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Pharma-Doctor Nexus Part I: Why rules, Code for doctors, drugmakers have failed to curb unethical practices

The Medical Council of India's (now Medical Commission of India's) rules for doctors and the Uniform Code of Pharmaceutical Marketing Practices have elaborate guidelines to curb such practices, but with no real statutory backing they remain on paper even as the patients suffer. 

September 20, 2022 / 07:01 PM IST
Representative image

Representative image

Much before the DOLO-650 controversy shocked the general public with astounding claims of Rs 1,000 crore freebies distributed to doctors, an expose had tried to uncover the murky world of nexus between pharma firms and doctors.

In late 2019, weeks before the COVID-19 pandemic hit, two Pune doctors brought out a detailed report on how pharma firms were gifting gifts and freebies worth several crores to doctors for prescribing their drugs, whether the patients needed it or not.

Titled 'Promotional Practices of the Pharmaceutical Industry and Implementation Status of Regulatory Codes Status in India', the 72-page report was packed with explosive claims of cars, sponsorship of national and international conferences, online shopping vouchers and even female companionship flowing freely from pharma firms to doctors in exchange of favourable prescriptions to patients.

The report by the physicians associated with the NGO Support for Advocacy and Training to Health Initiatives was based on in-depth interviews with 50 medical representatives (MRs) and area managers of pharma companies and doctors in six major cities across the country.

Though not the first systemic analysis on the subject, it was one of the latest and explored themes such as the “changing trends in promotions” and “new innovation of temptations”.


The report put a spotlight on the Code of ethics that the erstwhile regulator for doctors, the Medical Council of India (MCI), has laid down for doctors.

MCI's mandatory regulatory codes for medical practitioners (Professional Conduct, Etiquette and Ethics) Regulations, 2002, remain on paper with most doctors not just accepting freebies but even demanding them, the report said.

MCI has not been the only one seeking to instil a sense of ethics in the sector. Seven years back, the Department of Pharmaceuticals (DOP) under the Union Ministry of Chemicals and Fertilisers had brought out the Uniform Code of Pharmaceutical Marketing Practices (UCPMP), a voluntary set of guidelines to govern the conduct of drug makers and draw boundaries of their relationships with healthcare professionals.

It was expected to be adopted by all drugmakers.

However, the whistleblower report said the UCPMP was non-functional on the ground with most MRs, who interact with doctors on drug makers’ behalf, not even aware that such a Code existed.

Hardly 10 to 20 percent of doctors follow prescribed ethics, the report said, citing senior MRs.

Interestingly, instead of introspection, the report put the fraternity in a denial mode with various doctors’ bodies demanding action against the Pune whistleblowers.

The ‘live case’

The pandemic, which hit weeks after the report came out, only exacerbated the malpractices, some doctors and activists feel.

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In July this year, the Central Board of Direct Taxes (CBDT) made a sensational claim that freebies worth Rs 1,000 crore were distributed to doctors by Micro Labs, the maker of DOLO-650, a brand of paracetamol, a common medicine used in the treatment of fever and pain, for promoting its products. DOLO-650 was incidentally a go-to-medicine for the treatment of fever during Covid-19. The Bengaluru-based drugmaker, however, has vehemently denied the taxman's charges.

The CBDT claim has made its way into the submission filed by the Federation of Medical & Sales Representatives of India in the Supreme Court. The submission was given during the hearing of a case that the Federation is fighting in the apex court to get statutory backing for the UCPMP.

However, many inside and outside the industry, including those who say that the pharma-doctor nexus continues unabated, feel that the figure of Rs 1,000 crore for the promotion of DOLO-650 may have been exaggerated.

Yet, the significance of this case and the practices it places on record is not lost on anyone.

“Before this, we did not have a live case in which we could see how drug makers and their associations have operationalised the ethics committee under UCPMP and how they take decisions,” Malini Aisola of the All India Drug Action Network, a patient rights group, said, questioning the clean chit given by an industry body to the drug maker in the case.

“But now you can see that they are not taking it seriously. When something has blown up a little bit in the public eye, then they are forced to take it up but the exercise is a sham,” she said, adding that it reinforces the need for a mandatory rather than voluntary code for companies.

‘Clean chit’

The Indian Pharmaceutical Alliance (IPA), a group of research-based Indian drugmakers, after being urged by the National Pharmaceutical Pricing Authority under the DOP, carried out an internal investigation into the freebie charges involving DOLO 650 and Micro Labs.

“In view of interaction with the management of the company and the detailed reply, it is clear Rs 1,000 crore expenditure on single brand DOLO-650 on freebies in one year is not correct,” it said in its report to the NPPA recently.

Several crucial questions, however, remain unanswered.

“The IPA report shows that quite a substantial amount of money was spent on promotion and what needed to be thoroughly investigated is whether the promotion fell beyond ethical boundaries- for example, what sort of promotional activities had been undertaken?” asked Aisola.

She pointed out that all drug makers, every year, spend a hefty amount under the head of “Scientific and Academic Services”.

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“But the question to be raised is why would companies need to even have that kind of a scientific and academic promotion for a generic molecule that they have been selling for some 20-30 years?”

The IPA did not reply to queries by Moneycontrol on the issue. A query sent to the Organisation of Pharmaceutical Producers of India, a network of multi-national pharma firms in the country, remained unanswered.

Laws not on the same page?

While the government is aware of the practice, the rules are not uniform.

The (Professional Conduct, Etiquette and Ethics) Regulations, 2002, brought out by MCI made accepting gifts and freebies by pharma companies to doctors a punishable offence, which can lead to suspension of licence to practice medicine.

On the other hand, the UCPMP, which asks pharma companies to adhere to the self-regulation of not offering freebies to doctors, is voluntary.

