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Micro Labs gets clean chit from pharma body on allegations of spending Rs 1,000 crore on Dolo 650

The company hasn't distributed freebies as claimed by tax authorities, Jayaraj Govindaraju, Executive Vice President Marketing and Communication, told Moneycontrol

September 10, 2022 / 08:52 PM IST
Dolo 650

Dolo 650

The Indian Pharmaceutical Alliance (IPA) on September 10 said that allegations by the Central Bureau of Direct Taxes (CBDT) against Micro Labs for spending Rs 1,000 crore on single brand Dolo 650 paracetamol tablets for freebies distribution in one year is not correct.

The group, representing major pharmaceutical companies of the country, said it examined the matter after the National Pharmaceutical Pricing Authority (NPPA) shared news articles on “PIL filed by the Federation of Medical and Sales Representatives Association of India, stating that Dolo had invested 1,000 crores (Rs) in freebies to have its anti-fever drug prescribed to patients”.

ALSO READ: 'Baseless, exaggerated figure': Dolo 650 makers on allegation of distributing freebies worth Rs 1,000 crore

The IPA's Ethics Committee for Pharma Marketing Practices (ECPMP) 2 examined the matter.

"In view of interaction with the management of the company and the detailed reply, it is clear Rs 1000 crore expenditure on single brand Dolo 650 on freebies in one year is not correct," IPA said in a document on the decision in matter of violation of Uniform Code of Pharmaceutical Marketing Practices by Micro Labs.

The CBDT after raiding the firm had claimed that the pharma group had adopted unethical practices to promote its products/ brands. The quantum of such freebies detected is estimated to be around Rs 1,000 crore.

"As far as the CBDT allegation regarding violation of tax provisions against the respondent company, the committee and the Indian Pharmaceutical Alliance, association of Indian pharmaceutical companies, has neither the mandate nor the resources to investigate into such matter," the IPA said.

Micro Labs, meanwhile, has said that the company is happy to get the validation from the IPA.

"We are happy to note the observation from IPA, which is a third party. The company hasn't distributed freebies as claimed," Jayaraj Govindaraju, Executive Vice President Marketing and Communication told Moneycontrol.

The matter of the alleged expenditure of Rs 1,000 crore had reached Supreme Court last month.

The Supreme Court Bench was hearing a plea seeking direction to Centre to give the UCMCP (Code) statutory basis and make it effective by ensuring monitoring mechanism, transparency, accountability as well as consequences of violations.

The Supreme Court had directed the Central government; which was represented by Additional Solicitor General KM Natraj, to file a reply within 10 days regarding the claim made by Medical Representative body on Dolo 650 and the PIL seeking directions to make pharmaceutical companies liable for giving freebies to doctors as an incentive to prescribe their drugs.
Ayushman Kumar Covers health and pharma for MoneyControl.
first published: Sep 10, 2022 08:52 pm