September 18, 2022

The Case on Ethical Code for Marketing Medicines

Amitava Guha

A TWO-JUDGE bench of the Supreme Court, on August 18 afternoon, issued an order on the legal code for the marketing of medicines.

The Federation of Medical and sales Representatives’ Associations of India (FMRAI), had filed a petition in the court urging the government to enforce a legal code for marketing of medicines.

The Indian media, however, has distorted facts and misreported the issue by selectively highlighting the issue of perks given to doctors to improve the sales of one product, Dolo-650, an antipyretic drug.

Dolo-650, produced and marketed by Micro Labs,  contains 650 mg of paracetamol, the antipyretic drug paracetamol, which is widely used to treat body fever. However, the standard approved dose of paracetamol is only 500 mg and consumption of higher doses could cause damage to the kidneys and liver.

It is to be noted that the ‘National List of Essential Medicines’ (NLEM), which is used to monitor the production and availability of essential medicines, includes 500 mg of paracetamol.

The Drugs Prices Control Order, 2013 (DPCO 13) follows the NLEM to check the overpricing of essential drugs in the country. However, the NLEM specifically mentions the dosage of the drugs, and by changing the dosage of the drug, the manufacturers could avoid a place in the NLEM and thereby evade price control.

In a classic example, Dolo-650, which contains 650 mg of paracetamol instead of the standard 500 mg, has evaded price control by not making it to the NLEM. During the Covid-19 pandemic, with the aid of effective marketing strategies, Dolo-650 has seen a sharp 289.60 per cent  increase in its sale in 2021. 

As per the Central Board of Income Tax (CBDT) directive of October 2014, all the expenses made by pharmaceutical companies on marketing expanse or entertaining doctors will be taxable. 

Recently, the CBDT has declared that Micro Labs has submitted the marketing expenditure of Dolo-650 to be Rs 1,000 crore, which was taxable. It was also found that this amount was spent to entertain doctors. Following this, Micro Labs went to the High Court.

However, it is to be noted that the case of Dolo-650 filed in the High Court by Micro Labs is different from the case filed by the FMRAI in the Supreme Court seeking an order on the legal code for the marketing of medicines.

The FMRAI’s case in Supreme Court, meanwhile, concerns a much larger and graver issue of the moral code of ethics to be followed by the pharma companies while marketing their products.

Surprisingly, the medical representatives who have been conduits to the unethical marketing practices in the pharma industry are the ones who demanded the government abolish all kinds of unethical marketing practices in the sector. 

They placed their demands charter to the government in 1981, where they first called for abolishing unethical marketing practices. Later they also demanded that the government should prepare a code for ethical marketing practices to give it legal strength.

Later, the FMRAI exposed the nature of unethical promotions with the help of many documents including pieces of evidence of bribing the doctors. A set of such documents were covered on the front page of the Times of India in 2008. 

Tapan Sen, then member of the parliament, presented before the then minister of chemicals and fertilisers several instances of unethical promotion by several pharmaceutical companies.

The campaign against such unethical actions has pressured the government to call for a meeting with the associations of pharmaceutical companies wherein it directed the drug companies not to engage in such activities. 

The government also proposed a uniform code of marketing medicines. Accordingly, the large companies prepared a code but the associations of small companies exposed that the code was designed without prior discussion with them and pointed out that they had several disagreements with it.

However, the government declared the code designed by the big companies as the Uniform Code for Pharmaceutical Marketing Practices (UCPMP) and clearly mentioned that the code would remain voluntary for six months and, if it does not work, it shall be made legal. 

When protested by several public organisations, the government was compelled to call for a meeting of pharma companies and public organisations where it was established that the so-called code, though prepared by the industry, was violated by all during the period of six months and beyond.

The instances presented in the meeting could not be refuted by the pharma companies. Devastated, the pharma companies informed that they would not attend any meeting in the presence of civic society members. 

Though initially, the FMRAI was not invited to these meetings, due to the insistence of the civil society, they were called. It, along with two other organisations, after wider consultation, prepared a legal, ethical code for the marketing of medicines. 

The department of pharmaceuticals had a separate meeting with the civil society participants on the code they presented and decided that they would prepare another code and shall give legal teeth under the Essential Commodities Act. 

The civic society said that this Act could not be applicable under the Essential Commodities Act and after a long silence, in response to an RTI filed by the FMRAI, the department of pharmaceuticals replied that they had prepared and sent a code to the law ministry. 

As alerted, the ministry refused to extend the Essential Commodities Act on this code.

Despite several reminders from civic society, the government remained silent for two years on this issue. Then, the FMRAI was compelled to file a public interest litigation (PIL) in the Supreme Court. 

In the appeal, the petition urged to the Supreme Court to direct the respondents to give the Uniform Code of Pharmaceutical Marketing Practices statutory basis and make it effective by providing a monitoring mechanism, transparency, accountability as well as consequences of violations; and that till an effective law is enacted, the court may lay down the guidelines to control and regulate unethical marketing practices by pharmaceutical companies or in the alternative make the existing Code binding with such modifications/additions as the court may find proper and reasonable, which should be followed by all the authorities/courts under Articles 32, 141, 142 and 144 of the Constitution.

The petition explained how the wrong kinds of medicines were unethically promoted with worse kinds of marketing practices. These medicines were irrational and some were even harmful even as they were highly profitable for the pharma companies. 

As mentioned by the WHO, maximum antibiotics were dumped in India, which was a global concern. It was also established that these unethical practices corrupting the noble profession were easily and openly performed by the pharma companies as there was no law against it. 

It was also mentioned with examples where huge sums were spent, very much within the knowledge of the government, to entertain doctors. 

All such expenses are passed on to the cost of the medicines and the burden is borne by the public which buys the medicine at highly inflated prices. 

Even the CAG has detected that large amounts spent by the pharma companies was being shown in tax returns, and tax exemption is also provided to them for such expenses. This has caused the government a very large revenue loss. 

It took one year and four months to get the petition admitted to the Supreme Court and on March 11, 2022 it ordered the government to give its response by July 25, 2020. However, the government remained silent. 

On August 18, 2022, in the first hearing, the Supreme Court expressed surprise over the delay in the government’s response over such an important matter even as a statement on the marketing code was placed in parliament. The court gave ten more days to the government to respond.

On the other hand, the code prepared by the civil society constructed ethics for all –manufacturers, doctors, chemists, distributors and medical representatives. It also asked the government to screen the validity of each questionable medicine and keep away the unsubstantiated claims on safety and efficacy. If the code is legally enforced, it will provide more access to rational medicines available and affordable to poor people.