The Uniform Code for Pharmaceutical Marketing Practices 2024: A potential minefield for pharmaceutical companies

• Introduction

  The Uniform Code for Pharmaceutical Marketing Practices (UCPMP) 2024 was notified on 12 March 2024 by the Department of Pharmaceuticals (DoP) of the Ministry of Chemicals and Fertilizers, purportedly to ensure ethical practices within the Indian pharmaceutical and medical device industries.

  The requirement for a revised version of the UCPMP emanated from increased instances of indiscriminatory practices in relation to marketing of pharmaceutical products and non-compliance with taxation laws. Another apparent reason was to ensure transparency and integrity in the interactions between pharmaceutical companies and healthcare professionals.

  UCPMP 2024 provides for strict compliance by Indian pharmaceutical/medical device associations (Association), as opposed to voluntary compliance, under the UCPMP 2014. Despite the DoP’s prima facie intention to enforce the code, the legislative authority behind the UCPMP 2024, and its enforceability, can be questioned.

  While the general provisions on claims and comparisons in marketing material, activities of medical representatives, etc., remain largely unchanged, UCPMP 2024 introduces much-needed categories for legitimate promotional activities and goes on to regulate such activities, such as brand reminders, Continuing Medical Education (CME) and Continuing Professional Development (CPD), conducting conferences and seminars, and support for research activities.

  Overall, UCPMP 2024 provides guidance on the compliances required to be undertaken by pharmaceutical companies and medical devices manufacturers (Pharmaceutical Entity) but lacks details on the practical aspects of implementing such guidelines. This article primarily navigates the key aspects of UCPMP 2024 and its practical implications on Pharmaceutical Entities, starting off with a discussion on its enforceability.

• Enforceability of UCPMP 2024

  The UCPMP 2024 brands itself as a code to be strictly complied with, which is captured in the notice issued by DoP to all Associations, requiring them to circulate it to their respective members for strict compliance. The DoP has also publicly adopted the stance that Pharmaceutical Entities are to strictly comply with UCPMP 2024.¹

  Overall, UCPMP 2024 provides guidance on the compliances required to be undertaken by Pharmaceutical Entities but lacks details on the practical aspects of implementing such guidelines.

  However, the UCPMP 2024 has not been issued under the aegis of any law passed by Parliament or under the Central Government’s rule-making powers under any relevant legislation. Specifically, the Drugs and Cosmetics Act, 1940, and the Drugs and Magic Remedies (Objectional Advertisement) Act, 1954 contain rule-making powers, and require the rules to be laid before Parliament (and the UCPMP 2024 has not been). The UCPMP 2024 does not purport to have been issued under either of these legislations; and even if it had been issued under either of them, it is likely to be considered an overreach of executive authority delegated. It is pertinent to note that rule-making power is typically restricted to the subject matter governed by the principal legislations, which in this case lack the necessary provisions to cover pharmaceutical marketing practices.

  Previously, the voluntary nature of UCPMP 2014 had raised industry concerns, resulting in the Federation of Medical and Sales Representatives Associations of India (FMRAI) filing a writ petition before the Supreme Court of India asking for an enforceable legal framework to be outlined to prohibit unethical marketing practices by pharmaceutical companies. Following the notification of UCPMP 2024, FMRAI has reiterated its concerns regarding the absence of statutory backing and tangible penal repercussions. In its statement, FMRAI has criticised the new code to be ‘old wine in new bottle’ and stating it to be ‘toothless’ on account of it being void of statutory provisions.²

  Without any statutory basis or enforcement mechanism, the UCPMP 2024 may not have the desired effect of curbing unethical practices in the industry. That said, it is advisable that Pharmaceutical Entities adhere to the UCPMP 2024 to ensure that their membership with the Associations and market reputation are not at risk.

• Key highlights of UCPMP 2024 and its practical implications on Pharmaceutical Entities

  • Compliance through Associations

    The UCPMP 2024 requires each Association to ensure its members adhere to it, constitute an Ethics Committee for Pharmaceutical Marketing Practices (ECPMP) and set up a dedicated UCPMP portal on its website to provide details of the complaints and the steps taken for its implementation. While the UCPMP 2024 directs Associations to ensure compliance by their members, the final responsibility for compliance by each company continues to remain with its chief executive officer, who is required to submit an annual declaration of compliance to the Association where it is a member.

    Practical takeaways: This appears to be a tenuous position as a Pharmaceutical Entity may be a member of more than one Association and there is no statutory basis to require compliance. Where a Pharmaceutical Entity is a member of more than one Association, it is recommended that the annual self-declaration is filed by the chief executive officer with each such Association to avoid the risk of non-compliance.

