Alerts & Updates 18th Mar 2024

Marketing Code for Pharmaceutical Companies gets tougher: A comparison of the 2024 and 2014 codes

Authors

Ashishchandra Rao Partner | Mumbai
Vinuta Rayadurg Principal Associate | Mumbai

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  • The Department of Pharmaceuticals has introduced the new Uniform Code for Pharmaceuticals Marketing Practices (UCPMP), 2024, significantly tightening the regulatory framework surrounding pharmaceutical marketing practices. The Department has notified the new Uniform Code for Pharmaceuticals Marketing Practices (UCPMP), 2024 (2024 Code) in place of the previous voluntary Code, Uniform Code for Pharmaceuticals Marketing Practices (UCPMP) (2014 Code). Notably, the 2024 Code introduces significant changes in how breaches of the Code by pharmaceutical companies are handled, with  a significant shift towards greater accountability for pharmaceutical companies. The key differences between the 2024 and 2014 Codes and implications for industry are discussed in our alert.

    • The 2014 Code required the information about drugs to be up-to date, verifiable and accurately reflect current knowledge or responsible opinion. The New Code has added one more criterion to be fulfilled and requires the information to be also “balanced”, while maintaining the above criteria.
    • The ambit of comparison of drugs and the care to be taken by pharmaceutical companies were wide in the 2014 Code. While the 2014 Code mentioned that the care must be taken in the manner mentioned therein, or “any other way”, the 2024 Code states that care must be taken  by the pharmaceutical companies in the manner prescribed there in  or in any other “similar” way.
    • The 2024 Code has introduced the term “Brand Reminders” to the Code, which includes in its purview (i) informational and education items and (ii) free samples provided by the companies to medical professionals. The  2014 Code however only mentions free samples. More guidelines on Brand Reminders given below:

    – Under the 2024 Code, informational and educational items refers to books, calendars, diaries, journals (including e-journals), dummy device models and clinical treatment guidelines for professionals used in healthcare settings. The value these items  should  not exceed Rs. 100 per item. The 2024 Code permits Brand Reminders for the above items, as long as they do not have an independent commercial value for healthcare professionals.

    – With respect to free samples, the 2024 Code has made the following changes that shall be observed while providing samples:

    i) The companies should note the name and address of the healthcare practitioner to whom samples of products are distributed.

    ii) Samples are provided only for the purpose of creating awareness about treatment options and for acquiring experience in dealing with the product.

    iii) Sample packs should be limited to prescribed dosage for not more than three patients for the required course of treatment.

    iv) A company is permitted to offer not more than twelve sample packs per year per drug to any healthcare practitioner.

    v) The earlier requirement of procuring a signed and dated request for supply of sample packs has been done away with.

    vi) The monetary value of samples distributed should not exceed two percent of the domestic sales of the company per year.

    • The 2024 Code clarifies that as long as receipt of Brand Reminders by healthcare practitioners does not amount to recommendation or issuance of a statement by a healthcare professional with respect to use of the brand, it will not be construed as endorsement activity.
    • The 2024 Code also requires the supplier and the receiver of the Brand Reminders to comply with the relevant provisions of the Income Tax Act, 1961 with respect to deductions and reporting of income.
    • An entire section on Continuing Medical Education (CME) has been added to the 2024 Code. Pharmaceutical companies are permitted to engage with healthcare professionals and incur expenditure for CME, Continuing Professional Development (CPD) or otherwise for conferences, seminars, workshops, etc., only through a well-defined, transparent, and verifiable set of guidelines. The following framework has been developed in order to achieve the above:

    – Conducting of events in foreign locations is prohibited.

    – CME/CPD meetings are permitted to be conducted only by:

    i) Medical Colleges/Teaching Institutions/Universities/Hospitals

    ii) Professional Associations of Doctors/Specialists

    iii) NIPERs, Laboratories of ICMR, DBT, CSIR etc., Pharma Colleges/other academic and research institutions

    iv) Pharmaceutical companies, including their trusts/associations, either alone or in collaboration with professional bodies, institutions as stated in a, b & c above.

    – Pharmaceutical companies conducting such events are required to share on their website, details of the events conducted, including the expenditure incurred which may be subject to independent, random and risk-based audit for this purpose.

