Chennai: Asserting that a cartel of doctors, pharma companies and diagnostic labs is fleecing patients in the country, the Madras high court took a suo motu notice of the practice of providing ‘commissions’ to doctors for promoting and prescribing their drugs.
A division bench of Justice N Kirubakaran and Justice P Velmurugan directed the Union health ministry, Union chemical and fertilizers ministry, the National Pharmaceutical Pricing Authorityand Medical Council of India to explain as to the action taken by them against doctors across in the country for violating the code of conduct and accepting gifts, travel facilities, hospitality, cash or monetary grant from pharmaceutical companies and allied health sector industries in the past five years.
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The bench passed the order while expanding the scope of the plea moved by Fourrts (India) Labs Pvt Ltd – a pharmaceutical company challenging its income tax assessment.
During the scrutiny of its assessment for 2012-13 the company admitted to a total income of Rs 14.69 crore and claimed deductions for Rs 5.45 crore towards licences and taxes and another Rs 42.81 lakh towards ‘sales and promotion expenses’ which includes payments made to doctors for promoting their drug.
Appalled over the submissions, the court said, “It is clear that even though accepting such commissions is prohibited under law, pharmaceutical companies are still promoting their drugs by providing gifts, travel facilities, hospitality, cash or monetary grant to doctors.
It is also proved that drugs are overpriced illegally by the companies.
It is shocking and surprising to note that the company claimed deduction from income tax for the amount spent towards sale promotion expenses as well as for licences and taxes.”
The bench then directed the authorities to answer to a series of questions including, the list of doctors who were paid by Fourrts, number of doctors prosecuted for violating the rule and accepting such gifts from 2009.
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The court also wanted the authorities to answer as to the number of pharmaceutical companies that have been prosecuted for regulation of the drug pricing authority, number of pharma companies who have claimed tax deductions under ‘sale and promotions’ head, number of complaints received on over pricing of drugs, and amount recovered from pharma firms for over pricing.
This apart, the court has also directed the Union government to inform as to when a separate ministry for pharma and medical devices would be established as stated by the ministry of chemicals in February 2018 by January 20.