New Delhi: The Supreme Court on Thursday directed the Central Government to constitute a committee to examine the need for statutory regulation of pharmaceutical companies’ marketing practices, including gifts, hospitality, and other benefits provided to doctors to promote their products.
A bench of Justices Vikram Nath and Sandeep Mehta issued this direction while hearing a petition seeking measures to statutorily regulate pharmaceutical companies’ marketing activities and prevent unethical contacts between pharmaceutical companies and doctors.
During the hearing, Solicitor General Tushar Mehta informed the bench headed by Justice Nath that the Central Government would constitute a three-member committee. This committee would examine the need for a statutory mechanism to regulate pharmaceutical companies. If found necessary, the committee would also recommend the form of such regulation.
The Centre stated that the current regulatory framework provides for disciplinary action against doctors who accept such benefits from pharmaceutical companies. However, the issue of statutory regulation of pharmaceutical companies themselves will be addressed by the proposed committee.
The committee will consider suggestions and objections received from stakeholders and make recommendations to the central government on the need to statutorily regulate pharmaceutical companies’ marketing practices.
This matter has emerged amid concerns that pharmaceutical companies offer freebies, gifts, hospitality, travel facilities, and other benefits to encourage doctors to prescribe their products.
The petitioner argued that the current system is inequitable. While it provides for action against doctors who accept such inducements, there is no corresponding statutory mechanism to regulate or punish pharmaceutical companies that offer such benefits.
The Supreme Court has asked the central government to file an affidavit regarding compliance with its directives. The next hearing in the case will be on January 29.
Supreme Court also takes a tough stand on drug prices
The issue of pharmaceutical companies’ marketing practices has come to the fore at a time when the Supreme Court is also examining broader issues related to drug pricing and affordability.
While hearing various public interest litigations related to drug pricing, generic drugs, medical devices, and prescription practices by doctors, the same bench had raised questions about the significant difference between the retail price of drugs and their maximum retail price (MRP).
In the previous hearing, the Supreme Court questioned the Central Government about the MRP of a cancer drug being ₹27,000, while the same drug was being made available to retailers for approximately ₹2,700 to ₹3,000.
The Supreme Court termed the price difference of up to tenfold as “daylight robbery” and questioned why manufacturers should be allowed to set MRPs significantly higher than the supply price.
A bench headed by Justice Vikram Nath also questioned whether a uniform margin could be set on pharmaceutical products falling under the Essential Commodities Act, regardless of whether the drug is classified as essential or non-essential.
The Supreme Court also remarked that the significant difference between the MRP and the price charged to retailers could undermine consumer confidence. The court noted that if a drug with an MRP of ₹27,000 is available for around ₹3,000, a patient might suspect the drug to be counterfeit.