Unclear intentions

Prime Minister Modi’s stance on unethical marketing practices by pharma companies sends mixed signals given government reluctance to institute uniform code for the same

As per reports, the Prime Minister, in a meeting with the pharma giants, Zydus Cadila, Torrent, Sun Pharma and Wockhardt has warned that they should strictly adhere to ethical marketing practices and not bribe doctors. The Indian Pharmaceutical Alliance (IPA) has however, denied any such discussion; "The meeting was called to discuss the future roadmap for the growth of the healthcare industry. The focus of discussion was on research and development; building an innovation ecosystem; improving access to high-quality medicine and strengthening the global competitiveness of the industry," said a press statement issued by the IPA.

The Uniform Code of Pharmaceutical Marketing Practices (UCPMP) prohibits pharmaceutical companies from offering freebies to the doctors with an aim of getting business from them through prescription of their products. The Indian Medical Council (Professional Conduct, Etiquette & Ethics) Regulations, 2002 also asks the doctors to adhere to ethics and not accept freebies from the pharmaceutical companies. This practice adds to the price of drugs and ultimately taxes the pocket of poor patients who are already overburdened by the out of pocket expenditure on health.

It is well known that the pharma companies (now even the corporate hospitals) sponsor nearly all the medical conferences or CMEs. They pay for the expenses including travel, accommodation and event registration fees for the participants.

The UCPMP has been in vogue since December 2014. When it was framed, it was said that it would be voluntary for six months and then reviewed after the inputs received. Several representations were given to the government by the Alliance of Doctors for Ethical Healthcare (ADEH) and Indian Doctors for Peace and Development (IDPD) to make it mandatory but the government has not taken any steps and it remains voluntary even after more than five years. The Punjab Medical Council too was seized with the issue at one time and had given representations to the government in this regard but to no effect.

The Medical Council of India, (MCI) in its meeting on February 18, 2014, exempted the "Professional Association of Doctors" from the purview of the Indian Medical Council (Professional Conduct, Etiquette & Ethics) Regulations, 2002. This gave an alibi to the pharma companies to pass on money to the medical associations for various expenditure which has been used for the benefit to the members in form of travel, accommodation, registration, etc., to attend the meetings, conferences and CMEs organised by the associations. However, according to clause 7.2 of the UCPMP, "companies or their associations/representatives shall not extend any hospitality like hotel accommodation to healthcare practitioners and their family members under any pretext". The implied meaning of this is that extending benefits to the doctors through associations too is not permissible. It would be naïve to expect from the companies to implement the code voluntarily. Global experience is also the same. The only way is to make UCPMP mandatory.

Through its circular No. 5/2012 [F. No. 225/142/2012-ITA.II], dated 1-8-2012, the Central Board of Direct Taxes (CBDT) had taken away the exemption to the pharma companies on expenditure incurred on freebies. It also said that "the sum equivalent to the value of freebies enjoyed by the aforesaid medical practitioner or professional associations is also taxable as business income or income from other sources as the case may be depending on the facts of each case." But this decision was reversed by the Pune bench of the Income Tax Appellate Tribunal.

Thus, the issue involves making the UCPMP mandatory, reverse the decision of the MCI exempting the doctors' associations from the code of medical ethics and also imposing the no tax emption on pharma companies as well as the doctors and their associations for the freebies.

The government's stance from the media reports sounds encouraging. But the denial by the IPA of any such thing creates doubts because the PMO has not commented on this statement of the IPA. The PMO must clarify its position over the denial by the IPA of any warning from the Prime Minister. It remains to be seen whether the UCPMP becomes reality. The scepticism arises from the fact that the Prime Minister's Madison Square event in 2014 which has been estimated to have cost USD 1.5 million was sponsored mainly by the pharmaceutical giant Sun Pharma.

Views expressed are strictly personal

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