  • Scope of ‘promotion’ defined

    While the UCPMP 2014 did not define ‘promotion’, the UCPMP 2024 adopts the definition of ‘promotion’ endorsed by the World Health Assembly in 1988, which refers to all informational and persuasive activities of manufacturers and distributors, which have the effect of inducing the prescription, supply, purchase and/or use of medical drugs. Accordingly (and consistent with the approach under UCPMP 2014), the UCPMP 2024 prescribes that the promotions must not only be consistent with the relevant marketing approval, but also be balanced, up-to-date, verifiable, and capable of substantiation. The promotion of a drug (or medical device) cannot be misleading in nature, whether by direct or indirect implication.

    Practical takeaways: The definition necessarily encapsulates a wide ambit of activities under the term ‘promotion’. Based on the broad definition, Pharmaceutical Entities may need to tread cautiously while advertising and popularising their products, and in doing so, may need to ensure that all information displayed in the advertisements or promotional material is updated and verifiable. Any changes to such information should be promptly updated in the advertisements or promotional material.

  • Brand reminders to be of limited quantity and value

    The UCPMP 2024 formally regulates the activity of issuing ‘brand reminders’, which specifically include: (a) informational and educational items; and (b) free samples to be used for promotional activities. The provisions regulating product samples in the UCPMP 2014 have been expanded in the UCPMP 2024 to brand reminders as a whole, which is closer to the existing industry practice.

    While the head of informational and educational items have been newly added to the scope of ‘brand reminders’, the scope of these items has been limited to books, calendars, diaries, journals, dummy device models and clinical treatment guidelines, each of which (a) must be for professional use in healthcare settings, and (b) cannot exceed a maximum monetary value of INR 1000 per item. Moreover, such items should not have any independent commercial value for healthcare professionals. Considering the above restrictions, Pharmaceutical Entities must be cautious and avoid any device model which has a separate functional value for the healthcare professional. For example, a dummy model of the stethoscope must not contain any features which enables it to hear the auscultation.

    Limits on quantity and monetary value have also been placed on the distribution of free samples: (a) not more than 12 packs of free samples per drug per year may be distributed, and samples are to be limited to the prescribed dosage for three patients; (b) the size of a sample must not exceed the size of the smallest pack that is commercially available for that drug; and (c) a company cannot provide, in any year, free samples of an aggregate value exceeding 2% of its domestic sales in that year. The pegging of free samples to the domestic sales of a Pharmaceutical Entity is a newly introduced standard.

    Practical takeaways: This provision also prescribes an ‘adequate system of accountability and control’ to be instituted by Pharmaceutical Entities, which appears to translate to an onus on Pharmaceutical Entities to establish a system to track and record the distribution of samples in order to avoid unauthorised access. In addition to unauthorised access, Pharmaceutical Entities must put into place methods to track the permitted quantity and monetary value of free samples distributed to healthcare professionals.

  • Transparency in the conduct of seminars and training activities by Pharmaceutical Entities

    The UCPMP 2024 prescribes strict rules of engagement between the pharmaceutical/medical device industry and healthcare professionals for the purposes of CME, CPD, or other conferences, seminars, etc. (collectively, Events). Among other entities, pharmaceutical companies and their trusts/associations, either alone or in collaboration with professional bodies, are permitted to conduct CME and CPD meetings.

    These Events must comply with the following requirements:

    • Pharmaceutical Entities and any other organisers of the Events must disclose on their website the procedure for the selection of participants and speakers for these Events, as well as a statement of funding sources and expenditures, which may be subject to audits (independent, random, or risk-based). It is unclear whether Pharmaceutical Entities are permitted to appoint doctors as speakers for these Events as the National Medical Commission Registered Medical Practitioner (Professional Conduct) Regulations, 2023 (Ethics Code) specifically prohibits registered medical practitioners from being involved in any third-party educational activity such as CPD, seminars, conferences, etc., which involve direct or indirect sponsorships from Pharmaceutical Entities.
    • All Pharmaceutical Entities incurring expenditures on such Events, including participants and speakers, must comply with the provisions of the Income Tax Act, 1961 (ITA).
    • Events cannot be conducted in foreign locations.

    Additionally, expenditures on Events must adhere strictly to industry-wide ‘well-defined, transparent, and verifiable’ guidelines. Pharmaceutical Entities or Associations may need to collectively articulate such guidelines for expenditure.

