Centre to adopt ‘name and shame’ policy to curb unethical marketing practices

Arunish Chawla, Secretary, Department of Pharmaceuticals, stressed the significance of reputation in deterring unethical marketing practices within the sector. He asserted that as the department ensures adherence to ethical standards, the “name and shame” policy represents just the initial stride towards this objective.

“A reputational play is the best defence against unethical market practices. A company which has a standing in the market, if it is reprimanded and the reprimand is put up in the public space and across the social media space, the damage it causes to the reputation and value of that company is immense,” said Chawla.

He added that the “name and shame” policy is where it begins and that the story will go further.

Chawla made these comments on being asked how the government would look at penalising those who do not comply with the provision of the newly notified Uniform Code on Pharmaceutical Marketing Practices (UCPMP) 2024 which was notified on March 12.

The code will curb pharmaceutical companies from extending personal benefits to healthcare professionals or their family members. The restricted benefits include gifts, travel facilities, hospitality, and cash or monetary grants for marketing activities.

He mentioned that the new code applies to both the government and the entire corporate sector.

Chawla held a comprehensive meeting on Monday with stakeholders to discuss the implementation of the recently notified Uniform Code for Pharmaceutical Marketing Practices 2024. The meeting included representatives from various Pharma associations, which Chawla highlighted as pivotal for enforcing the code.

Regarding the meeting participants, Chawla noted, “It comprised representatives from key pharma associations, including the Indian Pharmaceutical Alliance (IPA) representing the largest 25 Indian pharma companies; OPPI, which serves a similar role for multinational pharma companies in India; IDMA, a significant association comprising 1,100 medium-sized drug manufacturers across the nation, and the Bulk Drug Manufacturers Association, representing around 300 bulk drug manufacturers nationwide. Collectively, they represent approximately 1,300 to 1,400 pharmaceutical companies operating in India.”

The government has also collected market data, from the market footprints of pharma companies over the last three to four years to ensure strict compliance.

“Today’s meeting was called at the end of the financial year and going forward all the companies have to submit a self-declaration within two months of the end of every financial year to the association. We are preparing a panel of auditors,” Chawla said. The undertaking shall be uploaded on the association website or directly on the UCPMP portal. Those who do not comply will automatically go on a risk-based audit framework.

The code states that the complaints of violation will be handled by the ‘Ethics Committee for Pharma Marketing Practices’ in each association. This committee will comprise three to five members and will be headed by the chief executive officer (CEO) of the board, who will be responsible for adherence to the code.

The Department of Pharmaceuticals pointed out that pharma companies, distributors, agents, wholesalers or retailers should not offer gifts for the personal benefit of any healthcare professionals or their family members. The Department of Pharmaceuticals last brought out UCPMP in 2014.

Chawla shared that given its dynamic and evolving nature, the industry is undergoing a fast transformation. “The technology is evolving, telemedicine is coming in, digital health is taking off, online prescriptions are coming, blockchain technology is coming in, generative AI is coming in. There’s so much happening on that front. So. we needed to evolve a framework which is mandatory and yet flexible enough to adapt to these changes which are coming in the market and technology,” he said.

The government decided to adopt the code after a High-Level committee, led by a member of NITI Aayog, was formed to examine marketing practices. This committee, which included members from the Pharma and health sectors, along with the chairman of the Central Board of Direct Taxes, gathered input from all stakeholders. Their recommendations formed the basis for the new code, as explained by Chawla.

According to him, the key feature of the code is its mandatory nature, distinguishing it from previous voluntary codes.

Why it is mandatory?

Chawla says that the new code ensures that “there is a government oversight, there is a risk-based audit, there is a self-certification and there is a redressal mechanism.” He also clarified that the new code is quasi-statutory.

The new code combines four significant statutes into a single framework. It’s based on internationally recognised ethical marketing practices established by the World Health Assembly. It incorporates regulations from the Medical Council of India (MCI) for doctors’ conduct, guidelines from the Drugs and Cosmetic Act regarding product claims and marketing practices, and provisions from the Income Tax Act concerning income computation and penalties for violations.

Chawla explained, “The code integrates these key statutes and allows for government assessment of audit findings. It enables penalties, disciplinary actions, or remedial measures as per relevant government agencies or authorities.”

However, critics argue that the code lacks clear penal provisions. In response, Chawla explained that Section 12 of the code outlines five sub-sections detailing the penal provisions.

He said, “When drafting the code, we consider the audience. It’s written in plain language so that medical representatives and healthcare practitioners can easily understand what is permissible and what is not. However, interpretation may vary among those implementing the code and government agencies.”

Chawla continued, “If you carefully review the code, it explicitly references certain statutes such as advertising practices, the Income Tax Act, and MCI regulations. This aspect, in my opinion, is pivotal.”

“In simple terms, maintaining a good reputation is the most effective defence against unethical market practices, which is what the code aims to achieve,” he concluded. CNBCTV18