Dolo-650 maker Micro labs bribed docs with Rs 1000-crore freebies? “Not Correct”, concludes IPA

The Indian Pharmaceutical Alliance (IPA), a body representing domestic pharma companies has cleared Dolo-650 maker Micro Labs of the charge that it bribed medical doctors with freebies worth Rs 1000 crores in one year to promote its popular antipyretic.

In an investigation report submitted to the National Pharmaceutical Pricing Authority (NPPA), IPA concluded, “In view of interaction with the management of the company and the detailed reply, it is clear Rs 1000 crore expenditure on single brand Dolo 650 on freebies in one year is not correct.”

Having received complaints by medical associations, NPPA asked IPA to investigate the matter under the Uniform Code of Pharmaceutical Marketing Practices (UCPMP), following which a three-member internal committee examined the issue.

Also read: Why is Dolo-650 manufacturer Micro labs in trouble?

IPA said it has been misrepresented that they (Micro Labs) have incurred expenses of 1000 crores in one year. “The total turnover of the company is Rs 4500 crores, out of which around Rs 2500 crores is domestic sales. The overall expenses on domestic sales in last four years (year by year on all activities) on an average are Rs 200 crores,” the IPA said in the report. BT is in possession of the report.

IPA also examined if Dolo 650 is the correct dosage to be administered to patients and if the drug is under drug price control.  Regarding the correctness of the dosage of Dolo 650, IPA said that (Micro Labs) explained during the investigation that paracetamol 650 mg is an official formulation approved by Indian Pharmacopoeia in the year 2018.

“Its strength has been approved in all the treatment protocols issued by the Government of India and various state governments including Indian Council of Medical Research (ICMR) during the pandemic. Besides, it is a recommended dose across the world, and has been available in many countries such as the U.S., European countries. The company submits that 650mg strength is accepted as the appropriate dosage regimen for mild to moderate fever,” the IPA report said.

“Dolo 650 mg is covered in the National List of Essential Medicines and its prices to the consumer are controlled by NPPA since 2016. The price of Paracetamol 650 was Rs 1.84/-per tablet in the year 2021,” said the report.

Micro Labs in response to the IPA investigation also released the five years expenditure on all activities. The pharma company explained that it incurred a total of Rs 186 crores on total sales and marketing in FY 2020-21 of which, it spent Rs 65 crores on Product Management Team Expenses, Rs 67 Crores on Scientific and Academic Services and roughly Rs 53 Crores on Sales and Promotion Activities. In 2019-20 the company spent Rs 67 Crores on Sales and Promotion Activities.

According to the IPA report, as far as the total expenses on Dolo 650 incurred by the company in the last five year is concerned, it spent a total of Rs 1152 lacs in 2021 – 22 on visual Aids, Literature & Print Promotional Inputs, Brand Reminders, Physician Samples and Scientific and Academic Services combined.  The figure was Rs 712 Lacs in 2020-21 for the same.

Federation of Medical and Sales Representatives Association of India, citing a report by the Central Board of Direct Taxes (CBDT) recently filed a Public Interest Litigation (PIL), stated that the company gave over Rs 1,000 crore freebies to doctors for prescribing an irrational dose combination of Dolo-650.

The PIL sought to make pharmaceutical companies liable for giving freebies to doctors as an incentive to prescribe their drugs.

Dolo-650 maker Micro Labs attracted troubles earlier in July when the Income Tax department conducted searches at the offices and residences of the top management of Micro Labs for alleged tax evasion. The searches were pertaining to financial documents, balance sheets and business distributor networks of the company.

The IPA in its report on the tax evasion charges said, “As far as the CBDT allegation regarding violation of tax provisions against the respondent company, the Committee, and the Indian Pharmaceutical Alliance, association of Indian pharmaceutical companies, has neither the mandate nor the resources to investigate into such matter,” adding nonetheless, Micro Labs is cooperating with the tax authorities for requisite information/clarification on marketing expenses and related tax implications.

Dolo-650, a medicine used to treat fever and body ache — was in high demand in January 2022, and came into the limelight with cornering sales of Rs 51.79 crore or about 23.4 million strips, as per Pharmasofttech AWACS, a pharma market research company. In the 12 months of January to December 2021, Dolo 650 clocked sales of Rs 417 crore (about 189.4 million strips) as per AWACS.

Read More: Dolo-650 maker Micro labs bribed docs with Rs 1000-crore freebies? “Not Correct”, concludes IPA

2022-09-10 02:35:13

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