The government, on its part, had tried to limit the gains made by pharma companies through such practices. Through tax amendments in the Finance Bill this year, it disallowed pharma firms from claiming the cost of various freebies and largesse offered to doctors as a business deduction from April 1.

Before that, in August 2012, the CBDT had asked doctors who accept gifts from drug companies to declare the equivalent value as taxable business income while companies to reveal such expenditure on doctors in their annual accounts.

But the companies had been claiming deductions on these costs on doctors as legitimate business expenses even though the tax officials had been denying these deductions in many instances.

This led to various litigations as pharma companies appealed against non-exemption from deductions.

The latest amendment introduced by the government aimed to clear the misinterpretation as it proposed to insert another explanation “expenditure incurred by an assessee for any purpose which is an offence or which is prohibited by law”.

The government stance

The government swears by the plethora of existing legislations it has to deal with the menace.

In response to a query in the parliament in July this year, the Centre had said that in addition to defining what entails freebies to doctors by pharma companies, the UCPMP also details the mode of operation of the code, responsibilities of the pharmaceutical associations in constituting the Ethics Committee for Pharmaceutical Marketing Practices for handling the complaints and Apex Ethics Committee for Pharmaceutical Marketing Practices (AECPMP) for review, the procedure of lodging a complaint, procedure of handling of complaints by the Pharmaceutical Associations and various penalty provisions.

“The Code is adopted by all the major associations of pharmaceutical companies,” said the DOP, adding that on various occasions, it has, on various instances, reviewed the implementation of the voluntary Code.

Besides UCPMP, there exists a sufficient and enforceable legal regime to counter, control and disincentivise unethical marketing practices such as ethical regulation for doctors, provisions available under Income Tax Act, Drugs and Cosmetics Act and Prevention of Corruption Act.

It also made it clear that there was no consideration of amending the Code or bringing a new law to stop the practice of offering freebies to doctors by drugmakers.

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Interestingly, the government has never released any information in public on how many complaints have been received for violations of the UCPMP or whether any company has ever been penalised under its provisions by pharma associations.

‘No need for new regulation’

The Indian Drug Manufacturers Association (IDMA), the biggest grouping of drugmakers, insisted that there already are regulations and guidelines in place to restrict the freebies and they clearly define the allowable practices and also state what is not allowed.

“IDMA was one of the first amongst the associations to have formed the Ethics committee and Apex committee under the UCPMP, showing our commitment to ethical practices,” IDMA president Viranchi Shah told Moneycontrol. “IDMA supports only ethical practices in marketing and will continue with its efforts”.

Contrary to the perception, we would like to highlight that the pharmaceutical industry is one of the most regulated industries, with elaborate regulations concerning research, development, manufacturing and marketing of medicines and any additional regulations may be counter-productive, and should be considered only after elaborate consultations, he added.

'One molecule, one price'

With the rot running deep, many are rooting for price regulation.

Many senior members of the Indian Medical Association (IMA), the largest network of doctors in India, for example, mince no words in saying that fulfilment of the group’s long pending demand of “One nation, one molecule, one brand, one price” was the need of the hour.

“We have been observing that so many molecules are sold under different brand names and prices by introducing marginal modifications, which is a tool for pharma companies to get out of price control,” said Dr Ravi Wankhedkar, former president of IMA.

He said that this one rule may also result in curbing spending of funds by pharma companies for sale promotions.

Transparency must

According to senior IMA member Dr R V Asokan, while any material gifts to doctors cannot be justified, it should be noted that most of such gifts are less expensive ones like a ball pen.

“We need to have a sense of proportion in this-- any gift which is large enough to incite a behavioural change should be deemed proscribed,” he said.

On the other hand, said Asokan, the gift of a text book —even an expensive one — should be considered appropriate.

A portion of Pharma profit, he said, should certainly be ploughed back for continuing medical education as this will contribute towards better patient care and a portion of CSR funds should flow to professional organisations for continued medical education and even research.

“All fund flow needs to be in the public domain and transparent,” said Asokan, adding that a fundamentalist Victorian approach will only benefit the industry and not the patients.

‘Replace the Code’

Dr Arun Gadre, a gynaecologist from Pune and one of the two writers of the 2019 report on the pharma-doctor nexus said that in India, even though there are a huge number of companies offering a number of brands for every molecule, there is nothing called a “price competition”.

If there is a proper supply-demand market, then the price of the product that is in high demand should be on the lower side. “But in the pharmaceutical industry, there is a market failure and product differentiations actually drive the competition.”

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Through product differentiation, companies come up with slight variations of the same product to set apart their brand from all the competitors and then they put in a lot of marketing muscle.

“So there is a problem of fundamentals and therefore the UCPMP needs to be replaced completely with a strong statutory instrument,” said Gadre, who is also a founding member of the Association of Doctors for Ethical Healthcare.

“A new law should be brought in such a way so as to cover all the inputs and provisions through which there can be direct and indirect payments to influence prescription by doctors,” he said.

Ultimate loser: the patient

With the Centre refusing to budge, much of what happens ahead depends on the ongoing case in the Supreme Court, but till the time a positive change happens, patients will have to keep paying the price.

Gadre’s report had highlighted that promotional practices by pharma companies led to the promotion of excessive, irrational drugs and pushed for high-cost brands.

It also found that several drugs were being promoted to even non–allopath or AYUSH (practitioners of traditional systems of medicine) doctors who were not allowed to practice modern medicine.

“This has led to prescribing non- indicated doses of antibiotics as well as less adherence of the doctors to prescribe a full dose of antibiotics,” said the report.

“This has serious implications for patients-- not only in terms of money but also for the quality of medicines, which are a risk to the life of the patient.”

Part 2 of the series will explore what drives the prescription of drugs in India.
Sumi Sukanya Dutta
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