions with healthcare professionals, works with companies from the initial stage of developing marketing or promotional programs to minimize the risk of liability for unfair trade practices under the Monopoly Regulation and Fair Trade Law.  Unfair trade practice disputes often arise in the medical devices industry because of high reliance on distributors.  We not only represent companies in disputes with distributors or in KFTC investigations, but also provide comprehensive advice throughout the entire process of interacting with distributors, from the execution of distribution agreements to termination of an existing distributor.

Pricing & Reimbursement

Obtaining Pricing and Reimbursement

We regularly advise pharmaceutical, medical device, biotech and diagnostics clients on strategies for obtaining optimal reimbursement prices for newly listed drugs and treatment materials under Korea's National Health Insurance Act and reimbursement guidelines.  The Korean pricing and reimbursement system has undergone significant changes in recent years: companies seeking reimbursement listing for new products must first submit to a pharmaco-economic assessment by the HIRA and afterwards negotiate prices with the National Health Insurance Service.  The government is also under increasing pressure from shortfalls in insurance financing to limit reimbursement.  As a result, it is more difficult than ever for clients to obtain prices that reflect the true cost of innovation.  Our life sciences and healthcare attorneys and former pricing regulators draw on their extensive experience to help clients navigate the complex pathways for obtaining the desired reimbursement listing and pricing.

Protecting Reimbursement Prices

Even after a drug or a medical device is launched in the market, numerous price adjustment mechanisms including the price volume linkage system, the price-kickback linkage system, the price-patent linkage system and others are in place that enable the government to cut reimbursement prices.  Due to pressures to reduce healthcare costs and minimize the budgetary impact on the national health insurance system, the government has been using these mechanisms vigorously.  We understand that maintaining fair pricing in one market, such as in Korea, is critical to our clients’ global business goals.  Our team has the experience and expertise to help manage a product throughout the entire span of its “price cycle.”  In this endeavor, we also closely coordinate with our IP Practice, which is the largest and has been consistently recognized as the best in Korea.

New Health Technology Assessment

Under Korea’s health insurance system, new health technologies are defined as medical technologies that utilize novel mechanisms or differ from existing technology in terms of subject, purpose, or method.  The safety and efficacy of such new health technologies must be approved through systematic review by the National Evidence-based Healthcare Collaborating Agency before they can be listed for insurance reimbursement and used on patients.  When there is little academic literature about the technology at issue, though, the approval may be obtained under a limited assessment or exemption policy.  Our team supports companies through the assessment process by conducting literature reviews, suggesting a review policy suited to the technology in question, and drafting effective expert opinions so that new health technologies can be approved for market use within the shortest possible time.

Patent, Licensing and Crisis Management

Licensing and Patent Protection

Successfully managing a product throughout its life cycle requires a comprehensive strategy that integrates regulatory and IP expertise.  We adopt such multidisciplinary approaches when advising clients on the licensing of technology, patents, and trademarks.  We work as a partner with our clients in the protection of patents and other intellectual property through vigilant enforcement and infringement actions.

Product Liability & Crisis Management

We advise on all aspects of product liability, from prevention to crisis management to defense in lawsuits.  For example, we help companies put in place proactive systems for handling product complaints effectively so that they do not develop into disputes; advise companies on the appropriate positions to take with regard to official product inquiries sent by the courts in the context of medical malpractice lawsuits; and also assist companies in developing and implementing product recall programs as required by local regulators and in communicating with them.

Criminal & Administrative Defense

We provide comprehensive legal advice and strategic counsel in responding to regulatory investigations and minimizing risks of criminal and administrative sanctions for companies in the life sciences and healthcare industries.  A holistic approach is especially critical for investigations into value transfers for healthcare professionals related to pharmaceutical and medical device products, as a charge for the giving of improper benefits could result in administrative sanctions such as sales suspensions and/or reductions to reimbursement prices, in addition to a criminal penalty.  Our team of attorneys and experts, including industry specialists, former police/prosecutors, and former officials of relevant government agencies with practical regulatory experience, have worked together to devise the most effective plan for the situation at hand, achieving the best possible outcomes for our clients in many leading cases.

Tax & Customs

Life sciences and healthcare companies are often taxed by the tax authorities without proper consideration of industry-specific practices, such as product presentations and training sessions.  We work with our Tax Practice to help the tax authorities better understand unique industry practices so that companies will not be subject to unjust taxation. 

Given that resale prices in Korea for drugs and medical devices are often determined by government policy, an understanding of the numerous policies and practices that govern these industries is essential to successfully responding to investigations into transfer prices by the customs authorities.  Drawing upon our wealth of knowledge and experience handling customs matters, we collaborate with our International Trade & Customs Practice to represent our clients in audits and investigations by the customs authorities, assist them with FTA applicability, and file Advanced Customs Valuation Arrangements.  

Digital Healthcare

Core technologies such as artificial intelligence, IoT, wearable devices, smartphone apps, cloud computing, 3D printers, and genome analysis, are increasingly being used for medical purposes, including wellness care and disease prediction as well as personalized diagnosis and prescriptions (collectively “Digital Healthcare”).  The wide array of laws and regulations governing medicine unique to Korea poses high entry barriers to the Korean digital healthcare market.  To help our clients successfully navigate this complicated legal landscape, Kim & Chang has formed a new team specializing in digital healthcare, which includes experts with substantial experience in these core technologies.  The depth of insight of our team will ensure that the regulatory and business solutions we provide for our clients’ ventures in digital healthcare are effective and ahead of the curve.

