The Supreme Court has directed the Centre to constitute a three-member committee to examine measures to prevent pharmaceutical companies from offering expensive gifts and other incentives to doctors to promote drug sales. According to reports from Mint, the petition was filed in 2021 by the Federation of Medical and Sales Representatives Association, seeking accountability of pharmaceutical companies for such practices. A bench of Justice Vikram Nath and Justice Sandeep Mehta passed the order, with the court having reserved its decision after Solicitor General Tushar Mehta informed it that the Union government would constitute the committee to examine whether a statutory framework was needed to regulate such practices and, if so, what form it should take. The proposed committee should consider suggestions and representations from stakeholders before making its recommendations to the Centre, as reported by NDTV Profit. The committee will consider the suggestions and representations and give its recommendations to the Union. The matter is directed to be listed on 29 January for consideration of compliance affidavit by the Union, as stated by the Supreme Court.
Mankind Pharma was trading at ₹2,424 on the NSE, down 3.04% at 11:50 am, leading the decline among major pharmaceutical stocks. As reported by Moneycontrol, Zydus Lifesciences fell 2.49% to ₹1,124.30, while Dr. Reddy's Laboratories declined 1.20% to ₹1,189.40. Other major pharmaceutical companies also witnessed significant declines, with Cipla falling 1.77% to ₹1,303.70, Glenmark Pharmaceuticals declining 0.82% to ₹2,263.60, and Lupin down 0.74% at ₹1,998.10.
During the hearings, the Supreme Court had earlier questioned whether the Uniform Code for Pharmaceutical Marketing Practices (UCPMP), 2024 had sufficient enforcement mechanisms and whether the government intended to give statutory backing to the code. The Centre said the existing regulatory framework provides for disciplinary action against doctors who accept gifts, travel facilities, hospitality or monetary grants from pharmaceutical companies. However, on regulating pharmaceutical companies themselves, the government decided to set up the committee to examine the need for statutory regulation. The petitioners have argued that the existing Uniform Code for Pharmaceutical Marketing Practices (UCPMP) lacks an adequate statutory enforcement mechanism, seeking a legally enforceable framework to regulate pharmaceutical companies, monitor promotional practices and hold companies accountable for offering incentives to doctors. The case has been pending before the top court for several years and has repeatedly drawn judicial scrutiny of the pharmaceutical industry's promotional practices, with the court questioning whether existing safeguards are adequate.
The issue has previously drawn regulatory and legal scrutiny with significant cases involving major pharmaceutical companies. In 2024, a government probe found that AbbVie Healthcare India Pvt. Ltd, the India arm of the American pharma giant, had spent approximately ₹1.91 crore to sponsor luxury foreign trips to Monaco and Paris for 30 doctors. This invited disciplinary action by a Department of Pharmaceuticals committee, which reprimanded AbbVie Healthcare and asked the Central Board of Direct Taxes (CBDT) to evaluate the tax liabilities and also asked the National Medical Commission to take action against the doctors involved. However, in August 2026, the Delhi High Court stayed disciplinary proceedings against the healthcare professionals based on their plea, noting that the action stemmed from an anonymous complaint. In 2022, the CBDT informed the Supreme Court that Micro Labs Ltd, which makes the Dolo-650 tablet, had distributed freebies worth ₹1,000 crore to doctors to market the drug.
The latest development comes against the backdrop of the government's introduction of the Uniform Code for Pharmaceutical Marketing Practices, 2024, which was intended to regulate promotional practices by pharmaceutical companies and set standards governing their interactions with healthcare professionals. For pharmaceutical companies, stronger statutory regulation could mean greater scrutiny of their interactions with doctors and tighter controls on promotional expenditure and incentives. For doctors, it could provide clearer rules on what benefits they can accept from drug companies. The Supreme Court subsequently questioned whether the existing framework had sufficient teeth and whether it required statutory backing. The case centres on a broader question for the pharmaceutical industry and the medical profession: how far can drug companies go in promoting their products to doctors, and what safeguards are needed to ensure commercial incentives do not influence medical decisions.
