Govt forms committee to review marketing practices of pharma companies

“This panel will recommend to Mansukh Mandviya, the minister of both health and family welfare and chemicals and fertilizers, how all the codes, rules, and regulations pertaining to pharma malpractices can be harmonized as these are under different heads currently,” said a senior central government official aware of the matter, requesting anonymity.

The Centre has formed a high-level committee to review marketing practices of pharmaceutical companies in the country, according to people familiar with the matter, who added that the committee will also look at recommending legally enforceable measures against firms indulging in malpractices.

The Centre has formed a high-level committee to review marketing practices of pharmaceutical companies in the country. (Shutterstock)

“This panel will recommend to Mansukh Mandviya, the minister of both health and family welfare and chemicals and fertilizers, how all the codes, rules, and regulations pertaining to pharma malpractices can be harmonized as these are under different heads currently,” said a senior central government official aware of the matter, requesting anonymity.

“And not just harmonizing but more importantly how these become legally enforceable,” this person added.

It was the minister’s idea to create the high-level committee after reports that some pharma companies were spending exorbitant amounts on promotion and publicity of drugs, with the latest allegation around the marketing budget of anti-fever medicine Dolo 650mg that enjoyed record sales during the second wave of Covid-19 pandemic.

To be sure, some of those reports put forth highly inflated numbers -- in Dolo’s case, exceeding the company’s revenue for instance -- for marketing and publicity spends. But the minister asked for reviewing marketing practices of pharma companies in general. Many analysts say this is required.

The five-member committee that was constituted on September 12, is chaired by VK Paul, member (health), NITI Aayog.

The other members of the high-level committee are S Aparna, secretary, department of pharmaceuticals; Rajesh Bhushan, secretary, Union ministry of health and family welfare; Nitin Gupta, chairman, central Board of Direct Taxes (CBDT); and a joint secretary (policy) from the department of pharmaceuticals.

Currently, publicity and promotion by pharma companies is supervised under the Uniform Code of Pharmaceutical Marketing Practices (UCPMP), the Indian Medical Council Regulations, 2002, and also by the Central Board of Direct Tax.

UCPMP , which is in operation since January 1, 2015, aims to prevent unethical practices by pharmaceutical companies. It governs the conduct of pharmaceutical companies in terms of marketing, duly covering the various aspects including samples and gifts. The code also has guidelines on provisions related to hospitality and cash or monetary grants to physicians and their families.

The Indian Medical Council Regulations, 2002, details professional misconduct by medical practitioners , including accepting gifts from drug companies and commissions from laboratories .

The rules under Central Board of Direct Tax require pharma companies to file details on how much they spend on promotion and publicity. The Supreme Court has also ruled that gifts to medical practitioners by pharmaceutical companies is not allowable expenditure under the Income Tax Act, 1961.

“The first one is a code, which makes it voluntary with no legal teeth; the second has some force which means some penal provisions can be enforced; and the third ones come under the tax ambit and can be a grey area as it deals with publicity and promotion. This panel will look at all three holistically and recommend to the minister how these can be harmonized and made legally enforceable,” said the official cited above.

The committee is expected submit its recommendation within next three months.

“This will be a good step as currently there are multiple codes that govern marketing practices of pharma companies leading to confusion. This move hopefully will help companies to know more clearly what’s allowed and what’s prohibited. It will be good to have a unified code on the subject “ said Sudarshan Jain, Secretary General, Indian Pharmaceutical Alliance (IPA).