The Madras High Court in India stated that 8,667 pharmaceutical companies have claimed income tax deduction on the freebies they give to doctors as “sales promotion expenses” and “gifts” in their tax return for the year 2019-20.1
In January 2020, the Court had taken suo motu cognizance (when courts in India take a case on their own) of issues like pharmaceutical companies bribing doctors and overpricing drugs.2 Justice N. Kirubakaran and Justice P. Velmurugan called for various details from the National Pharmaceutical Pricing Authority (NPPA) and the Medical Council of India (MCI).1
Under the law, pharmaceutical companies are not allowed to promote their products to doctors by the way of gifts, travel facilities, hospitality, cash or monetary grants. However, the Madras High Court believes this practice to be rampant in India.2
A report released in August 2019 by a non-governmental organization, Support for Advocacy and Training to Health Initiatives (SATHI), alleged that pharmaceutical companies bribe doctors with various gifts, ranging from pens to Apple phones costing 80,000 Indian rupees, microwaves, tablets, silver items, gold jewelry and X-ray equipment for clinics.3
700 Doctors Paid Over a Million Dollars by Drug and Medical Device Companies in 2018 in the U.S.
According to an analysis conducted by ProPublica, more than 2,500 physicians in the United States have received at least half a million dollars each from drug makers and medical device companies in the past five years alone, not including money for research or royalties from inventions.4 More than 700 of those doctors received at least $1 million.4
Each year from 2014 to 2018, drug and medical device companies spent between $2.1 billion and $2.2 billion paying doctors for speaking and consulting, as well as on meals, travel and gifts for them.4
The top five drugs for which pharmaceutical companies spent the most money paying doctors in 2018, excluding research and royalty payments were Xarelto ($17.9M), Farxiga ($12.6M), Humira ($12.2M), Jardiance ($12.2M) and Keytruda ($11.7M).4
Aaron Kesselheim, MD, a professor of medicine at Harvard Medical School said, “Promotional spending is a major way that manufacturers in these situations distinguish themselves from each other—not by conducting comparative studies or by engaging in substantial price reductions.”4
1 Babu G. Over 8,660 pharma firms claimed tax deduction during 2019-20: I-T dept. Business Standard Feb. 22, 2020.
2 Leo L, Prasad G. Over 8,600 pharma firms claim income tax deductions on ‘gifts’ given to doctors. Live Mint Feb. 22, 2020.
3 Gadre A, Diwate A. Promotional Practices of the Pharmaceutical Industry and Implementation Status of Related Regulatory Codes in India. Support for Advocacy and Training to Health Initiatives Aug. 2019.
4 Ornstein C, Weber T, Jones R. We Found Over 700 Doctors Who Were Paid More Than a Million Dollars by Drug and Medical Device Companies. ProPublica Oct. 17, 2019.