Laws & Codes for Marketing of Drugs | India
Marketing has been the integral part of Pharmaceutical function. The long-term strategy & short-term tactics do play a role in the making or breaking of a product. A poor marketing strategy can lead to devastation of a good product. The marketing of pharma products is a bit special as the type of marketing preferred here is ethical marketing. Ethical marketing is inclined to truth & unbiased approach.
Marketing in Pharmaceutical industry is a function of creating awareness about the Brand & its attributes. The field of medico-marketing is the part of creating awareness using the recent and most scientific information related to the product. It involves providing unbiased, clear & full information of the product thus helping the Health Care Practitioners (HCPs) in prescription choices & decision making. In the current scenario of various Codes & Laws in Indian pharma industry, the medico-marketing seems to be a safer & feasible alternative to current practices for sales & prescription generation.
Unlike other Industries, the end user that is the consumer cannot be contacted directly in pharma industry as per various regulations which are based on the ethical & operational grounds. The customer for pharma selling is the Health Care Practitioners (HCPs). The pharma companies try to influence these HCPs by using a strong mechanism of sales force. The sales force or medical representatives call on the Physicians to make them aware about the product characteristics to influence prescription choices.
Pharma Sector Employment Statistics & projections
|Segment||Employment in Millions||Employment Growth
|2013||2017||2022||(In Millions)||(In Millions)||(In Millions)|
Source: KPMG Report 2013
There are around 3000 registered pharma companies & 10500 manufacturing units. But every company is not working as per ethics. There have been instances of companies using various ways to influence Physicians like bribing them with various commodities, arranging dinners with alcohol, giving undue schemes on medications, travel & trips etc . When these unethical ways of practice are used, Physicians start comparing pharma marketing to other industries & a perception is created as pharma companies are same as other industries selling commodities. It needs to be mentioned here that not all the pharma companies are not into unethical marketing practices.
The current Govt. policies & extensive R & D activities are leading to an environment where the pharma companies need to rethink about the Marketing strategies.
There are many Laws & Codes for Marketing & Ethical promotion of drugs.
- UCPMP (Uniform Code for Pharmaceutical Marketing Practices) – Most recent
- The Code of Pharmaceutical Practices, 2012 by Organization of Pharmaceutical Producers of India (OPPI)
- Drugs & Cosmetics Act, 1940
- Drugs & Magic Remedies (Objectional advertisement) Act, 1954
- Code of Self-regulation in Advertising by The Advertising Standards Council of India (ASCI)
- WHO Code of Pharmaceutical Marketing Practices
- IFPMA Code of Pharmaceutical Marketing Practices
- The Competition Act, 2002
- Essential Commodities (Control of Unethical Practices In Marketing Of Drugs) Order, 2017 – In Review Process
These guidelines clearly suggest the methods to be followed in pharma marketing, i.e. Do’s & Don’ts.
Penalty for proven offence related to Marketing Practices
Essential Commodities (Control of Unethical Practices In Marketing Of Drugs) Order, 2017
This Order prohibits pharmaceutical companies from offering cash, gifts and sponsorship or providing travel facility or paid vacations for doctors, chemists and pharmacists.
Paragraph 3 prohibits offering of gifts, cash cards, hampers or any article that may generate monetary benefit or allow gains in kind to a medical practitioner or any retail chemist or pharmacists or their ‘family members’ by any pharmaceutical company or its agents. However, it allows the sponsorship of academic conferences organised by medical associations and screening camps or awareness campaigns to be organised in government owned healthcare facilities, while stipulating that these cannot be used as surrogate advertising.
Free Samples: Order also prohibits a pharmaceutical company or its agent to offer free samples to any medical practitioner. However, an exception to this rule has been created by allowing pharmaceutical companies to provide free samples up to a full course of medication for a maximum of 3 patients.
This Order mandates that the MD or CEO of a company shall be responsible for ensuring compliance of the Order.
Paragraph 5 of the Order, provides that all complaints regarding violations of the Order shall be looked into by an Ethics Compliance Officer (ECO) appointed by the Government of India, who shall not be below the rank of a Joint Secretary to the Government of India.
Paragraph 4 of the Order imposes a penalty on a company or its agent which fails to comply with the provisions of sub-paragraph (a) (b) (c) or (d) of paragraph 3 of the Order. Paragraph 5(4) of the Order lays down the procedure for levying penalty by suspending the marketing of the violating company’s highest selling product from the preceding 12 months, for a period of three months to one year.
The Order also provides that the companies could apply to commute the marketing suspension by paying a penalty ranging from Rs 5 Lakh to Rs 10 Lakh. As per the Order, the appellate authority will be the Department of Pharmaceuticals Secretary, and the appeals from the orders of the Appellate authority shall lie with the courts.
Penalty for proven offence related to interaction with HCPs
If Offence is proven then suspension of marketing activity of the “highest selling” drug of the pharmaceutical company in India based on the moving annual turn-over of preceding twelve months and confiscation of the entire stock of such drug available in the market. The period of suspension will be proportional to the “monetary consideration” involved in the offence. The sentence may be “commuted” against payment of an amount direction proportional to the sentence.
|Pecuniary value of violation (INR)||Penalty by suspension of marketing of highest selling drug for (Time Period)||Amount equivalent, for commutation of
|1||> 1000 – 5000||3 months||5 lakhs|
|2||> 5000 – 10000||6 months||10 lakhs|
|3||> 10000 – 50000||9 months||50 lakhs|
|4||> 50000 – 100000||1 year||1 crore|
|5||> 100000||> 1 year||10 crore|
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