    Regarding audits, while UCPMP 2024 contemplates the constitution of a panel of auditors comprising Comptroller and Auditor General of India-empanelled audit firms or reputed commercial audit firms, it is unclear who will initiate the audit, i.e., the Association, ECPMP or the DoP. The DoP has reserved the right to order a special audit when it has received a complaint and forwarded it to an Association for further action.

    Practical takeaways: Pharmaceutical Entities must formulate clear and specific guidelines for determination of speakers, which may involve the field of such speaker, their experience, and contributions to the field, etc. Further, especially in cases of physical Events, Pharmaceutical Entities must maintain proper accounts/records, documenting the sources of funding and the expenditures incurred for organising the Events and appointment of speakers. All such guidelines must be publicly made available over the website of the Pharmaceutical Entities and must be readily accessible.

  • Specific requirements for engagement with healthcare professionals for purposes of research

    The UCPMP 2024 enables research through industry-academia linkage, circumscribed by the following requirements:

    • All research must be conducted after obtaining requisite approval from a competent authority (such as the Drugs Controller General of India) and can only be undertaken at a recognised site or location. While the ECPMP has been named as an example of a ‘competent authority’ for approving such research activities, it is atypical to designate a non-statutory body as such.
    • Healthcare professionals can only be engaged in consultant-advisory roles for bona fide research services under a consultancy agreement, which may provide for a consultancy fee or honorarium, subject to the ITA and the Ethics Code. In this regard, there appears to be a conflict with the Ethics Code, which prohibits registered medical practitioners from receiving consultancy fees under any pretext (whereas remuneration as an employee is permitted).
    • All expenditure incurred on such research is also permitted expenditure under the ITA.

    Practical takeaways: Pharmaceutical Entities must ensure that all permissions and consents are obtained from competent authorities concerned with the specific field of research. Considering that UCPMP 2024 is not enforceable and not passed pursuant to any legislation, Pharmaceutical Companies appointing healthcare professionals for research consultants, should be wary and ideally not offer any remuneration, unless such healthcare professionals are onboarded as employees.

  • No gifts, travel, or hospitality to be extended to healthcare professionals (limited exceptions)

    The UCPMP 2024 substantially retains the language of the UCPMP 2014 on Pharmaceutical Entities (including agents, distributors, and suppliers) being prohibited from offering gifts, monetary grants, pecuniary advantage, or any benefit in kind to healthcare professionals or their family members (whether immediate or extended). Having said this, the code clarifies that travel and hospitality facilities may be extended to speakers (but not delegates or attendees) invited to the CME or CPD programs. The UCPMP 2024 makes a further reference to the amended code of ethics for medical practitioners, i.e., the Ethics Code, to include any items not specifically referenced in the UCPMP 2024 (such as access to entertainment or recreational facilities, etc.).

    Practical takeaways: The position in relation to gifts, travel and hospitality expenditure undertaken by Pharmaceutical Entities is in consonance with UCPMP 2014, with the exception being that travel and hospitality facilities may be extended to speakers of Events. As a standard rule, Pharmaceutical Entities must avoid offering any monetary or non-monetary benefits, either directly or indirectly.

  • Framework for complaints and appeals

    While UCPMP 2014 provided a mechanism for complaints redressal, keeping in mind the current issues plaguing the industry, the UCPMP 2024 provides an enhanced, robust framework to be followed by Associations, which includes procedures for lodging and handling of complaints by their respective ethics committees, strict timelines for conducting inquiries and rendering decisions, as well as a forum for appeal. The salient features of the framework are as follows:

    • Each Association must maintain utmost transparency on the receipt, handling, and details of the complaints on its website, and retain such information for a period of at least five years.
    • Complaints must be made within a period of six months (extendable by another six months with a written explanation of the reason for delay) of the alleged breach, and orders thereon must be issued by a majority vote of the ECPMP within 90 days of the complaint. Complainants cannot be anonymous and must submit signed statements to the relevant Association.
    • For complaints against Pharmaceutical Entities that are not members of any Association, complaints will be handled by the Association, which is in receipt of the complaint, in accordance with any guidance issued by the DoP.
    • The managing director or chief executive officer of the Pharmaceutical Entity accused of violating UCPMP 2024 will be required to furnish a complete response to the relevant complaint before ECPMP.
    • Any ECPMP can also take suo motu cognizance of media reports alleging a breach of the UCPMP 2024 and treat them as complaints.
    • All appeals will lie before the Apex Committee for Pharma Marketing Practices (ACPMP) established by the DoP within 15 days of the decision (extendable by another 15 days) issued by the ECPMP, and such appeals shall be decided by the ACPMP within six months.

