New pharma marketing code targets to cut drug price

Free drug samples and trips to doctors push up medicine cost by 20%

With affordable health care being the government’s focus, the role of the pharma pricing watchdog, the National Pharmaceutical Pricing Authority, has become more relevant than it has ever been. To bring down the price of drugs, the government is also working on a uniform code for marketing that will prevent doctors from taking sponsored trips or free samples of drugs.

Such freebies make up for more than 20 per cent of the price of any drug, estimates suggest.

Vivek Hattagandi, founder of The Enablers, a brand management and field-force training firm, said, “On an average, medico-marketing promotion can vary from eight to 25 per cent, depending on the size of the company and the kind of products the company has.”

‘Bonus’ in the drug distribution chain is a big problem, according to an analyst. ‘Bonus’ is when a doctor is given free strips of medicines by middlemen and these strips are sold in the market at the maximum retail price of the product.

Tackling the problem

To plug the gaps in the system, the Department of Pharmaceuticals is at work on a uniform marketing code. A senior official from the Department of Pharmaceuticals told Business Standard that the new code will not allow pharma companies and medical device companies fly doctors in the name of training. It also envisages penalty in three stages - warning, suspension of licence and cancellation of licence.  

Analysts are of the view that once a uniform code for marketing in the pharma industry is made compulsory, the consumer would be the biggest beneficiary.

Current regulations

While there is a code for doctors and pharma companies even now, it is voluntary. The government cannot take action as the code hasn’t been made mandatory for companies to follow. According to the voluntary code, no gifts, benefits in kind may be supplied or offered to physicians to prescribe drugs by a pharmaceutical company or any of its agents or distributors. Further, pharma companies or their associations are not allowed to extend any hospitality under any pretext.  Companies should not provide free samples of drugs to any person, not qualified to prescribe such product.

Unethical marketing

Despite a code being in place, several corruption cases have been registered with the Department of Pharmaceuticals. In fact, two of India’s leading pharma companies have been accused of unethical marketing last year. In one of these cases recorded with the Department of Pharmaceuticals in September 2016, a Mumbai-based drug major had sponsored trips of nine doctors in August and September 2015.

Last year, the Indian subsidiary of an American pharma company was accused of unethical marketing practices. The allegation made by the Federation of Medical Representatives of India had blown up, resulting in the suicide of a sales representative.  

The way ahead

Even as industry agrees that there should be a code to stop unethical practices, companies believe that these rules alone may not change things. The domestic manufacturers’ association - Indian Domestic Manufacturers’ Association - has submitted to the department that the Medical Council of India (MCI) rules and the proposed Uniform Code for Pharmaceutical Marketing Practices (UCPMP) need to be harmonised. While the MCI rules are applicable to only doctors, UCPMP will be meant for only pharma companies. The government’s plan to make prescription of generic names compulsory, however, may come in handy to solve this problem to some extent, analysts said.