(Health Korea News / Soon-Ho Lee) The second ruling in the lawsuit filed by Kwangdong Pharmaceutical against the Public Procurement Service for restrictions on bidding for the National Immunization Project (NIP) will be announced soon. While Kwangdong Pharmaceutical has already won once, attention is being paid to whether it will receive a favorable ruling this time as it was recently acquitted in the second trial of the criminal case.
The 10-3 administrative branch of the Seoul High Court recently concluded the argument in the appeal hearing filed by Kwangdong Pharmaceutical against the Public Procurement Service for the cancellation of the restriction on bidding participation and decided to deliver a ruling on December 20. It has been about four years since the appeal was filed on November 29, 2021. It is interpreted that the litigation period was prolonged because the court conducted the hearing while referring to the situation of the criminal litigation that was being conducted simultaneously with the administrative litigation.
This lawsuit was filed by Kwangdong Pharmaceutical, which was restricted from participating in the national procurement project bid by the Public Procurement Service on charges of collusion during the National Immunization Project (NIP) bidding process.
The item suspected of collusion during the bidding process was the pneumococcal vaccine ‘Synflorix’. Kwangdong Pharmaceutical receives ‘Synflorix’ from GSK and supplies it exclusively in Korea. There were no competitors selling the same product, which caused problems during the NIP process. Previously, the Public Procurement Service announced a bid for ‘Synflorix’ with the Korea Disease Control and Prevention Agency as the requesting agency in February 2019, but only Kwangdong Pharmaceutical, the exclusive distributor, participated in the bid. Ultimately, the bid was rejected, and the Public Procurement Service issued a re-announcement the following month.
Accordingly, in order to prevent a failed bid, GSK asked Mr. A, a vaccine wholesaler, to participate in the bidding as a bridesmaid and relayed this fact to Kwangdong Pharmaceutical. During the bidding process, Mr. A bid at a higher price than Kwangdong Pharmaceutical and was eliminated due to exceeding the expected price, and Kwangdong Pharmaceutical was selected as the procurement contract company.
The Fair Trade Commission discovered this behavior and reported these companies, including Kwangdong Pharmaceutical, to the prosecution on charges of collusion. In addition, the Public Procurement Service restricted Kwangdong Pharmaceutical from bidding.
Administrative Litigation First Trial Court “Bidding restrictions are excessive”… Criminal suit: Guilty in the first trial → Not guilty in the second trial, overturned
Kwangdong Pharmaceutical previously received a favorable ruling in the first trial of an administrative lawsuit (suit for cancellation of a restriction on bidding participation) that was concluded at the Seoul Administrative Court. Although it is true that the company’s actions constitute collusion, the trial court’s judgment is that restricting bidding qualifications as a measure is excessive.
At the time, the first trial court said, “The Korea Disease Control and Prevention Agency had to understand the supply and demand situation, including the fact that Kwangdong Pharmaceutical is the exclusive domestic distributor of vaccines, through working-level promotion team meetings, etc., and although it could have easily known this, it took a serious decision on the procurement method of vaccines that are subject to mandatory vaccination. “The profit gained by Kwangdong Pharmaceutical in this case was not large, and considering the details and number of collusion acts, it was a special case in which mitigating factors for Kwangdong Pharmaceutical were not sufficiently considered in determining the sanction period of the disposition,” he said. “It appears that there are circumstances,” he said, explaining the reason for the ruling in favor of the plaintiff.
In the case of the administrative lawsuit, Kwangdong Pharmaceutical was found guilty of collusion in the first trial, but the result was overturned to not guilty in the second trial issued in July of this year.
The 3rd Criminal Division of the Seoul High Court, which was in charge of the second trial, said, “At the time, the bidding was structured so that only companies that had been issued a supply commitment letter from a vaccine manufacturer or importer could win the bid, but it acknowledged the possibility that a third party other than a vaccine joint seller could be issued a supply commitment letter. “It is difficult to do so,” he explained. “It is difficult to say that there was a real competitive relationship between other companies, including the joint seller and the bridesmaid company, in each bid in this case.”
At the same time, “The presence or absence of a bridesmaid only determines whether the bid in question will be rejected or won due to a single bid, and it does not appear that it could have substantially influenced other conditions,” he said. “The joint actions of the defendants did not affect transaction conditions such as price.” “It is difficult to conclude that there was a risk of giving or giving away,” he added.
In particular, it was believed that the government was greatly responsible for the collusion activities of Kwangdong Pharmaceutical and others.
The court said, “In order to meet the tight schedule for the NIP project at the time, officials from the Korea Centers for Disease Control and Prevention urged or pressured those in charge of the vaccine joint sales company to quickly win the bid,” and added, “The defendants’ act of acting as a sidekick was due to the need for timely supply of vaccines for the NIP project, He emphasized, “The background was to quickly complete the bidding process through pressure or encouragement from the Korea Centers for Disease Control and Prevention.”
As soon as the second trial of the criminal suit is over, the second trial of the administrative suit begins.
After ruling in the second trial of a criminal case related to Kwangdong Pharmaceutical’s vaccine bid collusion in July, the Seoul High Court held only two more arguments in the administrative lawsuit between the Public Procurement Service and Kwangdong Pharmaceutical, then closed the argument and set a date for judgment. .
The analysis is that the evidence, trial contents, and ruling revealed through the criminal lawsuit have in fact become the final puzzle that will end this administrative lawsuit.
In a situation where Kwangdong Pharmaceutical has already won the first trial of the administrative lawsuit, expectations for victory in the second trial of the administrative lawsuit are growing as the administrative litigation court has begun the ruling process after the second trial of the criminal case was found not guilty.
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