Compliance and Defense

• We have represented the majority of the multinational pharmaceutical and device companies that have been subject to investigations in recent years by the KFTC, MOHW, MFDS, and police/prosecutors relating to interactions with healthcare professionals.
• We have drafted and reviewed policies and SOPs, and developed compliance training and enforcement programs for the majority of multinational pharmaceutical and medical device companies that do business in Korea.
• We successfully defended numerous pharmaceutical, medical device, cosmetics and food companies in regulatory/criminal proceedings involving allegations of false/exaggerated, medicinal or otherwise improper claims.
• We successfully defended pharmaceutical companies against allegations of illegal advertising of a drug before the product launch.
• We assisted pharmaceutical companies in defending against product liability claims in respect of contamination that occurred during manufacture.
• We successfully defended pharmaceutical companies from charges that certain service fees paid to physicians constituted illegal payments in violation of the Pharmaceutical Affairs Law.

Pricing and Reimbursement

• We assisted a pharmaceutical company defend the reimbursement price of a drug’s primary dosage when the MOHW sought to reduce the reimbursement prices of all dosages of the drug.
• We crafted and successfully executed a strategy to expand the reimbursement scope for an oncology drug without having to voluntarily reduce the reimbursement price of the drug as the MOHW usually requires.
• We have successfully advised numerous clients to obtain desired reimbursement prices for newly listed drugs that reflect the cost of innovation and defend against price cuts to already listed drugs.
• We assisted a pharmaceutical company in expanding the reimbursement scope of its drug (indications added), giving a broader patient pool access to the drug, without having to voluntarily lower the reimbursement price of the drug as the MOHW usually requires.
• We assisted a pharmaceutical company in successfully challenging the MOHW’s decision to change the first-line status of the client’s blockbuster drug to second line, establishing seminal administrative law precedents regarding standing and ripeness in the process.
• Using policy-based as well as legal arguments, we successfully defended reimbursement prices of drugs for a number of companies against attempted price-cuts based on allegations that improper benefits were given to healthcare professionals.
• We have assisted pharmaceutical companies in executing and extending risk sharing agreements with the government.

Transactions: M&A, Business Alliances, and Restructuring

• We successfully advised a medical device company on terminating an existing distributor and establishing a joint venture with a new partner.  The existing distributorship was amicably terminated via an agreement under which the relevant product approvals were successfully transferred to the newly established joint venture.
• We successfully defended pharmaceutical and medical device companies in KFTC investigations on allegations that they had unfairly terminated a distribution arrangement.
• We successfully assisted a pharmaceutical company in closing and selling its manufacturing plant and shifting its business from local manufacturing to the importation of finished products.
• We advised a number of medical device companies on the successful acquisition of their distributor in Korea and assisted with a wide range of post-closing matters.
• We have carried out for numerous companies the integration of their Korean operations following global mergers.
• We successfully advised a pharmaceutical company on investing in one of Korea's largest local pharmaceutical companies and entering into a business alliance with the Korean partner.  The project marked the first of its kind in the industry.
• We assisted numerous multinational pharmaceutical companies to successfully take back product approvals for their products held by their local distributor.  In one case, we structured the transaction such that the local distributor spun off part of its business into a separate joint venture company, in which the multinational pharmaceutical company acquired a majority stake.

Product Approvals

• We have advised pharmaceutical companies on the appropriate CRO contracting structure from Korean regulatory and practical perspectives, as well as on the allocation of responsibilities and roles.  We reviewed the Master Service Agreement and Work Order, contracting structure, safety reporting, site agreements, indemnity, informed consent and patient compensation. 
• We successfully settled on behalf of a pharmaceutical company a potential product liability claim for injuries allegedly resulting from taking part in a clinical trial.
• We advised a pharmaceutical company on an appropriate legal and regulatory response to irregularities found in the course of the client’s GCP audit of clinical trial sites.
• With regard to a voluntary recall request from the MFDS for finished products made with active ingredients not registered in the Drug Master File, we were able to help the client successfully avoid a voluntary recall of the product by asserting there were no issues of safety, efficacy, or quality. 
• We successfully assisted a pharmaceutical company in overcoming regulatory hurdles with the MFDS to obtain product registration for its biologics product.

Labeling, Claims and Advertisements

• We successfully advised a food company in an investigation by the prosecutor’s office into the possibility that the company made medicinal claims for a product through advertising, in violation of the Food Hygiene Act.
• We have reviewed numerous labels for food and personal care products to comply with labeling requirements.
• We were successful in obtaining an injunction against a cosmetics company that was taking advantage of our client’s high end brand image through advertising and promotional activities that included references to our client’s products. 

Product Integrity/Protection/Crisis Management

• We have overseen the listing of patents under the newly created Korean patent linkage system (analogous to the US Orange Book system), helping close to 40 clients navigate the unique examination standards and procedures implemented by the MFDS.
• We represented a consumer household products manufacturer in investigations by the KFTC relating to charges of false and exaggerated claims.
• We have represented numerous cosmetics companies against product liability claims.