Bengaluru-based pharmaceutical company Micro Labs Limited, which was raided by the Income Tax department last month, has called the allegations that it gave freebies to doctors worth ₹1,000 crore to ensure its Dolo-650 tablets are prescribed to patients, as baseless and incorrect.
Media reports said that the company claimed that they had business of just ₹350 crore during the COVID pandemic and so it was impossible for them to promote the drug by spending such a large amount.
The executive vice-president, marketing and communication of Micro Labs Limited, Jayaraj Govindaraju, told the media that it is not viable for a company to spend ₹1,000 crore on marketing a brand which has done a business of just ₹ 350 crore in the COVID year. Moreover, Dolo 650 comes under NLEM (price control), he said. He clarified to the media that the amount mentioned was the total marketing cost spent by the whole corporate for last several years cumulatively.
In July, the Central Board of Direct Taxes (CBDT) has said that the makers of Dolo-650 have been accused of indulging in “unethical practices and distributing freebies worth ₹1,000 crore to doctors and medical professionals to promote the company’s products”. The group had been accused by the CBDT of debiting unallowable expenses in its book of account to distribute freebies, which included travel expenses, gifts etc., to medical professionals.
These claims made by the CBDT come after the Income Tax department on July 6 raided 36 premises in nine states, of Bengaluru-based Micro Labs Ltd.
Also read: Doctors given freebies worth ₹1,000-cr to prescribe Dolo-650, SC told
Supreme Court terms allegation a ‘serious issue’
Further, the company clarified that Dolo 650, like other paracetamol tablets, is very much under price control. During the COVID-19 pandemic, it was the most prescribed drug because it was the frontline therapy to manage fever according to the treatment protocol. But, the company said that besides Dolo tablets other medicines such as vitamin C and zinc combinations, had also become popular and used a lot during the COVID period.
Hearing a PIL filed by the Federation of Medical and Sales Representatives Association of India, the Supreme Court on August 18 had said the allegation that the manufacturer of Dolo 650 had distributed freebies worth ₹ 1,000 crore is a “serious issue”. Justice DY Chandrachud had even observed that even he was prescribed the same tablet during COVID.
A bench of Justice DY Chandrachud and Justice AS Bopanna was informed that Dolo-650 mg tablet makers had invested ₹1,000 crore in freebies to have its anti-fever drug prescribed to patients. The SC has asked the Centre to file its response within 10 days on the PIL seeking directions to make pharmaceutical companies liable for giving freebies to doctors as an incentive.
Also read: COVID effect: India popped up 350 crore Dolo650 pills worth ₹567 crore
The PIL by the Federation of Medical and Sales Representatives Association of India has questioned the control of drug formulations and prices of the medicines being sold in India.
According to media reports, the problem is certain formulations of a paracetamol are under price control like 500 mgm but 650 mgm paracetamol is not. And, so, the latter can be sold at higher prices.