Home Opinion Regulation to end unethical marketing practices of pharma hanging fire for 10 years

Regulation to end unethical marketing practices of pharma hanging fire for 10 years

Government dithering on regulating marketing practices of pharma companies has meant that while doctors can be penalised for taking a bribe or freebie, the bribe giver, the pharma companies, will go scot free.

by News Desk
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Here is a timeline tracing the various attempts to curb unethical marketing of pharmaceutical products:

1981– International Federation of Pharmaceutical Manufacturers & Associations’ (IFPMA), of which many MNCs in India are members, draws up the Code of Practice on ethical marketing/promotion of drugs, a voluntary code for self-regulation. It has been revised at least six times since

1988- World Health Organisation (WHO) recommends “Ethical criteria for medicinal drug promotion”

1998– Organisation of Pharmaceutical Producers of India (OPPI), which primarily represents multinationals, introduces a Code on Pharmaceutical Marketing Practices in line with the IFPMA guidelines

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2006 – OPPI moves to draft an ethical marketing code for pharmaceutical products and invites other pharma associations including the Indian Drug Manufacturers’ Association (IDMA) to join them

Sep 2009 – Govt decides to allow pharma companies to self-regulate. Industry associations including IDMA and OPPI come together at Department of Pharmaceuticals (DoP’s) behest to prepare a uniform code of marketing conduct

Dec 10, 2009– Medical Council of India (MCI) amends the Ethics Regulations, 2002 to specifically prohibit doctors and their professional associations from taking any consideration from pharma companies in the nature of gifts, travel facilities, hospitality, cash or monetary grants

Jun 2, 2011– DoP releases a 16-page draft Code of Marketing Practices for the pharma industry with detailed redressal process to be put in place by companies to handle complaints of unethical practices. It was a voluntary code to be reviewed after six months.

Aug 1, 2012 – Central Board of Direct Taxes (CBDT) issues a circular stating that expenses incurred on freebies to doctors are inadmissible as business expenses for tax exemption

Aug 9, 2012– Minister of state for Chemicals and Fertilisers told Lok Sabha: “Keeping in view the seriousness of the allegations made in the media reports, this Department felt the need to take up the matter in the interest of the consumers/patients as such promotional expenses being extended to doctors had direct implications on the pricing of drugs and its affordability.

After discussing the issues with the Pharma Associations/Industry, this Department has prepared a draft ‘Uniform Code of Pharmaceutical Marketing Practices’ (UCPMP) which is to be adopted voluntarily in the first instance.” He said comments from all stakeholders had been received on the draft UCPMP and that it was being finalised.

Feb 2013– OPPI wish list to finance minister for union budget 2013-14 asks for CBDT circular of 2012 to be kept in abeyance

Dec 12, 2014– Govt notifies Uniform Code for Pharmaceuticals Marketing Practices (UCPMP) for voluntary compliance by industry for six months starting Jan 1, 2015

Mar 20, 2015– CAG tables report on Performance Audit on Assessment of Assessees in Pharmaceuticals Sector. Report finds 36 cases involving tax effect of Rs 55.10 crore in seven states where expenditure towards gifts/freebies to medical professionals was allowed despite being prohibited by law (period from 2010-11 to 2013-14 and up to the date of audit (September 2014)

Jul 2015– Voluntary UCPMP extended for two months up to August 31, 2015.

Sep 29 2015 – “A voluntary code has been in place for the last few months. However, we found it very difficult to enforce it as a voluntary code. Hence, the government is planning to make it compulsory,” says VK Subburaj, secretary of DoP

Sep 2015– Voluntary UCPMP extended till end 2015

Dec 2015– Voluntary UCPMP extended till March 2016 ostensibly to get time to convert it into a mandatory code with teeth

Feb 2016– Code of conduct for doctors’ section 6.8 dealing with “Code of conduct for doctors in their relationship with pharmaceutical and allied health sector industry” amended to delete the words “and professional association of doctors”. This means that while individual doctors cannot take freebies, an association of doctors can do so

Mar 2016– Voluntary code extended for 3 more months

Mar 15, 2016– Minister of state for chemicals and fertilisers Hansraj Gangaram Ahir in a written reply to a question in the Lok Sabha says: “…code (UCPMP) was reviewed and it has now been decided to make it statutory. Once the code is made statutory it is expected that the unethical practices could be controlled more effectively.

