Supreme Court seeks committee to curb pharma firms’ unethical marketing practices

The Supreme Court on Thursday asked the government to constitute a committee to examine the need for a statutory framework to regulate unethical marketing practices by pharmaceutical companies, related to concerns that such activities can lead to excessive prescription of high-priced medicines and affect citizens’ right to health and life.

The move follows a plea by the Federation of Medical and Sales Representatives Associations of India and others seeking stronger regulation of interactions between pharmaceutical companies and healthcare professionals, including statutory backing for the Uniform Code of Pharmaceutical Marketing Practices.

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The plea alleged that pharmaceutical companies use gifts, hospitality and other incentives to influence doctors’ prescribing decisions, potentially resulting in patients being prescribed expensive medicines.

It argued that the voluntary nature of the existing code had failed to prevent such practices.

The petition named the Department of Pharmaceuticals, the Ministry of Law and Justice, and the Ministry of Health and Family Welfare as respondents. It argued that the gaps in the existing framework needed to be addressed through legislation to protect the right to health.

The petitioners said unethical practices in the pharmaceutical sector could undermine health outcomes and put patients at risk. They sought a statutory code of ethical marketing for the industry, backed by penal provisions.

The case builds on a February 22, 2022 Supreme Court judgment in Apex Laboratories Pvt Ltd v Deputy Commissioner of Income Tax, in which the court held that pharmaceutical companies could not claim tax deductions for freebies given to doctors.

In that judgment, the court had expressed concern over pharmaceutical companies offering doctors gifts such as gold coins, refrigerators and television sets, as well as sponsoring foreign trips, in exchange for promoting their medicines. It held that such freebies were prohibited by law and could not be claimed as a business expense for tax purposes.

The petitioners have argued that the broader problem of unethical pharmaceutical marketing requires a separate statutory framework, as the existing voluntary code does not carry adequate legal or penal consequences.

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They also pointed to regulations in several countries, including the United States, France, Germany, the United Kingdom, China, Singapore and Australia, that seek to curb corruption and unethical practices in the pharmaceutical sector.

The Supreme Court is now examining the wider issue of regulating pharmaceutical marketing practices and whether a stronger statutory mechanism is needed to prevent incentives from influencing prescribing decisions.