    – The 2024 Code also requires companies to publish the procedure followed in the selection of participants and speakers, display a statement of their funding sources and expenditures on their website, which may be subject to special audit for this purpose.

    – The companies organizing such events and incurring expenditure must be compliant with the provisions under the Income Tax Act, 1961.

    • In order to encourage research and innovation, the 2024 Code permits interaction between pharmaceutical companies and healthcare professionals with certain restrictions:

    – The said study or research should be one that has the requisite approval from the competent authority such as ICMR, DGCI, Ethics Committee, etc. It also requires compliance with the instructions by relevant bodies such as the National Medical Council;

    – Engagement of healthcare professionals in a consultant-advisory capacity shall be for bona-fide research services, under a consultancy agreement involving a consultancy fee or an honorarium-based payment (in compliance with the Income Tax Act, 1961).

    – The engagement of healthcare professionals mentioned above must also ensure that patients interest is not compromised and integrity of the healthcare professional is maintained as per the NMC regulations.

    – The expenditure by pharmaceutical companies on research activities through healthcare professionals has been permitted, subject to compliance with the provisions of the Income Tax Act, 1961.

    • The 2014 Code prohibited pharmaceutical companies from providing travel facilities for vacations or professional events like conferences, seminars, workshops, or Continuing Medical Education (CME) programs to healthcare professionals and their families, necessitating that these individuals bear their travel expenses. However, the updated 2024 Code introduces a significant modification by allowing pharmaceutical companies to offer travel facilities to healthcare professionals, but exclusively when they are serving as speakers for CME or Continuing Professional Development (CPD) programs. In keeping with this, similar restrictions are also imposed for extending hospitality services, unless the person is a speaker for a CME or a CPD programme.
    • As against the 2014 Code, the 2024 Code requires a committee named as “Ethics Committee for Pharma marketing Practices (ECPMP)” to be constituted by all the Pharmaceutical Associations in India with the following roles and responsibilities:

    – The Committee to consist of 3 to 5 members (as against the 2014 Code which required a 3 member committee) and chaired by its Chief Executive Officer (the 2014 Code required the committee to be represented by the Executive Head and not below the rank of a Director). The composition of the committee will be approved by the Board of the Association and prominently placed on its website.

    – In case a complaint is filed with an association not concerning its members, the same is to be transferred to the relevant association.

    – If a company is a member of multiple Associations, or is not a member of any association, complaints are to be dealt with by the Pharma Industry Associations.

    – The Pharmaceutical Associations are required to share on their website, the details of complaints received, including the nature of complaint, the company against whom the complaint has been made, the status of the complaint and any action taken by ECPMP.

    – The duration for maintaining the above details on the website of the association has been increased from 3 days to 5 days. It also requires that the above should be uploaded on the UCPMP portal of the Department of Pharmaceuticals.

    • The 2024 Code has also made certain changes to the procedure for lodging complaints:

    – Where the complaints used to be earlier addressed to the Secretary General/ Chairman/President, now, under the 2024 Code, the complaints are to be addressed to the Chief Executive Officer of the Association.

    – The 2014 Code required a complaint to be registered within 3 months of the breach. Whereas, the 2024 Code has relaxed this requirement and provides a time of 6 months with an additional 6 months (for reasonable delay to be explained in writing).

    – The 2024 Code has clarified that no pseudonymous or anonymous complaints or any complaints made without the prescribed fee will be entertained.

    • In the provisions of how the complaint is to be handled, the 2014 Code provided that even if a complaint is withdrawn, the process of enquiry must be completed. Although such explicit terminology is not found in the 2024 Code, it requires that the process of enquiry be taken up and completed.
    • The time period for the Company to respond to a complaint has been increased from 10 days to 30 days in the 2024 Code. Similarly, the time period for the committee to render a decision has also been increased from 30 days to 90 days.
    • Under the 2024 Code, in case the Committee decides that there is a breach of the Code, the Committee is required to advise on remedial measures that need to be taken. In the 2014 Code, the Committee was merely required to provide reasons for its decision.
    • The 2014 Code provided for the following penalties if the Company is found to be in breach of the Code. These penalties are also reflectedin the new 2024 Code. These include

    – suspending the company from the Association it is a member of;

    – to reprimand the company and publishing full details of such reprimand on their websites;

    – to require the company to issue a corrective statement (textual or audio-visual) in the same media which was used to promote the material;

    – to ask the entity to recover the money or items given in violation of the Code.

