Fair Trade Commission closes complaint against Daewoong Pharma's distribution overhaul

The Korea Fair Trade Commission has closed a complaint filed by the Korea Pharmaceutical Wholesalers Association against Daewoong Pharma's "hub wholesale" distribution policy, removing the main legal pressure behind a months-long wholesale industry campaign and giving the pharmaceutical company fresh momentum for its distribution overhaul.

According to the pharmaceutical industry, the Fair Trade Commission closed the complaint — which the association had filed in May — on June 26.

Industry observers interpret the closure as a signal that the regulator found the case either unsuitable for formal review or lacking sufficient objective evidence to determine whether a legal violation had occurred.

Daewoong Pharma introduced its "block-type hub wholesale" model in March, designating qualified distributors in each regional zone across the country as anchor wholesalers. The model simplifies the multi-tier distribution structure and manages inventory in real time using AI-based demand forecasting and a barcode-enabled delivery tracking system.

The wholesalers association had responded by filing the complaint with the Fair Trade Commission, arguing that Daewoong Pharma's termination of contracts with existing direct-trade wholesalers and its shift to a hub-centered system constituted unfair refusal to deal and discriminatory treatment under the Fair Trade Act. The association also staged rallies outside the company's headquarters, contending that concentrating volume with select distributors threatened the survival of small and midsize wholesalers. Daewoong Pharma countered that the restructuring was a legitimate business policy aimed at improving delivery efficiency and cold-chain management.

With the complaint now closed, Daewoong Pharma sheds the burden of gapjil allegations and gains a stronger justification for modernizing its distribution network. However, the underlying tension between pharmaceutical companies' push for distribution reform and wholesalers' concerns over their livelihoods is expected to persist for now.