No revenue-share agreement with doctors, clarifies Thyrocare

Thyrocare Technologies' involvement with doctors is limited only to brand building and promotion exercises, clarified CMD A Velumani in an interview to CNBC-TV18. Velumani's clarification came after the Maharashtra Association of Resident Doctors (MARD) wrote a letter to the Maharashtra Medical Council (MMC) accusing the company of being involved in encouraging cut practice by paying doctors to recommend patients to their laboratories.

The company neither has any revenue share agreement with doctors nor does it pay them any commissions to send patients to their labs, Velumani said, adding, certain elements with mala fide intentions are making false accusations and misguiding MARD, Velumani said.

"70 percent of our collection partners are entrepreneurs having nothing to do with the medical business. We have a very clear cost break-up with no room for payments to doctors," he said.Below is the verbatim transcript of A Velumani’s interview with CNBC-TV18's Latha Venkatesh, Sonia Shenoy and Ekta Batra.Latha: You have given a response but this is a serious charge that MARD is making. What is your position?A: There has been a misunderstanding by the people who are in the market place. Our business operates on B2B. In fact in simple words or technically it is pre-analytical and analytical. In business words it can be told as procuring and processing. So, this is two jobs involved in this business. The amounts which have been segregated, one is for processing and another is for procuring.Now, procuring means we need to have a commercial enterprise which has its own office, its own infrastructure, its own cost, its own material cost, transportation cost for which we generally give Rs 200-300. Then he packs, sends it by air cargo to our laboratory. Our laboratory has not opened everywhere owned collection centres because it works out to be too costly. So, this amount which we have decided to give to our collection partners has been considered to be as if we are giving some amount to the doctors.Latha: But are your collection partners ever doctors or are they always other kind of franchises?A: 75 percent of them are entrepreneurs, nothing to do with medical business. Some of them are medical technicians, they run their own laboratory also and almost 10 percent of the pathologists who are also medical doctors happen to be our collection centres.Sonia: So, there is no revenue share or nothing at all given to doctors?A: Absolutely, zero. In fact I wonder this Rs 250 which is quoted here I am happy that it has gone to the general mass that it costs only Rs 250, that is the silver lining in the issue which has been bought up. But there comes Rs 100 for my testing charges and that is Rs 150 for the pre-analytical charges and absolutely there is no money actually available to even share.Latha: But you guys have been in existence for so long, do you know any reason why this has come up now?A: Until now all complaints were Thyrocare is charging too less, so it may not be doing the tests. Those things we managed because that happened at a lawyer level. Today we are a listed company, and we have become bit more aggressive in our Think Thyrocare Campaign. So, there are certain elements who probably wants to misguide Maharashtra Association of Resident Doctors (MARD). I have a reason to believe some people have written complaints, have sent something cut paste. In fact I have brought my letters which tells it is very an offer for laboratories. There has been no doctors. In fact we don\\'t directly deal with a doctor because we need only the specimen barcoded vial collected in our kit which comes to the laboratory.Latha: So, is MARD pointing to that 10 percent pathologists who are doctors?A: I think there has been some unhappy members in even our collection centres. If you notice it the objective of this letter I have put highest sealing which he can charge to the patient. This is an irritation now. Earlier people were charging Rs 600-800. I received complaints from well-wisher doctors, cant you control your collection centres not to charge more. I felt let us be democratic, we are now a listed company, we can\\'t afford to do anything which comes as a complaint and spoil the reputation. So, we said, you give me only Rs 100, you charge Rs 250, keep Rs 150. So, this is a very clear democratisation of the process and I don\\'t see anywhere to misunderstand.Sonia: But so far this is just an allegation, right? Have you received any communication from them at all?A: In fact I came to know about it much later. They could have very well asked me what is your stand. Even before writing to MCA, every association has some powers to reprimand people and I would have certainly given an input there but unfortunately I was not asked and I only came to know from news journalists that something is getting cooked up, then I gave my version very fast. Otherwise it would be a one sided story and I am happy it has come in, now I am happy that the entire country know that thyroid testing is only Rs 250, when I got in 1995 it was Rs 450. So, I am happy that it has come out but a positive note put in a negative tone is probably the worry for me.Ekta: I just wanted to know two things. Is there any structure that is provided to doctors in terms of an incentive, say for example you have a collection centre with a doctor, the doctor has the option of giving the patient an option, you can do Thyrocare test in my lab which has a collection centre or you can go out. Is that something that Thyrocare has and which is followed by other pathologists as well?A: Every pathologists has his own way of communicating to the doctor. I don\\'t think any pathologists will communicate in black and white I will give you a cut commission that too in a letter head, that too by a listed company. So, I have a reason to believe that the procurement of doctors is sometime emotional, sometimes scientific, reliability and sometimes even financial.Ekta: So, what is your str4ucture with doctors?A: We deal with our 30,000 collection centres across the country. There are local cultures, local doctors, local friendships. They have ten doctors. We generally don\\'t get into that space. For me what he is charging to the patient, I have defined. Now in that what he should take also is defined, what he should give me also is defined. My balance sheet is audited by the best firm in the world for my balance sheet. It is such a clear statement.Latha: You have no relation at all with doctors?A: We do send some magazines, brand building exercise. We don\\'t write to doctors that you recommend for us, however what they have done along with this letter we have mentioned something as a recommendation from the doctor. It does in no way mention anything beyond that.Ekta: Do you have collection centres with doctors?A: Good number of doctors have become collection centres because they don\\'t want their patient unnecessarily to go somewhere and pay too much.Latha: So, what do the doctors get?A: Then they are getting the same collection charges. This is for spending for the collection kit, running that small enterprise, employee cost, transportation cost to Bombay and downloading, everything there is a cost. Today you can\\'t run an enterprise as if free. And if by any chance everybody is willing to do it free I don\\'t need anything more than Rs 100. My transparency is very clear there.Ekta: There is no change in your business model which has taken place recently for this letter?A: This letter has been sent to make sure the collection centres don\\'t charge more than Rs 250 for Thyroid. My dream is worldwide patients should pay USD 5 and I should realise USD 2, they should use USD 3 for procuring and forwarding the specimen to me. This has been an objective even 20 years back. I have not increased my rate for 20 long years.Latha: Normally what is the procedure after the MARD writes to the Maharashtra council. They will invite you?A: I have no idea, because this is the first time. If they see that there is seriousness in it they will certainly call us, we will present our data to them. I don\\'t think there is anything truly - in fact I am wondering of all the people why Thyrocare which has been always called that this man cannot do test in such a low rate. Today I am seeing the other side, only maybe the listing is the event which takes me from that side to this side.