Rx Name Unethical Practitioners: A medical thriller unfolds in India

Economic Times

10 hours ago

Don't hide them behind stethos In an episode that could rival a streaming medical thriller, Department of Pharmaceuticals' (DoP) Apex Committee for Pharma Marketing Practices, under the ministry of chemicals and fertilisers, has found that AbbVie Healthcare India, a subsidiary of the US-based AbbVie Inc, had sponsored international trips for 30 doctors by spending nearly ₹1.91 cr in breach of Uniform Code for Pharmaceutical Marketing Practices (UCPMP) 2024. The trips were to Paris and Monaco - for an 'anti-ageing conference'. The twist? DoP refuses to reveal the names of these doctors, claiming that it would serve 'no public interest'. Seriously?
Under Section 8(1)(j) of RTI Act, personal information can be withheld unless it relates to public activity, or involves a larger public interest. The Supreme Court in 'CBSE v. Aditya Bandopadhyay' (2011) clarified that public interest trumps privacy when the matter involves ethics, misuse of public trust or potential illegality. Exposing medical professionals breaching ethical codes is as public interest-worthy as things can get. These were corporate-sponsored trips in violation of Medical Council of India (MCI) Code of Ethics, now incorporated under National Medical Commission (NMC).
It could also be a tax issue. In 'Apex Laboratories Pvt. Ltd. v. CIT' (2022), Supreme Court held that pharma companies can't claim expenses on such freebies as business deductions under Section 37(1) of I-T Act. Any expenditure prohibited by law, or contrary to public policy, can't be deemed a legitimate business expense. Finance Bill 2022 reinforced this, barring deductions for any expense in violation of MCI Code or Clause 7.2 of the UCPMP (Uniform Code for Pharmaceutical Marketing Practices). Under Section 28(iv), any non-cash benefit or perk arising from the exercise of a profession is taxable as 'profits and gains from business or profession'. So, doctors cannot claim these as business expenses, write them off or hide them behind a stethoscope. These are professional receipts, and I-T department expects them to be disclosed.How are these freebies valued by the recipient? Where value is ascertainable, the law mandates it be used. For goods - say, a smartphone - use the fair market value. For services like travel or hotel stays, the actual cost to provider - in this case, AbbVie - must be included. Doctors are expected to report these benefits and maintain documentary evidence, such as brochures, invoices, travel itineraries, etc. There are penalties for wilful concealment.I-T department's investigation wing can legally requisition information from DoP, the sponsoring pharma company - AbbVie, here - and even travel agencies that arranged these foreign trips. If AbbVie failed to report these expenses under Section 285BA (statement of financial transactions) of I-T Act, it could constitute non-reporting of high-value transactions.With data in hand, under Section 147 (reassessment), if any income (like value of these freebies) has escaped assessment, the assessing officer can reopen past returns. Under Section 69/69B, any unexplained income or expenditure can be added to the doctor's taxable income. Non-disclosure triggers penalties under Section 270A, interest under Sections 234B and 234C, and in cases of wilful concealment, prosecution under Section 276C.AbbVie, as a US multinational, could also fall under Foreign Corrupt Practices Act (FCPA). Under FCPA, doctors at public hospitals abroad - in this case, in India - are treated as foreign officials. Giving 'anything of value' - from per diems and conference sponsorships, to charitable donations - with a corrupt intent can trigger civil and criminal penalties in the US. Several global pharma companies have already faced FCPA enforcement for sponsoring foreign trips, or donating to charities run by government doctors.What we have here is actually a systemic failure to enforce transparency in an area that affects public health, tax revenue and professional integrity. By refusing to name the doctors, DoP is enabling opacity, shielding violators and undermining the credibility of India's regulatory frameworks.Worse, it sends a dangerous signal. The refusal to reveal names is not about privacy. It's about protecting privilege. And when privilege leads to tax evasion and ethical violations, silence becomes a public trust deficit. In this case, what happened in Paris and Monaco shouldn't stay in Paris and Monaco. (Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com.) Elevate your knowledge and leadership skills at a cost cheaper than your daily tea. Why Infy's Parekh takes home more than TCS' CEO despite being smaller
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