SC Directs Centre to Form Committee on Regulation of Pharma Marketing Practices

The Supreme Court on Thursday directed the Centre to constitute a committee to examine whether pharmaceutical companies' marketing practices require statutory regulation, particularly the practice of offering gifts, hospitality and other benefits to doctors to promote medicines.

A Bench of Justices Vikram Nath and Sandeep Mehta issued the direction while hearing a plea seeking a legal framework to regulate pharmaceutical marketing and curb allegedly unethical interactions between drug companies and medical practitioners.

Solicitor General Tushar Mehta told the Bench that the Union government would constitute a three-member committee to examine whether statutory regulation of pharmaceutical companies was necessary and, if so, recommend the form such regulation should take.

The Centre said the existing regulatory framework already provides for disciplinary action against doctors who accept benefits from pharmaceutical companies. However, the proposed committee will specifically examine whether pharmaceutical companies themselves should be brought under a statutory regulatory framework.

The committee will consider suggestions and objections submitted by stakeholders before making recommendations to the Centre on the need for legal regulation of pharmaceutical marketing practices.

The proceedings stem from concerns over pharmaceutical companies allegedly offering freebies, gifts, hospitality, travel facilities and other benefits to doctors as incentives for prescribing their products.

The petitioner's side argued that the existing system creates an imbalance by providing consequences for doctors who accept such inducements while not having a corresponding statutory mechanism to regulate or penalise the companies offering them.

The Supreme Court has asked the Centre to file an affidavit confirming compliance with its directions. The matter has been scheduled for further hearing on January 29.

The issue comes amid broader proceedings before the apex court concerning medicine pricing, affordability and prescription practices.

In separate public interest litigations concerning the pricing of medicines, generic drugs, medical devices and prescription practices, the same Bench had raised questions over the substantial difference between the prices at which medicines are supplied to retailers and their maximum retail prices.

During an earlier hearing, the court questioned the Centre over a cancer medicine carrying an MRP of Rs 27,000 while reportedly being supplied to retailers for around Rs 2,700 to Rs 3,000.

The Supreme Court had described the roughly ten-fold difference as “broad daylight dacoity” and questioned why manufacturers should be allowed to set MRPs substantially above the prices at which medicines are supplied to retailers.

The Bench had also considered whether a uniform margin could be prescribed for pharmaceutical products covered under the Essential Commodities Act, regardless of whether a medicine is classified as essential or non-essential under the Drug Price Control Order.

The court further observed that a large gap between the MRP and the retailer supply price could undermine consumer confidence. It noted that a patient could even become suspicious about the authenticity of a medicine if a drug carrying an MRP of Rs 27,000 was being offered for around Rs 3,000.

The latest direction seeks to examine the regulatory gap concerning pharmaceutical companies' marketing practices while the broader proceedings continue to address concerns surrounding drug pricing and access to medicines.