South Korea’s Ministry of Health and Welfare, in collaboration with the Health Insurance Review and Assessment Service (HIRA), has implemented a policy requiring pharmaceutical and medical device suppliers to publicly disclose expenditure reports. This initiative, known as the ‘K-Sunshine Act,’ was introduced in 2018 to enhance transparency and self-regulation within the industry, referencing similar legislation in the United States. The policy mandates suppliers to document, store, and publish details of legally permitted economic benefits provided to healthcare professionals. The aim is to foster trust and integrity in the distribution of medicines and medical devices. The legal basis for this policy is found in Article 47-2 of the Pharmaceutical Affairs Act and Article 13-2 of the Medical Devices Act.
The policy impacts manufacturers, importers, wholesalers, sellers, and rental companies of pharmaceuticals and medical devices, as well as promotional agents. In 2024, a total of 28,118 companies (15,849 pharmaceutical and 12,269 medical device firms) submitted expenditure reports, marking a 29% increase from the previous year. Of these, 4,778 companies (17% of submitters) reported providing economic benefits, such as payment discounts and sample products, to healthcare professionals. The most common benefits were payment discounts for pharmaceuticals (55.1%) and sample provision for medical devices (57.8%). The total value of benefits reached KRW 842.7 billion and 23.26 million products, showing a slight increase from the previous survey.
The third survey, conducted by HIRA, reflects growing industry awareness and compliance with the reporting system. The number of companies submitting reports has steadily increased from 11,809 in the first survey to 28,118 in the latest round. The reports are now accessible through HIRA’s website and the Expenditure Report Management System (KOPS) for five years, allowing the public and healthcare professionals to review individual company disclosures. If discrepancies are found, healthcare professionals can request corrections directly from the reporting companies. This process supports the establishment of transparent distribution practices and encourages ongoing industry cooperation.
Frequently asked questions include: How can the public access expenditure reports? Reports are available on HIRA’s website and the KOPS system for five years. What types of economic benefits are permitted? Legally allowed benefits include sample provision, academic conference support, clinical trial assistance, product briefings, post-marketing surveys, payment discounts, and performance verification for medical devices. What should healthcare professionals do if they find errors in the reports? They can request corrections from the reporting companies. The government emphasizes that continued industry cooperation is essential for stable and trustworthy distribution of pharmaceuticals and medical devices.
Metaqsol observes that South Korea’s policy to publish expenditure reports online is a robust step toward improving transparency in the healthcare industry. The increase in participating companies and the detailed disclosure of economic benefits reflect heightened industry awareness and compliance. Public access to these reports, along with mechanisms for correction, supports accountability and trust. This approach is likely to encourage ethical practices and could serve as a model for similar regulatory frameworks internationally.