    Practical takeaways: Consistent with other aspects of UCPMP 2024, the managing director or chief executive officer is responsible for compliance with the code. Considering that ECPMP may take suo motu cognizance of breaches of UCPMP 2024, Pharmaceutical Entities must attempt to strictly comply with the aspects set out above. Based on the stance of the DoP on strict compliance of UCPMP 2024, it is expected that ECPMP may take suo motu cognizance of non-compliances.

  • Penalties for non-compliance

    The UCPMP 2024 lays down the following consequences for the contravening entity, which the ECPMP may impose:

    • public reprimand;
    • suspension or expulsion from the relevant Association;
    • issuance of a corrective statement;
    • recovering money or items given in violation of the UCPMP 2024; and
    • the ECPMP sending its recommendations to relevant authorities having jurisdiction over disciplinary, penal, or remedial actions for the violation.

    Practical takeaways: These are not penal provisions, and as discussed above, it appears that the DoP is looking to leverage the influence that Associations exert over their members. The DoP has also indicated that compliance will be achieved by the ‘name and shame’ policy, i.e., a Pharmaceutical Entity will be called out and publicised for its purported non-compliance with UCPMP 2024.³

• Key compliance requirements

  While some aspects of these requirements are covered above, Pharmaceutical Entities must now implement practical measures to comply with the added stipulations of UCPMP 2024, including:

  • developing and establishing internal protocols for disclosure of expenses and selection of speakers in respect of Events, and making the same available over their website;
  • increasing stringent checks and balances, including monitoring and reporting, at each stage in the supply of product samples to healthcare professionals;
  • further training medical representatives on interactions with healthcare professionals (especially on regulating supply of product samples), and ensuring they have a strict contractual obligation to comply with the terms of the UCPMP 2024. Companies may consider requiring a periodic declaration by medical representatives of their knowledge and compliance of the UCPMP 2024; and
  • ensuring that a declaration by the chief executive officer of a pharmaceutical company is filed with the pharmaceutical association of which it is a member. If such company is not a member of any pharmaceutical association or a member of more than one such body, such declaration must be uploaded on the UCPMP portal of the DoP. The deadline for submitting this self-declaration was 30 June 2024.⁴

Despite claiming to be strictly enforceable, it is arguable that the code lacks statutory validity. In this context, the UCPMP 2024 seems to be closer to a self-regulatory framework, which by itself is not a bad outcome if pharma companies decide to toe the line.

• Looking ahead

  The FMRAI has, before the Supreme Court, alleged rampant unethical conduct by pharmaceutical companies in India. Recent investigations by Indian tax authorities have also backed up such allegations, ranging from distribution of freebies, gifts and other forms of benefits to medical professionals. While several jurisdictions around the world rely on self-regulation for pharma marketing activities, an enforceable code may just be the need of the hour in India.

  Despite claiming to be strictly enforceable, it is arguable that the code lacks statutory validity. In this context, the UCPMP 2024 seems to be closer to a self-regulatory framework, which by itself is not a bad outcome if pharma companies decide to toe the line.

  Some additional gaps that the UCPMP 2024 has failed to address are as under.

  • The apparent conflict with the Ethics Code ought to be addressed by the DoP at the earliest to prevent a dissonance between compliance with the UCPMP by the industry, and the Ethics Code by registered medical practitioners. This is also necessary to align the UCPMP 2024 with the routine industry practice of engaging registered medical practitioners as speakers and advisors for Events.
  • The degree of transparency offered by companies about Events-related information, especially details of funding and expenditure, as prescribed, remains to be seen. The added stipulation of furnishing a rationale for the selection of participants and speakers for the Events appears to be vague and burdensome.
  • The code fails to impose a system of checks and balances on each promotional activity that a Pharmaceutical Entity may conduct. For example, various European countries have laws in place requiring pharmaceutical companies to appoint a designated employee (who in some cases is required to participate in management as well) for approving promotional communications of the company. This addresses the gap in accountability for the companies. A similar construct could have been implemented by the UCPMP 2024, requiring pharmaceutical companies to employ a professional (an analogy may be drawn with company secretaries) who will authorise any promotional activity.

^[1] Relevant news article can be accessed here.
^[2] Relevant news article can be accessed here.
^[3] Relevant news article can be accessed here.
^[4] Circular No. 1 of 2024, dated 28 May 2024, can be accessed here.

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