Seoul Western District Prosecutors Office [Yonhap]
Seoul Western District Prosecutors Office [Yonhap]

Several university hospital professors have been indicted for accepting hundreds of millions of won in kickbacks from a medical device manufacturer in exchange for using its products. One professor went so far as to set up a shell company in his wife's name to act as a sales agency for the firm, collecting more than 778 million won in commissions over seven years.

The Seoul Western District Prosecutors Office's food and drug crime investigation unit, led by Lee Jeong-hun, indicted the chief executive and a former executive of medical device maker Jenos on Thursday on charges including violations of the Medical Devices Act and the Fair Trade Act. Six university hospital professors who received kickbacks disguised as research funding were also indicted without detention on charges including violations of the Medical Service Act.

According to prosecutors, the company spent roughly 4.2 billion won over 10 years — from 2016 through last year — proposing post-market clinical trials of its cardiovascular stents to 53 university hospitals nationwide and disbursing the money under the guise of research fees.

Post-market clinical trials are a regulatory mechanism designed to verify the safety and efficacy of a medical device after it has gone on sale. Prosecutors determined, however, that the company used the trials not for research purposes but to drive up sales of its own products.

Research fees were paid regardless of whether the recipients produced final reports or published academic papers. The company paid between 200,000 won and 1.15 million won per case whenever a hospital implanted its stent in a patient and enrolled that patient as a clinical trial subject.

The six indicted professors each pocketed between 44 million won and 408.1 million won in research fees.

One cardiology professor at a university hospital went further, setting up a company in his wife's name to improperly pocket additional profits. The firm performed no actual sales, delivery or inventory management work — it was a shell in name only — yet it received approximately 778 million won ($530,000) in sales commissions from the device maker over seven years.

A prosecutors' office official said the office would "respond sternly to illegal kickback crimes that threaten the fair trading order of the medical market and the fiscal health of the national health insurance system, and will thoroughly recover criminal proceeds."


kido@heraldcorp.com