By Dr Arun Mitra
The Supreme Court’s order, following a hearing on a Public Interest Litigation (PIL) filed by the Federation of Medical and Sales Representatives Association of India concerning unethical marketing practices in healthcare, is a welcome step. The Court has asked the Union government to constitute a panel to examine measures to curb the practice of pharmaceutical companies offering freebies to doctors. The committee will consider representations and recommend measures to address unethical drug promotion practices, including the provision of gifts and other benefits to medical professionals.
Several concerned organisations of healthcare professionals and civil society have repeatedly raised their voices against the government’s failure to effectively regulate pharmaceutical marketing practices. It is well known that pharmaceutical companies spend enormous amounts of money promoting their products. A substantial portion of this expenditure goes towards organising medical conferences, often on a lavish scale, in the name of Continuing Medical Education (CME). Such expenditure ultimately adds to the cost of medicines and increases patients’ out-of-pocket healthcare expenses.
On 12 December 2014, the government introduced the Uniform Code of Pharmaceutical Marketing Practices (UCPMP). A letter issued by the Department of Pharmaceuticals, Ministry of Chemicals and Fertilizers, on the same date stated that the code would remain voluntary for six months, effective from 1 January 2015, after which it would be reviewed. Predictably, making the code voluntary failed to produce any noticeable results.
Acknowledging this failure, the then Union Minister for Chemicals and Fertilizers, Shri H. N. Ananth Kumar, stated in the Rajya Sabha in June 2016 that the voluntary code introduced in 2015 had not yielded the desired results. He indicated that the government would make it mandatory, as pharmaceutical companies had taken no tangible steps towards its effective implementation. Clauses 6 and 7 of the code prohibit pharmaceutical companies from offering freebies to medical professionals. The Indian Medical Council (Professional Conduct, Etiquette and Ethics) Regulations also prohibit doctors from accepting financial benefits in any form, including those linked to attending educational programmes. Furthermore, the Central Board of Direct Taxes (CBDT), in its order dated 1 August 2012, had clarified that such expenditure incurred by pharmaceutical companies would not qualify for tax deductions.
The UCPMP also stipulates that pharmaceutical companies must follow prescribed procedures laid down by the competent authority when engaging doctors in research projects. However, companies have reportedly used doctors’ names, professional credentials and photographs in their promotional literature, a practice prohibited under the code.
Ironically, in September 2020, the then Union Minister for Chemicals and Fertilizers, D. V. Sadananda Gowda, stated in Parliament that the Union government had no plans to make the UCPMP mandatory. He made this statement in response to a question raised in the Lok Sabha by K. Muraleedharan, Congress MP from Kerala. This reversal of the government’s earlier position was deeply disappointing.
The government’s retreat from its commitment to make the UCPMP mandatory raises serious questions about its willingness to regulate pharmaceutical companies effectively. It also gives rise to concerns about the undue influence of commercial interests on policymaking. When a delegation of the Alliance of Doctors for Ethical Healthcare, including office-bearers of Indian Doctors for Peace and Development (IDPD), submitted its views to the National Pharmaceutical Pricing Authority (NPPA), they were informed that the NPPA had no jurisdiction to regulate these practices and that that the necessary changes would have to be made at the ministerial level through amendments to the relevant laws.
The high cost of medicines has serious implications for the health and economic security of our population. Nearly 67% of out-of-pocket healthcare expenditure in India is spent on medicines. According to the National Health Policy, 2017, high out-of-pocket healthcare expenditure pushes approximately 6.3 crore people below the poverty line every year. Despite this alarming situation, the government has failed to take meaningful steps to curb excessive trade margins on medicines and medical devices.
On 16 September 2015, a committee was constituted to examine high trade margins in the sale of drugs. The committee took serious note of the excessive margins prevailing in the pharmaceutical market and pointed out that, in some cases, trade margins were as high as 5,000%. It submitted its report on 9th December 2015. Yet, nearly eleven years later, the government has failed to take effective action on its recommendations. Such prolonged inaction is unacceptable when the affordability of medicines is at stake.
Drug prices should be determined on the basis of the actual costs of production, with reasonable and transparent margins. The prevailing market-based pricing approach, which calculates prices by taking the average of the prices of leading or highest-selling brands, is fundamentally flawed. Rather than ensuring affordability, this approach risks perpetuating high prices and protecting commercial interests at the expense of patients.
It is worth recalling the vision of our first Prime Minister, Jawaharlal Nehru, who recognised the potential for exploitation in a pharmaceutical industry driven primarily by private profit. He therefore took the initiative to develop public-sector drug manufacturing with the objective of producing essential medicines at affordable prices. While inaugurating Indian Drugs and Pharmaceuticals Limited (IDPL) in 1961, he stated: “The drug industry must be in the public sector….. I think an industry of the nature of the drug industry should not be in the private sector anyhow. There are far too much exploitation of the public in this industry”.
In keeping with this vision, IDPL was incorporated in April 1961. Its principal objectives were to achieve self-sufficiency in essential life-saving medicines, reduce the country’s dependence on imports and ensure that millions of people could access medicines at affordable prices. The guiding principle was to provide medicines to the millions, rather than make millions from medicines. IDPL played a pioneering role in developing India’s pharmaceutical manufacturing infrastructure and made significant contributions to strategic national health programmes.
It is, therefore, imperative to undertake a fundamental review of the government’s policy of promoting private-sector dominance in the pharmaceutical industry. Medicines are essential to life and health, and their production and distribution cannot be left primarily to the dictates of profit. As an immediate measure, the government must make the UCPMP mandatory, establish effective mechanisms to curb unethical pharmaceutical marketing, regulate excessive trade margins and introduce a transparent, cost-based system of drug pricing. Strengthening public-sector pharmaceutical manufacturing must form an integral part of this reform.
Ensuring affordable access to medicines is a public health responsibility, not a privilege determined by purchasing power. The pharmaceutical sector must be reoriented towards public welfare, with patients’ health and well-being taking precedence over corporate profits. (IPA Service)
