The obnoxious practice of drug companies

The obnoxious practice of drug companies

The obnoxious practice of drug companies


The obnoxious practice of drug companies giving costly gifts such as gold chains, cars and foreign junkets to doctors may come to an end if the government accepts recommendations made by the parliamentary standing committee on health.

Such gifts make doctors prescribe drugs of companies dishing out freebies and also contribute to higher marketing costs, which in turn, add to the consumer price of such drugs, the committee observed in its latest report.

The practice needs to be banned by enforcing legal – not voluntary – code of conduct for doctors and drug makers. The department of pharmaceuticals has in place a code of conduct for drug companies to restrict such unethical practices, but it is voluntary in nature.

The parliamentary panel has recommended that this code by made mandatory. The Medical Council of India (MCI) too had formulated rules for doctors to oversee marketing of drugs in 2009.

But despite such codes, ‘there is no let up this evil practice and pharma companies continue to sponsor foreign trips of many doctors and shower them with high value gifts like air conditioners, cars, music systems, gold chains etc to obliging prescribers who then prescribe costlier drugs as quid pro quo’, the report says.

While there is a code of conduct forbidding doctors from accepting gifts, hospitality and foreign trips, the committee said, there is no legal provision for penalizing drug companies indulging in unethical practice of ‘bribing doctors by expensive gifts, cash payments or sponsorship of pleasure trips’.

‘It is no secret that promotional costs are loaded into the price of prescription drugs and constitute a major part of the price of drugs’, the panel concluded.

The voluntary nature of Uniform Code of Pharmaceutical Marketing Practices of the department of pharmaceuticals has failed to curb unethical practices and illegal promotion of drugs.

The committee has also recommended that the health ministry should be involved in enforcing the code, along with the department of pharmaceuticals.


The health ministry has set up a three member panel to examine illegal clinical trials approved by the Drug Controller General of India (DCGI). Gross violations in drug approvals was exposed by the parliamentary panel.

The committee will examine the validity of the scientific and statutory basis adopted for approval of new drugs, outline appropriate measures to bring about improvements in the processing and grant of statutory approvals.

It will also suggest steps to institutionalise improvements in the functioning of the Central Drugs Standard Control Organization.

The panel, comprising director general of the Indian Council of Medical Research V.M. Katoch, president of the National Brain Research Centre Dr P.N. Tandon and former director of the Sanjay Gandhi Postgraduate Institute of Medical Sciences, Lucknow, Dr S.S. Aggarwal, has been asked to submit its report within two months.

The action of the National Pharmaceutical Pricing Authority (NPPA) bringing a variety of diabetes and cardiovascular drugs under price control is, on balance, a retrograde step and could do long-run damage to India’s pharmaceutical industry and to the cause of affordable healthcare.

Before the government wields heavy-handed price regulation to correct for market failures, it must explore and exhaust other possibilities. It has not, in the present case. Mere existence of market failure, in other words, is not sufficient ground for price control.

Information asymmetry between the doctor who prescribes medicines and the patient who buys what is on the prescription is an important consideration.

Unethical marketing practices by drug companies that reward unethical doctors who prescribe the brand/formulation that offers them the biggest reward rather than what suits the patient best in terms of therapeutic effect or finances are another.

Both can and must be tackled directly, rather than by price control. If regulation could ensure there are no spurious drugs in the market or that all brands, regardless of price, offer a minimum level of quality, and if regulation required all drug packaging to prominently display the generic names of the active ingredients, apart from the brand name, it would be possible for patients to buy the cheapest drug available, rather than only the one prescribed.

Doctors’ conduct vis-a-vis medical representatives and pharma companies is subject to stringent regulation in developed countries. Abdication of that responsibility is not justification for price control here.

Regulation of the kind described above would leave price to reflect quality and trust. Better products would command better prices. Leaving it this way is essential to foster the growth of Indian pharma giants who stand for quality.

Resorting to price control as the easy way to affordability could drive quality out of the market, if not drug availability. In the case of off-patent drugs, reinforcing fair competition is superior to price fixing intervention. NPPA has acted beyond its brief

Yours Truly
Dr Aneek Gupta D. Litt, PhD

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