South Korea’s startup ecosystem faces another defining test. The newly passed “Doctor Now Prevention Bill” revives memories of the TADA controversy, exposing a growing tension between innovation and regulation. As Seoul champions a “Third Venture Boom” to attract global investment, this legislative move is forcing founders and policymakers alike to confront how far Korea is truly willing to go to protect innovation.

The Controversy Reflects a Familiar Pattern in Korea’s Startup Landscape

The passage of the so-called “Doctor Now Prevention Bill” by the National Assembly’s Health and Welfare Committee has sparked sharp backlash from Korea’s startup ecosystem.

The bill, led by Democratic Party lawmaker Kim Yoon, amends the Pharmaceutical Affairs Act to prohibit telemedicine platforms from obtaining pharmaceutical wholesale licenses.

From the general perspective, this amendment might seem like a prevention against unfair trade and preserve order in drug distribution. However, many within the startup community argue it represents a broader setback for innovation—drawing direct comparisons to the 2020 “TADA Ban Law” that effectively outlawed Korea’s first major ride-sharing service.

Telemedicine’s Attempt at Practical Innovation

The dispute began with Doctor Now, a telemedicine startup that launched its licensed wholesaler, Bejin Pharm, in 2024. The company sought to resolve what patients called the “pharmacy ping-pong” problem—having to visit multiple pharmacies after online consultations to find prescribed medicines.

By supplying pharmacies with standardized drug packages and publishing real-time inventory data, Doctor Now allowed patients to identify where their prescriptions were available before visiting. The model offered transparency and convenience in a traditionally fragmented market.

However, lawmakers and the Korean Pharmaceutical Association accused the company of creating a “rebate-like structure” and leveraging platform dominance to favor specific pharmacies. Doctor Now denied the claims, stating that all listings were displayed on a map-based interface without preferential treatment.

Government agencies, including the Ministry of Health and Welfare and the Fair Trade Commission, had previously determined that Doctor Now’s operations did not violate existing laws. Relying on these assessments, the startup continued expanding until the new bill reclassified its model as illegal.

Regulatory Uncertainty Threatens Ecosystem Credibility

The Korea Startup Forum (KOSPO) and the Korea Venture Business Association (KOVA) condemned the legislation as a form of “preemptive regulation,” warning that it undermines Korea’s credibility as a startup nation.

KOSPO stated in the press release,

“This bill bans a lawfully approved business based only on potential concerns. If this logic stands, no startup can trust the government’s guidance.”

KOVA added that “issues like rebates or unfair inducement are already regulated under existing laws,” calling the bill a “textbook case of over-legislation.”

Both organizations argue the law sets a dangerous precedent—one where innovation can be retroactively criminalized despite prior government approval.

The Recurring Conflict Between Vested Interests and New Platforms

The controversy mirrors a recurring structural tension in Korea’s digital economy: established professional guilds resisting platform disruption. Similar pushbacks have targeted LawTalk (legaltech), Samjeomsam (3o3) (tax platform), and Gangnam Unni (medical beauty platform). Each faced restrictive amendments from lawmakers aligned with traditional associations.

KOSPO noted that these patterns reflect a “policy design that prioritizes legacy industries’ interests at the expense of transparency and consumer welfare.” The Doctor Now case follows the same trajectory—innovation constrained by collective resistance from vested interests.

Doctor Now Prevention Bill: Policy Rhetoric vs. Implementation Reality

The backlash also reveals an uncomfortable contradiction between Korea’s policy rhetoric and its implementation.

The government has constantly promoted its ambition for “Third Venture Boom,” advocating negative regulation and innovation-led growth. Yet, the Doctor Now bill signals the opposite direction.

KOVA emphasized,

“This bill is a representative case of legislative overreach that bans a legally authorized business based solely on the notion that something ‘could possibly happen’.
Concerns such as rebates, collusion, or patient solicitation are already subject to regulation under the Pharmaceutical Affairs Act, the Fair Trade Act, and the Medical Service Act.”

Doctor Now likewise warned,

“We have trusted the government’s prior judgment and have improved and expanded our business within the legal boundaries. But restricting the same matter later through new legislation undermines policy consistency and erodes market trust in government decisions.”

This inconsistency raises serious questions about Korea’s ability to sustain its global credibility as a venture-friendly environment. Foreign investors and founders observing the pattern may view it as evidence of policy volatility.

A Missing Voice: The Patient’s Perspective

While policymakers and associations dominate the debate, the voices of patients—the actual users—remain largely absent. Objective data quantifying how Doctor Now’s service affected prescription accessibility or pharmacy operations has yet to be disclosed.

The Korean Pharmaceutical Association insists that telemedicine must prioritize safety over convenience, warning that platform incentives such as “instant consultation” or “lowest cost prescriptions” could lead to excessive or careless medication use.

In contrast, startup representatives argue that restricting digital access only burdens patients, particularly in rural areas or for those with mobility limitations.

Implications for Korea’s Startup & Innovation Future

The “Doctor Now Prevention Bill” reflects a deeper policy divide between innovation and protectionism, testing the balance between public safety, market fairness, and entrepreneurial freedom.

If the bill passes the National Assembly’s plenary vote, its consequences will extend beyond healthcare. It may discourage founders in other emerging sectors—from fintech to AI healthcare—from pursuing new business models out of fear that legal interpretation could shift retroactively.

KOSPO urged lawmakers to “reexamine the bill with balance and fairness, ensuring that startups can contribute to both national competitiveness and public benefit.”

The final decision will signal whether Korea can evolve its regulatory mindset to support innovation—or whether it remains trapped in a pattern of reactive legislation that repeats the lessons of TADA.

Doctor Now Prevention Bill & Korea’s Innovation Crossroads

Korea stands at a decisive moment in its innovation trajectory. The Doctor Now Prevention Bill has reignited a long-standing debate over how the nation reconciles its ambitious startup vision with the realities of sectoral lobbying and regulatory caution.

If Korea’s policymakers aim to attract global venture attention, consistency, predictability, and evidence-based policymaking must prevail over reactionary regulation. The outcome of this bill will show whether the country’s “Third Venture Boom” is driven by conviction—or constrained by contradiction.

– Stay Ahead in Korea’s Startup Scene –
Get real-time insights, funding updates, and policy shifts shaping Korea’s innovation ecosystem.
➡️ Follow KoreaTechDesk on LinkedIn, X (Twitter), Threads, Bluesky, Telegram, Facebook, and WhatsApp Channel.