A day after it was alleged that Bengaluru-based Micro Labs was distributing Rs 1,000 crore worth freebies to doctors for prescribing Dolo-650 tablets during COVID, the company's marketing VP told Moneycontrol in an exclusive conversation that the allegations were baseless.
Jayaraj Govindaraju, Executive Vice President Marketing and Communication told MoneyControl that the Rs 1,000 crore figure being attributed to the company is a highly exaggerated one.
"Distributing Rs 1,000 crore worth freebies to doctors for prescribing dosage of 650mg during COVID is absolutely baseless charge and is 100 percent wrong," said Govindaraju.
He further said that the Income Tax sleuths have collated the total marketing expenditure from all divisions of the company for the past several years to arrive at a Rs 1,000-crore figure.
"We got Rs 350-crore turnover during COVID year. It is impossible for a company to spend Rs 1,000 crore to reach Rs 350-crore target. There was price control on Dolo-650, we have a very small margins, how could we spend that amount on this product," he added.
When asked about the matter of Dolo650 reaching Supreme Court, Govindaraju said that the top executives of Micro Labs are meeting on this matter.
"If an explanation is sought from us, we will give that. We will co-operate in all possible way," he added.
Govindaraju rebuked the charge that the dosage beyond 500mg of Dolo can be priced at the will of the manufacturer.
"It is being said that market price of DOLO upto 500mg is regulated, however the dosage beyond 500mg can be priced at the will of the manufacturer. This is incorrect, Dolo 650 is also under price control," he added.
He further said that Dolo 650 was suggested in ICMR protocol as a first line treatment, and drugs like Vitamin C and Zinc too saw massive surge during COVID.
He further said that the company didn't provide any freebie to doctors for prescribing the drug.
"We sent regular samples and pads and some fever related books to doctors. We have a field force of 600 people," he added.
Govindaraju said that the spike in sale of Dolo650 was not a COVID phenomenon, during chikungunya also they witnessed a surge, and even during dengue outbreak, the sales went up.
"It has been in the public memory and it stood out during COVID. I can tell you with certainty that we didn’t spend Rs. 1000 crore during COVID to make this brand what it is now," he said.
The response from Dolo-650 makers comes a day after the Federation of Medical and Sales Representatives Association of India informed the Supreme Court that the Central Board for Direct Taxes has accused pharma companies of distributing Rs. 1000 crore worth freebies to doctors for prescribing dosage of 650mg.
The Supreme Court Bench was hearing a plea seeking direction to Centre to give the Uniform Code of Pharmaceutical Marketing Practices (Code) statutory basis and make it effective by ensuring monitoring mechanism, transparency, accountability as well as consequences of violations.
The Supreme Court has 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 incentive to prescribe their drugs.
The income tax department carried out search and seizure operation in around 36 premises of Micro Labs spread across nine states July 6.
“The evidence indicates that the group has adopted unethical practices to promote its products/ brands. The quantum of such freebies detected is estimated to be around Rs. 1000 crore,” the the Central Board of Direct Taxes (CBDT) said in a statement.
The CBDT also said that the Income Tax department seized “unaccounted” cash of Rs 1.20 crore and gold and diamond jewellery of Rs 1.40 crore.
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