Telemedicine Institutionalized, but Entry Barriers Rise for Startups

Mandatory Reporting, Certification, and Data Submission for Platform Operators
Possibility of "Doctor Now Prevention Act" Still Remains

Although the amendment to the Medical Service Act, which provides a legal basis for telemedicine, has passed the plenary session, the platform industry is unable to fully welcome the development. While institutionalization has reduced business uncertainty, new obligations such as certification and data submission have been imposed, raising concerns among startups that entry barriers have actually increased.

According to the industry on December 4, the recently passed amendment to the Medical Service Act requires businesses wishing to operate telemedicine platforms to register with the Ministry of Health and Welfare, and mandates a certification process for those above a certain size. The amendment also includes a regulation requiring the submission of user statistics and data every quarter.

The industry believes that these layers of regulation will place a greater burden on new entrants. Lee Seul, Co-Chairman of the Remote Medical Industry Council (Wonsanhyup), said, "Operators already in the market will somehow be able to obtain certification, but it will be difficult for latecomers to enter. It seems the direction is to allow only a minimum number of verified operators to provide services, rather than growing the market through competition among various platforms."

The industry is also concerned that, along with platform regulations, the overall scope of telemedicine services could be excessively restricted. Initially, there was discussion of a complete ban on first-time consultations; however, the amendment now allows initial consultations if the hospital or clinic and the patient are in the same region, with conditions limiting the types of prescribed drugs and the number of days prescribed.

According to the Remote Medical Industry Council, from 2020 to September this year, there were 7.72 million cases mediated through telemedicine platforms, with 99% of these occurring at clinics and focusing on mild or chronic diseases. The industry believes that, since platforms have helped improve access to medical care, it is more important to create conditions for service expansion rather than impose additional regulations.

Meanwhile, attention is also focused on whether the so-called "Doctor Now Prevention Act," an amendment to the Pharmaceutical Affairs Act, will be passed. This bill, which prohibits telemedicine platforms from operating pharmaceutical wholesale businesses, was not put to a vote in the plenary session on December 2 due to opposition from some lawmakers who argue that it "hinders innovation." However, there is still a possibility it will be addressed on December 9.

The Korea Venture Business Association and Korea Startup Forum strongly objected immediately after the bill passed the standing committee, stating, "Retroactively criminalizing innovations that have been attempted to enhance public convenience brings to mind the Tada incident." They explained that after the Tada Ban Act was implemented four years ago, domestic services contracted while only overseas operators grew.

There are also concerns that the gap with overseas markets is widening. Major countries such as the United States and Japan are already broadly permitting telemedicine and drug delivery, fostering the digital healthcare industry. Market research firm MarketsandMarkets forecasts that the global telemedicine market will expand from $613 billion in 2021 to $3.424 trillion by 2028.

An industry official commented, "Just because telemedicine has been legalized does not mean the regulatory phase is over. If regulations such as the Pharmaceutical Affairs Act continue to be strengthened, the growth engine of the digital healthcare industry could be weakened."

This content was produced with the assistance of AI translation services.