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Prescribe and swipe, Doc. All prepaid -GS Mudur
-The Telegraph


New Delhi: Many doctors across India have been offered prepaid cash cards as gifts by drug industry representatives over the past three years to try and influence prescriptions for patients, pharmaceuticals sales executives have said.

While drug companies have long used largesse as "brand reminders" for doctors, a prepaid cash card leaked by an industry whistleblower appears to be the first evidence to suggest doctors are also being offered cash cards that can be preloaded with up to Rs 50,000.

Pharma sales representatives and bank officials have said several drug companies have procured hundreds to thousands of such prepaid cards over the past three years.

The cards are not illegal but these transactions occurred at a time two regulatory arms of the government - the Medical Council of India and the Central Board of Direct Taxes - have been trying to discourage drug companies from offering gifts to doctors.

The MCI in December 2009 had notified a code of ethics that prohibits doctors from accepting gifts, travel assistance or hospitality for any purpose amid concerns that such practices could influence doctors to prescribe inappropriate or unnecessary medications.

In August 2012, the CBDT declared that doctors who accept gifts from drug firms should declare the equivalent value as taxable business income while companies should reveal such expenditure on doctors in their annual accounts.

"The practice continues, but it has gone underground," said Alok Ganguly, vice-president with the Federation of the Medical Representatives Associations of India, Calcutta. "It has become harder to detect unless insiders reveal things."

Unethical marketing practices by the pharmaceutical industry have evoked concern in India and other countries where international drug companies have been under investigation over charges of bribing doctors. Earlier this week, the multinational GlaxoSmithKline said it would no longer pay doctors to promote its products.

While The Telegraph was collating responses to the Glaxo announcement, a drug industry insider shared with the newspaper an image of a prepaid gift card purportedly issued by HDFC Bank to a Mumbai-based drug company. The card mentions the company's name, Macleods, and a drug it produces. The validity of the card had expired in March this year. (See visual)

Contacted by this newspaper last week, Rajesh Kabu, president at Macleods, neither denied nor confirmed whether his company had issued such prepaid cards to doctors. He said he would need to "check" the information but did not respond to subsequent telephone queries.

A marketing manager at Macleods and two senior officials outside its marketing department, who requested anonymity, declined to discuss the cards.

Other sources said that if the company had shown the money spent on the cards in its annual accounts, it could not be accused of any illegality, although the ethical propriety of the doctors who might have accepted them could be questioned.

Banking sector officials said Macleods had procured the cards from HDFC Bank between 2010 and 2012 and that the company had since "taken its business to ICICI Bank".

A sales executive with Macleods, who requested anonymity, has claimed that dozens of doctors across several towns have been offered prepaid ICICI Bank cards this year.

"Some doctors accept them, and some don't," the executive said. "They are preloaded with a range of amounts - at times Rs 2,000, at times Rs 5,000 or Rs 10,000." A bank official said a typical prepaid card could be loaded with any amount up to Rs 50,000 and used just like a debit card to purchase anything - from groceries to clothing to electronic appliances.

Bank officials have said both HDFC Bank and ICICI Bank are "fully compliant" with the law, specifically with banking rules that specify that a bank should know its customer. In this case, the customer was Macleods.

But a prepaid card may be passed on, along with a secret operating pin number, to any end-user. "In such a situation, banks have no idea who the end-users might be and for what purpose they're receiving the cards," an official said.

Pharma executives and bank officials have independently named three other pharmaceutical companies as having procured prepaid cards in India but have not backed their claims with documents.

Doctors and industry representatives campaigning for changesay unethical marketing has survived in the absence of any law that bans such practices. The MCI notification is a code of ethics, while the CBDT expects doctors and companies to comply with its regulations.

"Gifts from drug companies to doctors represent a breach of the code of ethics relevant to professionals such as doctors, although it is legal," said Sanjiv Lewin, a paediatrician at the St John's Medical College, Bangalore. "And patients will have to bear the costs."

Several studies in the past have indicated that drug industry representatives provide selective and, at times, inaccurate information to doctors about their brands of medicines which could lead to doctors prescribing inappropriate or unnecessary medications to patients.

"Until the MCI and state medical councils take exemplary action against doctors, and the Union government penalises erring pharma companies, patients will unknowingly suffer the consequences," said Kankokkaran Vadakkeveetil Babu, an ophthalmologist in Kerala who had exposed unethical conduct by doctors in the past.