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07/07/2022 - Judiciary

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July 07, 2022

The recent judgment by Supreme Court related to freebies of medicines to doctors will help checking unethical and illegal practices in the pharma sector. Discuss (200 Words)

Refer - The Hindu

Enrich the answer from other sources, if the question demands.

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IAS Parliament 9 months


·        The judgment by a two-judge Bench of the Supreme Court of India in M/s Apex Laboratories Pvt. Ltd. vs Deputy Commissioner of Income Tax, has struck a blow for public good.

·        Upholding a decision by the Madras High Court, the Bench said that the act of pharmaceutical companies giving freebies to doctors is clearly ‘prohibited by the law’.

·        Pharmaceutical companies’ gifting freebies to doctors, etc. is clearly ‘prohibited by law’ and not allowed to be claimed as a deduction under Section 37(1).

·        The uncovered field in this judgment  and it was not the controversy in hand before the Court  is the sale of medicines at Maximum Retail Price, or MRP.

·        This is a scam and a case of underhand dealing that happens in the pharma world (the giving away of freebies is a smaller part of it) because drugs are invariably sold in pharmacist shops at MRP only.

·        Even though the Drug Price Control Order and Drugs and Cosmetics Act are there on the statute book, there is hardly any action to keep the sale price of medicines under control with due and proper investigation.

·        It should be debated and applied to other unethical practices and expenditure out of public funds. The strategy here should be to use financial tools such as income-tax provisions for disallowing such expenditure and taxing the same as perquisites or taxable income.

Nandhini Vijay 9 months

Recently,  a company has given freebies to doctors to promote awareness about their health supplement product named zincovit .

JUDGEMENTS : * Court laid emphasis on the unethical practices of providing freebies in pharma sector which was prohibited in law under Indian council  medical regulations 2002.

* Loss of fiduciary relationships between doctor and patient as the prescription is manipulated for profit.


* There are no proper checks and balances to regulate the prices of medicines sold in the market.

* Presence of drugs price control and drugs and cosmetics act hardly acts and take steps to monitor the price control mechanisms.

* Most of the products are sold at maximum retail price.

Way forward: *The Parliamentary Standing Committee on Health  also highlighted the same issues in its report. 

Therefore, the parliament should amend law in order to compel the drug manufacturer to sell their pharma products at the verified genuine cost. This should also factor in a reasonable profit margin for each product. There must be a uniform rate throughout the country.

Further, classified life-saving drugs should be sold at cost only or even at subsidised rates.

The government can use financial tools such as income-tax provisions for disallowing such expenditure etc.

IAS Parliament 9 months

Good attempt. Keep Writing.



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