Dr.Now Can't Smile Even With Full Telemedicine Allowance

Starting this December, telemedicine will be officially legalized under the framework of the Medical Service Act. The policy is to fully allow all patients who receive telemedicine consultations to have their medications delivered. This marks the formal institutionalization of telemedicine, which was temporarily permitted since 2020 due to the COVID-19 pandemic, after a one-year preparation period. However, despite these positive changes, telemedicine platforms like Dr.Now are not entirely pleased.

On August 20, a bill was passed in the National Assembly that completely prohibits telemedicine platforms from establishing and operating pharmaceutical wholesalers. This bill, dubbed the 'Dr.Now prevention bill' by the media, is expected to directly impact the revenue generated by platforms like Dr.Now from concurrently operating pharmaceutical wholesaling as subsidiaries. Since platforms were unable to earn brokerage fees, they had actively sought other revenue sources in this way.

Previously, only medically vulnerable groups such as people with disabilities, residents of remote islands and mountainous areas, and those aged 65 or older with long-term care ratings could receive medication delivery after a telemedicine consultation. While this announcement appears to be positive news that will significantly improve access to telemedicine, the platform industry has expressed concerns that related administrative regulation revisions could actually narrow the scope of telemedicine.

This is due to concerns that revisions to subordinate laws, linked to the Ministry of Health and Welfare's policy, could reduce the patient pool eligible for telemedicine. As the subordinate law amendments have not yet been pre-announced or outlined, the industry is reacting cautiously.

Pharmacist groups argued that platforms could engage in unfair trade practices, such as forcing pharmacies to procure medicines from specific wholesalers or giving preferential exposure within the platform to pharmacies that received medicines from their subsidiaries. There was strong opposition from pharmacist groups from the moment telemedicine platforms began establishing pharmaceutical wholesalers in 2023, and in 2024, the CEO of Dr.Now even appeared as a witness at a parliamentary audit regarding this issue.

According to reports, these two companies are estimated to have generated monthly revenues of 1 billion to 2 billion won through pharmaceutical wholesalers. Although there is a one-year grace period, pharmacies may consider withdrawing from the service, meaning revenue hits could occur immediately. This could also negatively affect investment attraction for telemedicine platforms.

Platforms argue that operating their own pharmaceutical wholesale business was aimed at providing convenient services to telemedicine users. Currently, patients who are not medically vulnerable must visit a pharmacy in person to pick up their medication after a telemedicine consultation. The problem is the difficulty in finding a pharmacy that stocks all the medications listed on a prescription. Since products with the same active ingredient vary by pharmaceutical company, it is not easy for one pharmacy to stock every product line due to inventory management. The reporter expressed discomfort after having to visit multiple pharmacies to find an anti-inflammatory painkiller prescription.

Telemedicine platforms were able to ascertain which products pharmacies stocked and their inventory levels through pharmaceutical wholesaling. This allowed them to provide patients with information on pharmacies capable of dispensing medications according to their prescriptions. If medication delivery is difficult, platforms argue they have no choice but to venture into pharmaceutical wholesaling to secure data. Such services play a crucial role in alleviating the inconvenience of patients unnecessarily searching for pharmacies. As the reporter's experience shows, patients might receive consultations remotely but still face the inconvenience of traveling long distances to pick up medication.

The Ministry of Health and Welfare and the Health Insurance Review and Assessment Service have introduced a supplementary measure to prepare for the inability of platforms to operate pharmaceutical wholesale businesses. Since May, they have been providing platforms with weekly pharmacy-specific drug purchase and dispensing information via API connection. The government's stance is that platforms no longer need to operate pharmaceutical wholesalers with this measure. They stated in a press release that while the amount of information might not be sufficient initially, it will gradually increase. It remains debatable whether this measure will be an adequate alternative to offset the prohibition on telemedicine platforms operating wholesale businesses.

When telemedicine was first widely allowed in February 2020 due to the COVID-19 pandemic, anyone could receive medication delivery because it was a national emergency. At that time, all medications except those explicitly prohibited for telemedicine prescription could be delivered via courier or quick service.

Since the COVID-19 pandemic, telemedicine standards have changed complexly over time. Criteria such as who can receive telemedicine, whether initial consultations are possible, and whether medication delivery is available have varied with major developments like conflicts between doctors and the government, causing confusion. During the medical dispute in February 2024, telemedicine requirements were relaxed to ensure access to care. However, the allowance of initial telemedicine consultations during general weekday daytime hours is considered a critical factor significantly influencing the number of platform users.

As the COVID-19 situation eased from May 2023, medication delivery was again restricted, meaning only medically vulnerable groups such as people with disabilities, long-term care recipients, and residents of remote areas could receive it. This led to a situation where consultations were remote, but medication had to be picked up in person, significantly reducing telemedicine's efficiency. The reporter described experiencing inconvenience having to visit multiple pharmacies because of this. Telemedicine platforms expect the full allowance of medication delivery to significantly increase the currently low telemedicine utilization rate, which stands at only 0.2-0.3%.

Telemedicine platforms are focusing on increasing awareness of telemedicine and making it an everyday service through the full allowance of medication delivery. Some express concerns that medication delivery could exacerbate drug misuse issues. However, prescription of narcotics, psychotropic drugs, and emergency contraceptives is restricted for telemedicine. Furthermore, some view that current medication guidance at pharmacies is often perfunctory, making little difference whether it's remote or in-person. Pharmacist groups raise concerns about the negative business impact of medication delivery on issues like 'rights fees' and also express worries about public health.

Regarding the policy of fully allowing medication delivery, the Pharmacists' Association formed an emergency committee and vowed to resolutely resist by holding a rally in front of the Blue House. This suggests another intense conflict related to telemedicine is expected. Conversely, patient and consumer groups have actively advocated for medication delivery on the grounds of choice and convenience. Various organizations, including the Medical Sovereignty Patient Consumer Alliance, argue that medication delivery is essential for improving healthcare access for the elderly, chronic disease patients, and residents of remote areas, emphasizing that this movement stems from the actual needs of patients, not platform companies.

Even if the government promotes medication delivery and telemedicine is legalized, platforms have a fundamental reason not to be entirely pleased. The specific operational guidelines for telemedicine are established through an enforcement decree, and there is a strong possibility that this subordinate legislation will narrow the scope of eligible telemedicine patients. Currently, the government is reportedly discussing operating telemedicine primarily for follow-up patients rather than initial consultations, restricting initial consultations to medical institutions within the patient's local government, and reducing the number of prescription days or the range of permissible medications.

The essence of telemedicine is to eliminate physical barriers and improve access to healthcare. However, concerns are raised that operating primarily for follow-up patients or restricting telemedicine to medical institutions within the patient's residential local government could undermine this essence. For example, inconveniences could arise if one cannot use telemedicine in an emergency situation in another region. Additionally, discussions are underway to reduce the number of days for which medication can be prescribed via telemedicine to seven days or to narrow the range of eligible medications. These regulations could stifle the growth momentum of telemedicine platforms and ultimately hinder user convenience.