Supreme Court on Thursday expressed concern over allegations that painkiller Dolo manufacturer spent crores of rupees in freebies for doctors in the garb of the marketing drug during the COVID outbreak. Jan Swastha Abhiyan, a pharmaceutical industry watchdog, and the Federation of Medical and Sales Representatives Association of India said the top seven pharma companies in this country collectively spent more than Rs. 34,000 crores over eight years in marketing spend making drugs expensive.
What you are saying is not music to my ears, Supreme Court judge DY Chandrachud had observed, adding that when he had Covid, he was prescribed Dolo as a painkiller.
"This is a serious issue, and we will look into it," he added while directing the Centre to file a reply within 10 days.
Senior Advocate Sanjay Parikh, representing a pharmaceutical company watchdog, told the Supreme Court about the Central Board of Direct Taxes (CBDT) July allegations that painkiller Dolo-650 manufacturers had spent "Rs 1000 crores" in freebies for doctors to prescribe the drug during the COVID-19 outbreak.
The Ministry of Finance on July 13, 2022 had issued a press release, giving details of the search and seizure operations conducted by the Income Tax department against the Bengaluru-headquartered Micro Labs without naming the company.
"The initial gleaning of the evidence has revealed that the group has been debiting in its books of account unallowable expenses on account of distribution of freebies to the medical professionals under the head "Sales and Promotion". These freebies included travel expenses, perquisites and gifts etc. to doctors and medical professionals for promoting the group's products under the heads "Promotion and Propaganda", "Seminars and Symposiums", "Medical Advisories" etc. The evidence indicates that the group has adopted unethical practices to promote its products/ brands. The quantum of such freebies detected is estimated to be around Rs. 1000 crore," said the press release.
Meanwhile, speaking to Moneycontrol, Micro Labs rubbished these claims saying the allegations were "baseless" and "exaggerated".
"We got Rs 350-crore turnover during COVID month. It is impossible for a company to spend Rs 1,000 crore to reach Rs 350-crore target. There was price control on Dolo-650, we have very small margins, how could we spend that amount on this product," Executive Vice President Marketing and Communication Jayaraj Govindaraju told MoneyControl.
Top 7 pharma firms spend more than Rs 34,000 crores to influence doctors: Plea In SC
Pharmaceutical companies spend enormous amounts of money on sales promotion to influence doctors to generate maximum prescriptions thereby increasing drug sales, the plea in the Supreme Court said.
"One study noted that Top 7 pharma companies together had spent Rs. 34,186.95 Crores in Marketing Spend in 8 years making drugs expensive," the plea added. "Sales Promotion expenses constitute 20% of the cost of drugs thereby taking the drugs further away from the reach of the common man. Though termed as 'sales promotion,' these are, in fact, direct or indirect advantages offered to doctors (as gifts and entertainment, sponsored foreign trips, hospitality and other benefits) in exchange for an increase in drug sales," it added.
Jan Swasthya Abhiyan said such practices directly affect one's health and violate fundamental rights if the drugs in question were over-prescribed and unnecessary.
