Asserting that a cartel of doctors, pharma firms and diagnostic labs are fleecing patients in the country, the Madras High court on Wednesday took notice of the practise of providing 'commissions' to doctors for promoting and prescribing their drugs.
The court directed the Union health ministry, chemical and fertilizers ministry, National pharmaceutical pricing authority and Medical Council of India to explain as to the action taken against doctors for violating the code of conduct and accepting gifts, hospitality, cash or monetary grant from pharmaceutical firms and allied health sector Industries in the past 5 years.
A division bench of Justices N Kirubakaran and P Velmurugan passed the order while expanding the scope of the plea moved by Fourrts (India) Labs Pvt Ltd a pharmaceutical company challenging its income tax assessment.
During the scrutiny of its assessment for 2012-13, the firm admitted to a total income of Rs 14.69 crore and claimed deductions for Rs 5.45 crore towards licenses and taxes and another Rs 42.81 lakh towards 'sales and promotion expenses' which includes payments made to doctors for promoting their drug.
Appalled over the submissions, the court said "It is clear that even though accepting such commissions is prohibited under law, pharmaceutical companies are still promoting their drugs by providing gifts, travel facilities, hospitality, cash or monetary grant to doctors.
It is also proved that drugs are overpriced illegally by the companies. It is shocking and surprising to note that the company claimed deduction from income tax for the amount spent towards sale promotion expenses as well as for licences and taxes."
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