A bitter pill for doctors, pharma companies

The Asian Age, January 06, 2015

By Pradeep S Mehta

The ‘symbiotic’ relationship between the pharma industry and medical professionals has greater implications for developing countries such as India, with high private participation in healthcare sector

Many doctors often prescribe a particular brand of medicine for personal gains. To curb this unethical practice, the long awaited Uniform Code of Pharmaceutical Marketing Practices (UCPMP) is finally seeing the light at the end of the tunnel. Alas, it does not cover unnecessary diagnostic tests and surgeries. Yet, it covers a large area in our healthcare system’s distortions.

Medicines constitute 72 per cent of the healthcare costs in India. The draft code, which was on the backburner since 2011, has finally come into effect from January 2015. It was delayed due to bureaucratic red tape as well as protest by a section of the pharmaceutical industry.

The code, though will be voluntary to start with, began from January 1, 2015 and will be reviewed after six months. If it has not been implemented effectively by the pharma associations/companies, the government would consider making it a statutory code thereafter. The most common and probably the most damaging unethical practice by pharma companies from a consumer’s point of view is the unholy nexus between the pharma industry and medical professionals that has been debated world over for several years.

Last year, we saw British pharma giant GlaxoSmithKline (GSK) fined by the Chinese authorities of bribing doctors, hospitals and government officers so that it could sell their drugs at higher margins. They were accused of spending three billion yuan ($490 million) through various travel agencies, using them as intermediaries to facilitate bribes to doctors and officials. Chinese authorities even sentenced the head of GSK China operation, Mark Reilly, and few others to a three-year prison term.

In the past five years, leading pharma companies including GSK, Pfizer, Johnson & Johnson, Eli Lily, Merck, etc have paid over $13 bn in fines to the US department of justice to settle charges of misleading marketing and bribing doctors to get their drugs prescribed. Pfizer was fined $2.3 bn in 2009, then the largest healthcare fraud settlement and the largest criminal fine ever imposed in the United States. Pfizer pled guilty to misbranding the painkiller drug Bextra with “the intent to defraud or mislead”.

In 2011, Merck agreed to pay a fine of $950 mn related to the illegal promotion of the drug Vioxx, which was withdrawn from the market in 2004 after studies found that the drug increased the risk of heart attacks. Johnson & Johnson was fined $2.2bn in 2013 for similar misdemeanours. J&J paid tens of millions of dollars in kickbacks to Omnicare, a company that supplied drugs to nursing homes, so that they would prescribe Risperdal to elderly patients with dementia. Shockingly, Risperdal had not been licensed to treat dementia.

This “symbiotic” relationship between the pharma industry and medical professionals has greater implications for developing countries such as India, with high private participation in healthcare sector, low public health expenditure by government combined with rampant unethical practices of pharma companies and doctors resulting in huge out of pocket expenditure (OOP). It is one of the highest in world. Medicines constitute the main share (72 per cent) of total OOP payments. High OOP payments can push households into poverty and make them vulnerable to catastrophic health expenditures.

In a survey carried out by CUTS International in 1995, over 2,000 prescriptions were collected by consumer groups of West Bengal, Rajasthan, Gujarat, Maharashtra, Tamil Nadu and Andhra Pradesh. The survey revealed that there was a gross tendency to prescribe unnecessary medicines like tonics. Sixty per cent of the prescriptions were considered to be irrational.

In another CUTS study, in select districts of Assam and Chhattisgarh in 2010, it was found that a mere 20 per cent of consumers surveyed obtained medicines from public hospitals, as doctors in these hospitals prescribed expensive drugs which were available only in private chemist shops. The study recommended fast-tracking implementation of prescription audit, covering both medicines and diagnostic tests across the country, as that would help curb the unethical practice.

As the financial relationship cases between the pharmaceutical companies and the healthcare professionals are increasingly dragged into the public debate, pressure for disclosure of all such payments made to the physicians by the pharmaceutical companies has been building up over time. Here, the Indian pharmaceutical regulation can take a clue from the US laws which has made such disclosure mandatory.

As part of the new US healthcare reform process, the Physician Payment Sunshine Act, 2010, became a part of the US healthcare law regime in 2013. It requires all pharmaceutical and medical device companies of the country to report all payments to doctors above $10 or $100 in an year, or face hefty fines.

There were checks and balances for the doctor-pharma firm nexus in India such as 2009 amendment to the medical code of ethics that has banned doctors from taking any allurements from pharma companies. However, like many such codes, they were never taken seriously. Pharmaceutical industry was never bothered about it; the pharmaceutical industry continues to give freebies without fear of any consequence.

Couple of years ago, the Central Board of Direct Taxes (CBDT) had disallowed expenses on all “freebies” to doctors by the Pharmaceutical Companies in India under Section 37(1) of the Income Tax Act. It also clarified that an equivalent sum of the freebies enjoyed by the medical practitioner or professional associations is also taxable as business income or other income.

Be that as it may, notification of the UCPMP is a move in the right direction. However, there is still scepticism that with thousands of pharmaceutical companies operating in India both large and small, self regulation with UCPMP without any enforcement, will be difficult to work. Anyhow, this is indeed quite a strong signal from the government to the industry for “shaping up”… sooner the better.

The writer is secretary-general, CUTS International. Vikash Batham of CUTS contributed to this article.

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