May 10, 2016– Minister of Chemicals and Fertilisers Ananth Kumar tells Lok Sabha: “UCPMP was to be adopted voluntarily w.e.f. 1st January, 2015 for a period of six months and has last been extended upto 30.06.2016. After reviewing the same it was found that the voluntary code was not working as expected”.

Jun 2016 – Voluntary code indefinitely extended

Jul 28, 2017– Chemical and Fertilisers minister, Ananth Kumar, tells Rajya Sabha: “It (UCPMP) is at present voluntary till such time that a mandatory code comes into effect. Government is pursuing the implementation of this code by the Pharmaceutical industry and in parallel, the Government has also taken steps to make this code mandatory.”

Sept 2016 – DoP claims that the delay in the mandatory code is because, instead of merely making the toothless voluntary code mandatory, it is reworking the code to include penal provisions.

Jul 2017- The draft Essential Commodities (Control of Unethical Practices in Marketing of Drugs) Order 2017 is sent by the pharmaceuticals department to the law ministry for final clearance. All complaints on violations are to be looked into by “an officer not below the rank of joint secretary” appointed by the government as the ethics compliance officer

Jan 8, 2019– Minister of state for health and family welfare states in the Rajya Sabha that with the voluntary adoption of UCPMP, it was expected that drug promotion was done within ethical boundaries and added that “no instance of unsuccessful implementation of UCPMP by pharma associations/companies have been noticed by Department of Pharmaceuticals”

July 22, 2020– Income Tax Apellate Tribunal (ITAT) Mumbai holds that there is no justification to deny drug companies deductions of expenses incurred on providing freebies to doctors on the basis of the CBDT circular

Sep 18, 2020– Chemical and Fertilisers Minister DV Sadananda Gowda tells the Rajya Sabha that the government had not decided to make UCPMP mandatory. He adds that UCPMP being voluntary, there is no provision for DoP to directly deal with complaints received. He says complaints are to be handled by the Ethical Committee for Pharma Marketing Practices in each pharmaceutical association.

Feb 23, 2022– Supreme Court upholds CBDT circular, rules against tax exemption on freebies given by drug companies to doctors

Mar 2022– Federation of Medical and Sales Representatives’ Associations of India (FMRAI) petitions the Supreme Court seeking establishment of a Statutory Code of ethical marketing for the pharma industry with provisions for penal actions against violators. SC admits petition, issues notices to govt.

Sep 12, 2022– High level committee chaired by Niti Aayog member (health) Dr VK Paul constituted to consider various issues of UCPMP and to examine the requirement for a legally enforceable mechanism for regulating marketing practices by pharma companies. Mandated to submit report within 90 days.

The earlier attempt to draft a legislation was turned down by the law ministry for not being legally sound under the Essential Commodities Act. The DoP made no further attempt to develop a legally binding instrument.

Government dithering on regulating marketing practices of pharma companies has meant that while doctors can be penalised for taking a bribe or freebie, the bribe giver, the pharma companies, will go scot free.

Meanwhile, even the ethics code for doctors has been diluted by removing the words “doctors associations” from the code, thus making it possible for pharma companies to fund medical associations. Under the Societies Registration Act, it takes just seven people to form an association. Thus, what is barred for an individual doctor can be done if seven or more of them get together to form an association. In effect, neither the ethics code for doctors nor the voluntary UCPMP have had much impact on the practice of pharma bribing doctors to influence prescriptions.

As for the CBDT circular of 2012, it has been contested by many pharma companies, who got several favourable orders from income tax tribunals. Finally, in February this year, ten years after the original circular was issued, the Supreme Court upheld the CBDT circular and said there would be no tax exemption on expenses incurred by drug companies on giving freebies to doctors.

Rema Nagarajan

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