The drugmaker is accused of getting “a tad too cozy” with Korean regulators, inviting criticism from domestic drug makers and civic groups, according to The Korea Times.

The spat began earlier this month, when the Health Insurance Review and Assessment Service (HIRA) released the results of its economic feasibility assessment on cholesterol-lowering drugs, as part of a government efforts to lower drug costs. In particular, the HIRA and domestic drugmakers are at odds over the regulator’s moderate price reduction applied to Pfizer’s Lipitor.

Shin Young-keun, chief policy officer of the Korean Federation of Medical Groups for Health Rights, a civic alliance, tells the paper that the HIRA changed its pricing standards to benefit Pfizer and such favoritism has the same effect as handing over $17.3 million to $20.7 million in cash.

Shin, civic groups and local drugmakers claim the HIRA was originally going to adjust the price of Lipitor based on the average market price of generic simvastatin, which has the lowest price. But it suddenly based its pricing on the cost-effectiveness, which consequently upped Lipitor’s price. “It’s not fair for HIRA to apply different standards to local and foreign firms,” Shin says.

Pfizer says it was not officially informed of any decision, but stressed the claims aren’t reasonable. “Lipitor’s price was already slashed by 20 percent in September when generics were released, so that means our drug was already reduced once,” a Pfizer spokeswoman tells the paper. Government policy stipulates original drug prices get reduced by 20 percent when generics are released.

She stressed that Lipitor is still awaiting the Supreme Court’s decision on whether five local drugmakers breached its patent for the popular drug. The compound patent for Lipitor expired in May last year, but Pfizer claims that partial patents remain until 2013. Since generics hit the market this summer, Lipitor’s domestic market share sank by 20 percent, according to analysts, the paper writes.

Critics may be reacting strongly to the HIRA’s decisionl because regulators, including the Korea Food and Drug Administration, have been questioned on whether they were being fair to all the industries they watch. Last month, KFDA banned Daewoong Pharmaceutical from selling an obesity drug for six months because a campaign advertised specialized medical products, which goes against local rules.

A few weeks later, Pfizer was caught up in the same advertising controversy, when it carried out campaigns for Viagra that involved public participation.However, the KFDA wasn’t as quick to act as it did with Daewoong, saying that it must “investigate further.”

This immediately drew criticism from local firms, who claimed that Pfizer’s heavy lobbying of lawmakers and regulators is obvious through these results. “Local drugmakers lobby too, but the size and scale are incomparable with these global firms,” one exec at a domestic drugmaker, who asked not to be named, tells the paper.