The Pharma companies spend huge amount of money for promotion of their products. Much of this is spent in organizing medical conferences in the name of continued medical education programmes. This involves travel expenditure to the doctors, lavish stay in five star hotels and sometimes even foreign trips for the whole family. This ultimately adds to the cost of drugs. Sensing this and on the demand of several civil society organisations the government formed a UCPMP. This was prepared by the Department of Pharmaceuticals, Government of India. But it was said to be voluntary for some time. A letter of the ministry of chemicals and fertilizers, department of pharmaceuticals dated 12 December 2014 had mentioned that this will be voluntary for a period of six months with effect from 1st January 2015 and will be reviewed thereafter.

The voluntary implementation of the code however did not yield desired results. H.N. Ananth Kumar, the then Union Minister for Chemicals and Fertilizers, had said in the Rajya Sabha in June 2016 that the voluntary code introduced in 2015 had not yielded desired results and that the government would make it mandatory. Pharmaceutical companies did not take any tangible steps to implement the code. Clauses 6 and 7 of the code prohibit the Pharma companies from giving freebies to the medical professionals. But despite several representations from the public health activists and civil society groups the practice has not stopped. The Indian medical council (professional conduct, etiquette and ethics) regulation also warns the doctors against such practices to receive financial benefits in any form including for attending education programs. Taking cognizance of the matter even the central board of direct taxes (CBDT) in its Circular No. 5/2012 F. NO. 225/142/2012-ITA.II, Dated 1-8-2012 had said that any such expenditure by the Pharma company will not be considered for tax deductions.

As per the guidelines in the UCPMP the companies have to adopt stipulated procedures laid down by the competent authority for involving doctors in their research projects. Several research works are not carried out in accordance with the laid down procedures. There are instances when the companies paid money to the doctors for the work which they had actually not done. It is a common practice that the companies approach doctors to do surveys highlighting efficacy of a particular drug produced/marketed by their company. These companies then use doctor’s reference including her/his photograph in their promotional literature. The UCPMP prohibits such work.

The U turn on making UCPMP mandatory raises suspicion of lack of will on the part of the government to keep its commitment and smells of some unfair deals between the government and the Pharma companies. When a delegation of the Alliance of Doctor for Ethical Healthcare had submitted its opinion to the drugs price regulating body, the National Pharmaceutical Pricing Authority (NPPA) in February 2020, they were told that the NPPA has no jurisdiction to check the companies. This has to be done through changes in the law at the ministerial level.

The high cost of drugs seriously affects the healthcare of our population. As nearly 67% of out of pocket health expenditure in our country is on drugs, this pushes 6.3 crore population below poverty line every year, a fact admitted by the National Health Policy document 2017. But the government has not taken any tangible steps to control the trade margin which many a times has been found to be 700 – 800%.

A committee was formed on high trade margins in the sale of drugs to go into the whole issue on 16 September 2015. This committee submitted its report on 9 December 2015. But it is now almost 5 years that the government has been sleeping over it. Even though this committee also did not spell on how the cost price of the drugs should be calculated but it took serious note of the excess trade margins. They pointed out that in some cases the trade margin is as high as 5000%. The government’s sleeping over the report for a such a long period raises scepticism over its intentions.

The pricing of the drugs should be calculated on the basis of the cost involved in its production. The market based pricing calculating the average of the highest selling drugs, is totally a flawed approach.

It is high time the government makes the UCPMP mandatory and comes out with an effective control on drug prices. (IPA Service)