    The 2024 Code enhances the authority of the overseeing Committee, empowering it to forward its recommendations to relevant agencies or authorities via the Department of Pharmaceuticals. This means that companies found violating the Code could be scrutinized by statutory bodies and held accountable under pertinent legislation, such as the Drugs and Cosmetics Act, 1940, and its associated rules and regulations. Consequently, regulatory bodies like the Drugs Controller General of India (DGCI) or the Central Drugs Standard Control Organization (CDSCO) may recognize these breaches and enforce the recommended penalties or actions under their regulations. The Appeals Committee of the Pharmaceutical Marketing Practices (ACPMP) is also vested with similar enforcement powers.

    • By terming it as “Appeal” and not “Review” as mentioned in the 2014 Code, the Apex Committee for Pharma Marketing Practices (ACPMP) under the 2024 Code, has made the following changes:

    – A period of 15 days has been provided for filing the Appeal, with an additional 15 days (by providing reasons for the delay in writing),. The 2014 Code provided for a period of merely 5 days for filing this Appeal.

    – As against the 2014 Code, which provided a period of 10 days for filing of response to the review, the new Code merely states that the ACPMP shall give notice to both the parties.  A reasonable opportunity of being heard will be given the  final decision must be provided within a period of six months.

    The 2024 Code has eliminated the previous requirement from the 2014 Code that mandated pharmaceutical companies to comply with decisions made by the erstwhile AECPMP. Specifically, the obligation for companies to submit an undertaking within five days, affirming the cessation of any promotional activities or the retrieval of items distributed in violation of the 2014 Code, has been removed.

    • The 2024 Code also does not require the final decision of the Appeal and the corrective measures/actions taken by the Company to be uploaded on the website of the Association, as was provided under the 2014 Code.
  • Next Steps for Pharma / Medical Devices Companies
    • The Chief Executive Office of companies will have to provide a self-declaration in the format given, within two months of the end of every financial year to the Association for uploading on their website, or directly on the UCPMP portal of the Department of Pharmaceuticals in case he is not a member of such a body, or a member of more than one such bodies.
    • Companies shall have to issue and/ or modify the terms of appointment of medical representatives to bring it line with the Code.
    • Companies shall have to monitor and record the size, packaging, and distribution of the free samples of its products.
    • Promotional and advertising material including audio visual media, has to now confirm strictly to the restrictions placed in the 2024 Code, including but not limited to comparisons and healthcare professionals endorsements.
  • ELP COMMENTS

    It can be seen from the above changes made to the UCPMP, 2014 that significant progress has been made in the path to curb unethical practices in the Pharmaceutical Industry. The Code has removed the term ‘voluntary’ and requires all the Pharmaceutical Associations to strictly comply with the same. The Code also makes the associations more accountable by mandating them to set up a dedicated UCPMP portal on their website and take necessary steps towards its implementation.

    By giving the power to the Associations to send recommendations to Statutory Authorities and Government Agencies, the 2024 Code has made it difficult for the pharmaceutical companies to escape the eyes of such authorities, not only from the view of unethical practices, but other violations of the Code.

    The new Code has also attempted  to bring in companies that are not members of any association, or members of multiple associations, under the umbrella of the Code by making such companies accountable to the association that receives the complaint. It remains to see how the associations practically implement the Code and assist the Department of Pharmaceuticals in curbing unethical marketing practices that are prevalent in the industry.

  • We trust you will find this an interesting read. For any queries or comments on this update, please feel free to contact us at insights@elp-in.com or write to our authors:

    Ashishchandra Rao, Partner, Email  – ashishchandrarao@elp-in.com
    Vinuta Rayadurg, Principal Associate, Email – vinutarayadurg@elp-in.com

Disclaimer: The information contained in this document is intended for informational purposes only and does not constitute legal opinion or advice. This document is not intended to address the circumstances of any individual or corporate body. Readers should not act on the information provided herein without appropriate professional advice after a thorough examination of the facts and circumstances of a situation. There can be no assurance that the judicial/quasi-judicial authorities may not take a position contrary to the views mentioned herein.