Venture industry pushes back against passage of so-called 'Doctor Now prevention law'

The venture industry expressed regret Friday after the National Assembly passed an amendment to the Pharmaceutical Affairs Act widely dubbed the "Doctor Now prevention law," warning that regulations targeting specific business models could stifle startup innovation.

The Korea Venture Business Association said in a statement Friday that lawmakers "chose the strongest form of prohibition — an outright ban on the specific business model of operating a wholesale business" and called it "a case of a small startup innovation being crushed by entry regulations in a new industry and the vested interests of professional associations."

The Assembly passed the amendment at a plenary session Thursday. The law bars telemedicine platforms from simultaneously operating pharmaceutical wholesale businesses. Doctor Now is currently the only telemedicine platform running such a wholesale operation, which is why the legislation has been nicknamed the "Doctor Now prevention law."

The venture industry argues that banning an entire business model outright — rather than regulating specific problematic conduct — goes too far. The Korea Venture Business Association said it "expresses deep regret that the bill ultimately passed the plenary session in its original form, despite the submission of various compromise proposals."

Industry groups also warned the move could repeat the innovation-chilling precedent set by the so-called "Tada ban." Kospo said "neither the benefits that the public has experienced nor the explanations submitted by the industry were ultimately reflected." The group explained that telemedicine is complete only when patients can obtain their prescribed medications in time, and that telemedicine startups had moved to link prescription drug inventory information to help patients find pharmacies that stocked their medications.

"If there were concerns, regulators could have chosen to directly govern the specific conduct in question or strengthen oversight mechanisms," Kospo added. "Restricting the very viability of a business is excessive."

The groups further warned that if regulatory setbacks continue to frustrate entrepreneurs who use technology to solve problems that existing systems have failed to address, founders may be deterred from taking on such challenges altogether.

The venture industry did, however, express cautious optimism about a separate plan the government unveiled Thursday to improve patients' access to medications. The government said it would first allow drug delivery for residents of remote islands and rural areas, people with disabilities, and patients with limited mobility — timed to coincide with the formal institutionalization of telemedicine later this year — and would discuss expanding the service to all telemedicine users in the future.

The government also plans to establish a cross-ministry public-private consultative body involving pharmacist associations and the telemedicine industry, and to improve the prescription drug inventory information system so patients can more easily locate pharmacies that carry their medications.

Kospo said it "considers it meaningful that the issue of patients' access to medications — long raised by telemedicine startups — is now being treated as a challenge for society as a whole to solve, rather than merely one company's business practice," and pledged to actively participate in related discussions to ensure they lead to substantive policy improvements.