A tough prescription for pharma

It is not a secret that the pharmaceutical sector, for all that it has achieved in India, has created rather than solved a sales & marketing problem by normalising the practice of offering “incentives” to doctors in return for prescriptions that help increase sales. Ask around in the industry and it is not difficult to discover that at the root of most marketing efforts is a rather well-perfected system of gratification to doctors and surgeons and associated entities in return for prescribing the drug brands, medical devices or treatment regimens that are pushed by health care companies.

Malpractices in marketing continue to work against the interests of patients, unfairly, even criminally, enriching pharma sector players

This is an ugly game in which almost no one in the chain that produces, delivers and prescribes drugs or devices comes out clean. A small set of players from the medical fraternity has stood up but it has proven difficult to stop a system that is now well-entrenched. Multinationals are known to play the game as much as Indian companies though the level of sophistication and design of reward systems for doctors in return for helping to grow a particular brand may vary. The system is no longer seen as inappropriate at a minimum though it actually is far worse – a vile and corrupt practice for which the ordinary Indian patient inevitably pays a steep price.

The way it works has been described in a writ petition filed in the Supreme Court by the Federation of Medical and Sales Representatives Associations of India (FMRAI) and others. The petition says upfront in its first para: “There are abundant examples that show how corruption in the pharmaceutical sector endangers positive health outcomes. Whether it is a pharma company directly bribing a doctor for prescribing its medicines irrationally and/or irrespective of a health need or providing an indirect advantage to a health care professional for the same reasons, it is the patient’s health that is put at risk …  violations of this kind … are progressively becoming more pervasive.”

The issue has hit the headlines as a division bench of Justices D Y Chandrachud and A S Bopanna took up the petition and granted time to the government to file its position on the petition’s prayer that a voluntary code regulating conduct of pharma companies on promotions and freebies be given statutory teeth. The hearing earlier this month brought up the remarkable growth of Dolo, a paracetamol brand with a 650 mg dosage rather than the more commonly used 500 mg tablets. Sales of Dolo 650 rocketed during the Covid-19 pandemic. The manufacturer’s website is full of laudatory media reports on the brand, one of which is headlined: “Dolo turned into a hit with the right dose of perception and prescription”. Another one says: “How Micro Labs struck gold with Dolo-650 during Covid-19.” The company has denied that it pushed its prescriptions or changed dosage to evade price control.

The market size of the sector in India is in the region of USD 50 billion. Exports grew by almost USD 10 billion in the eight years ending 2021-22

At the core of the petition and the larger debate that is now emerging is whether businesses have done enough to self-regulate under the “Uniform Code for Pharmaceutical Marketing Practices (UCPMP), which dates to Jan. 2015, and seeks to curb unethical practices by the pharma players. The code governs the conduct of medical representatives, ad promotions, samples, gifts, hospitality, travel vouchers or cash offered by pharma companies to health care professionals or their families. None of this is enforceable by law though.

It is interesting that the government appears to have backtracked from its earlier view that the code must be made enforceable. In a reply in Parliament in 2020, the government offered a rather revealing view – it said there was no provision in the department to deal with complaints on unethical practices, and that these would be handled by an ethical committee in the pharma associations!

Recommended voluntary steps have so far done little to curb malpractice.  That the Supreme Court had to be moved on a burning health issue so soon after a pandemic that wrought havoc across India is an indicator of just how much government policy can align with corporate power and work to the detriment of ordinary citizens.

The pharma sector is noted for the high growth it has delivered. The market size of the sector in India is in the region of USD 50 billion.  Its power and reach stem from not just how much it has grown in India but also globally. Exports grew by almost USD 10 billion in the eight years ending 2021-22, according to official statistics. As a result, the sector is well received by the government, which announced an incentive scheme in March to strengthen pharma with an outlay of Rs.500 crores over the next three years.

It is also true that the government has been able to keep prices of key medicines and devices under control. The way medical stents were recently brought under the price control regime in the face of intense resistance by global manufacturers and Indian distributors was a remarkable example of the government standing up to powerful lobbies and special interest groups.

Yet, malpractices in marketing continue to work against the interests of patients, unfairly, even criminally, enriching pharma sector players and medical practitioners. This cannot help make the sector more professional or competitive globally. These ways of growing, accepted as they are as regular and routine, can only pull down the standing of India and open more questions on whether Indian companies can truly work to global standards in a sector that has inevitably been far more regulated than any other. A corrupt practice normalised and condoned by an entire nation is a signal to do more of the same. It is not an invitation to raise standards or to innovate or to build new strategies to grow the market.

The sector and the nation already face the more complex problem of fixed dose combinations (single dosages that are a cocktail of two or more approved active pharmaceutical ingredients) and a plethora of brand names – many of which sell combinations not required or not recommended or those banned in global markets.  The situation may be already out of control here, at least in terms of branded generics. In 2021, the Competition Commission of India reported that “there were 47,478 brands associated with 2,871 formulations in the pharmaceuticals market in India during August 2019–July 2020, implying the presence of 17 brands on an average for every formulation.”

Pushing for a strong law that stops companies from giving and doctors from taking incentives for prescriptions and sending the guilty to prison will turn out to be the best medicine for a sector that holds the promise of a bright future but is mired in some dark practices that it cannot be proud of.

(The writer is a journalist and faculty member at SPJIMR. Views are personal)