The South Korean government is moving to tighten oversight of contract sales organizations (CSOs) that handle drug marketing and promotion on behalf of pharmaceutical companies, as their number has surpassed 15,000. Sole proprietors account for 70% of the total, and practices such as high performance-linked commissions and multi-layer subcontracting have spread, prompting calls for greater transparency in pharmaceutical sales.
The Ministry of Health and Welfare said it would hold the second meeting of its public-private council on pharmaceutical industry innovation at the Korea Press Center on the morning of Sept. 17 to discuss measures to strengthen the management and supervision of drug sales agents. Government officials, public institutions, industry associations, drugmakers and outside experts are attending the meeting to review the current CSO oversight framework and examine problems found in the field along with possible improvements.
CSOs are businesses that carry out drug sales and promotional work under contract from pharmaceutical companies and others. The market has grown quickly as more drugmakers have specialized these functions and outsourced them.
As of 2024, there were about 15,000 CSOs in South Korea. Small operators make up a large share, with sole proprietors accounting for 70% of the total. In some cases, high commissions are paid based on sales performance, and contracted sales work is passed on to other firms in a multi-layer subcontracting structure.
The government believes the spread of such practices makes it necessary to improve transparency and accountability in drug promotion and to reinforce the effectiveness of the current oversight system.
The council will focus on the specific direction of CSO management and supervision and on improvement tasks that can work effectively in practice. The government plans to use the views of industry officials and experts presented at the meeting to redefine the role of CSOs and to revise rules aimed at establishing sound sales practices in the pharmaceutical industry.
"As the market for drug sales agents expands rapidly and sales practices become more varied, it is important to have an institutional foundation that can secure both transparency and accountability in pharmaceutical sales," said Jeong Kyoung-sil, head of the ministry's Office of Healthcare Policy. "We will draw up measures to strengthen the management and supervision of CSOs based on a range of views from the field and recommendations from experts."
