NEW DELHI: The Supreme Court on Friday sought the Centre’s view on a PIL seeking to make pharma companies criminally liable for bribing doctors through freebies to the tune of over Rs 4,000 crore every year to get their drugs over-prescribed, which adversely impact public health.
A bench of Justices D Y Chandrachud and Surya Kant issued notice to the Union government on the PIL filed by the Federation of Medical and Sales Representatives Association of India, which alleged that showering of freebies on doctors influences them to prescribe the overpriced and potent drugs leading to lowering of inherent immunity system of patients and future complications.
Appearing for the petitioner, senior advocate Sanjay Parikh said that a prime example of it was the mindless prescription of costly Remdesivir injections for Covid patients during the pandemic even when its efficacy against coronavirus was not scientifically proved. Such a practice violated the general public’s right to life and health, he said.
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Parikh said, at present only doctors are criminally liable for receiving bribes instead of prescribing a particular medicine, though the SC has time and again ruled that both the bribe givers (in this case the parma companies) and the bribe-takers (doctors) are equally liable.
He requested the court to intervene in laying down a guideline to hold pharma companies liable for giving freebies to doctors. The petition filed through advocate Aparna Bhat informed the court that “pharmaceutical companies in India spend enormous amounts of money in sales promotion to influence doctors to generate maximum prescriptions thereby increasing drug sales.”
“One study noted that the top seven pharma companies together had spent Rs 34,187 Crores in marketing in the last eight years (Rs 4273 cr per year on an average) making drugs expensive. Sales Promotion expenses constitute 20% of the cost of drugs, thereby taking the drugs further away from the reach of the common man,” the association said.
“Though termed as ‘sales promotion,’ these are 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,” the petitioner alleged.
Last month, the SC had ruled that the pharma companies are not entitled to claim tax exemption on the expenditure incurred for giving incentives to doctors to promote their medical products and it would be considered as part of their income.
A bench of Justices U U Lalit and S Ravindra Bhat on February 22 had dismissed the plea of a pharma company seeking exemption on the expenditure of Rs 4. 7 crores incurred on freebies, which included hospitality, conference fees, gold coins, LCD TVs, fridges, laptops etc, to medical practitioners for creating awareness about a health supplement manufactured by it.
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The SC had upheld 2012 circular issued by the Central Board of Direct Taxes clarifying that such expenses incurred by pharmaceutical and allied health sector industries for distribution of incentives to medical practitioners are ineligible for the benefit of Section 37(1) of the Income Tax Act about business deduction.
