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The Korea Fair Trade Commission (led by Chairperson Sung Wook Joh, hereinafter the “KFTC”) decided to impose a corrective order and an administrative fine of 16 million won on Abbott Korea and Medtronic Korea for sponsoring cardiologists to participate in overseas academic conferences and providing travel expenses in the course of overseas education training to encourage the use of their cardiovascular stents.

* The KFTC decided to impose a corrective order on both Abbott Korea and Medtronic Korea, and an administrative fine on Abbott Korea.

The two companies, which import and sell cardiovascular stents, were found to have induced doctors to use their stents by keeping a record of sales for each doctor and providing financial support for participating in overseas seminars.

A stent is a tube-shaped medical device that is inserted into a narrowed passageway or vessel to hold it open. Implanting a cardiovascular stent, in particular, requires highly-advanced techniques as it\'s very tiny in size.

The cardiovascular stent market in Korea is led by four major importers and sellers, including Abbott, Medtronic, Boston Scientific and Biotronik. The market can be defined as an oligopolistic market as these large companies have similar market shares, taking up a combined market share of 70 to 75.

The sales of cardiovascular stents are entirely dependent on doctors, as they are a medical device that can only be dispensed by prescription.

Since November 2010, Korea has implemented the \"Dual Punishment System\", which makes doctors, founders of medical institutions and even health care providers liable for punishment in the event of improper economic benefits, to prevent the provision and receipt of rebates and maintain a transparent market.

In line with this system, the Korea Medical Devices Industry Association (KMDIA) has voluntarily adopted and complied with the Fair Competition Code on Transactions of Medical Devices since December 2011, upon the KFTC\'s approval. According to the Fair Competition Code, companies are allowed to sponsor doctors to attend overseas academic conferences, but only upon prior approval from the KMDIA. In addition, financial support for doctors attending overseas medical education and training courses is limited to travel expenses, meals, souvenirs, and lodging expenses, and sponsoring sightseeing is not allowed.

Abbott Korea and Medtronic Korea violated the Fair Competition Code and sponsored doctors attending overseas seminars to encourage them to use their cardiovascular stents.

From May 2014 to April 2018, Abbott Korea contacted its branch in Hong Kong and other organizers of overseas seminars in advance to send invitation letters to 21 doctors from 21 hospitals. Of them, 14 doctors who attended the seminars using the invitation letters were sponsored by the KMDIA. In addition, it offered an upgrade to business class on flights to the doctors attending overseas training courses in 2018. In 2014, it also provided local (China) tours to 17 doctors.

* A total of KRW 16.99 million was provided to the doctors who attended the two seminars.

From August 2017 to June 2019, Medtronic Korea notified the organizers of overseas seminars of the list of 36 doctors from 34 hospitals and their roles so that the invitation letters could be sent to them.

Of them, 23 doctors who attended the seminars using the invitation letters were sponsored by the KMDIA.

* A total of KRW 27.72 million was provided to the doctors who attended the two seminars.

The KFTC\'s measures are meaningful in that it detected indirect kickbacks provided by the companies which violated the Fair Competition Code and sponsored specific doctors.

The KFTC will continue to monitor unfair practices of offering kickbacks on the excuse of sponsoring overseas seminars in the entire medical device market including the cardiovascular stent.

*The Korean text of the documents is confirmed to be authentic and English version is only for reference

[Anti-Monopoly Division, KFTC, April 19, 2021]