Indian Pharma: Hooked on the Hard Sell

Doctors sometimes accept gifts and cash to push drugmakers' products irrespective of patients' needs. Activists want New Delhi to step in

by Manjeet Kripalani

Indian drug companies have racked up a string of successes in recent years, churning out high-quality, competitively priced, generic pharmaceuticals. At the same time, the country has emerged as a destination for so-called medical tourists—American and European patients who enter Indian hospitals for surgical procedures because costs are lower and quality of care is comparable to that in Western hospitals.

Unfortunately these success stories deflect attention from a parallel health-care reality that's far less glamorous: Drug companies in India operate in a murky regulatory environment where there's no single government agency charged with looking after patients' well-being.

Free from the scrutiny of regulators, companies sometimes engage in aggressive marketing tactics, including showering physicians, pharmacists, and wholesale distributors with expensive gifts. In return doctors may prescribe drugs based on company incentives rather than the needs of patients. "The drug regulator, producer, and prescriber are on one side, and the illiterate, poor patient is on the other," says Chandra Gulati, a health-care activist in New Delhi and publisher of the medical journal MIMS [Monthly Index of Medical Specialties India]. "It's an equation where the patient can never win."

Last April the Indian Journal of Medical Ethics put an embarrassing spotlight on the problem of aggressive drug marketing. To gain access to companies, hospitals, and doctors, the authors agreed to withhold the names of individuals in their case studies. Still, the detailed examples stoked concerns about aggressive marketing:

• Drug company representatives sometimes provide doctors and pharmacists with gifts ranging from jewelry and consumer electronics goods to automobiles.

• Pharma companies especially target influential doctors at teaching hospitals, paying for them and their spouses to travel to international conferences.

• Some drug companies have printed out "rate cards" for doctors they deal with in small towns and cities: prescribing 1,000 tablets per month of a particular medication gets the doctor a cell phone; 5,000 tabs confers an air-conditioner; 10,000 tabs is worth a motorcycle.

Multinational drug companies operating in India acknowledge that ethical lapses do occur. But Ranjit Shahani, chief executive of Novartis India Ltd., questions whether the behavior described in the report really is widespread. “What I can say with surety is that Novartis does not follow such practices,” Shahani says. “This is quite an old report.”

Yet BusinessWeek was able to confirm many such examples, speaking with doctors, pharmacists, and drug company executives in the Mumbai area. One dentist at a Mumbai hospital, who asked not to be identified, was solicited by a drug company to participate in a research project and offered a $500 "incentive" to produce research proving a positive outcome. (He refused.) And speaking off the record, a doctor described retainers of $400 a month that are paid by drug companies. In return the doctor is supposed to prescribe at least 100 bottles of the company's drugs. Reps check with the local pharmacists to make sure the desired number of prescriptions are filled.

A Gimme Mentality

The Indian drug industry recognizes the need to police itself more effectively. In January the Organisation of Pharmaceutical Producers of India (OPPI) published a voluntary "Code of Pharmaceutical Marketing Practices," which calls for maintaining strict ethical standards when conducting promotional activities. That means "no financial benefit or benefit-in-kind may be provided or offered to a health care professional…in a manner that would have an inappropriate influence on the professional's prescribing practices."