Ministry of Health and Welfare holds second pharma industry innovation forum
Small operators, commission structures and subcontracting arrangements flagged for reform
The Ministry of Health and Welfare held the second meeting of the Pharmaceutical Industry Innovation Public-Private Consultative Body on Thursday at the Korea Press Center in Jung-gu, Seoul.
The session focused on ways to strengthen oversight of contract sales organizations, or CSOs — firms that handle drug marketing and promotion on behalf of pharmaceutical companies. Government officials, public institutions, industry associations, business representatives and experts attended to review the current regulatory framework and discuss key problems and potential remedies.
CSOs take on outsourced sales and promotional work from pharmaceutical companies and other clients. As drug makers have increasingly sought specialized external sales support, the sector has expanded rapidly, reaching roughly 15,000 registered operators as of 2024.
Solo operators account for about 70 percent of all CSOs, leaving the market fragmented with many small players. High commission rates tied directly to sales performance, combined with multi-tier subcontracting arrangements, have made it difficult to ensure accountability and transparency in drug sales practices — and to maintain an effective regulatory system.
The discussions and recommendations from Thursday's meeting are expected to inform future efforts to redefine the role of CSOs and chart a path for the broader development of the pharmaceutical industry.
Jung Kyung-sil, director general for health and medical policy at the Ministry of Health and Welfare, said the rapid growth and diversifying business models of the CSO market made it essential to build a solid institutional foundation ensuring both transparency and accountability in drug sales. "Based on the diverse field opinions and expert recommendations gathered at this consultative body, we will work through the body to develop stronger measures for CSO oversight and supervision," she said.
thlee@heraldcorp.com
