Self-Declaration under the UCPMP 2024: Should One Submit

In March 2024, Department of Pharmaceuticals (“DoP”) published a guidance titled ‘The Uniform Code for Pharmaceutical Marketing Practices, 2024’ (“UCPMP”) which lays down the standards for interaction between pharmaceutical and medical device industry and  healthcare practitioners. The UCPMP 2024 replaced a similar 2015 guidance.

More recently, the DoP has issued a Standing Order which implores importers, manufacturers and marketers of drugs and medical devices to submit a self-declaration signed by the seniormost executive of the organization promising compliance with UCPMP. If the entity is a member of an industry association, then the self-declaration has to be submitted to the industry association, and if not, then to the DoP at the email address: dop.ucpmp@gov.in.

In this article, we have examined whether there is any legal requirement for importers, manufacturers and marketers of pharmaceuticals and medical devices to provide self-declaration under UCPMP. We have also examined the consequence of providing the self-declaration and ramification of not providing such self-declaration.

Background to UCPMP Self-Declaration

The UCPMP itself has language which gives the DoP the ability to issue Standing Orders to introduce new guidelines which should be read as if they are part of UCPMP.

Through the Standing Order On 28th May 2024The DoP introduced a new self-declaration requirement in addition to the self-declaration requirement already existing under UCPMP 2024. The UCPMP had a self-declaration expectation under which the seniormost executive of the organization had to declare that the organization had complied with the UCPMP in the financial year (April – March) that had elapsed. The new self-declaration requirement, which was introduced by the Standing Order, now expects the senior executive to undertake that the organization will comply with UCPMP in the ongoing/ upcoming financial year.

Is UCPMP enforceable as a law?

India’s Supreme Court has affirmed that for any circular, order, notification or similar direction issued by any governmental department to be considered enforceable, it has to be issued under the scheme of an existing  legislation.

The UCPMP is neither a legislation nor has it  been issued under the scheme of any existing legislation. Therefore, it should not be considered enforceable as a law in India. In other words, no government department or authority including the DoP should be able to take any action if an importer, manufacturer or marketer of pharmaceuticals or medical devices is unable to comply with UCPMP.

Is a Standing Order issued under UCPMP enforceable as law?

India’s Supreme Court has held that standing orders issued in exercise of administrative powers of any department are only enforceable if such Standing Order(s) are based on powers granted under a parent statute. As indicated in paragraphs above, the UCPMP is not a law. Therefore, a Standing Order issued in pursuance of UCPMP should not be treated as enforceable by law.

Is giving the Self-Declaration mandatory? What are the consequences of not giving the self-declaration?

Since UCPMP is not law and Standing Order issued through it which expects submission of the Self-Declaration is not legally enforceable, there should not be any adverse legal consequence of not giving the self-declaration.

However, if an entity is part of a pharmaceutical or medical device industry association, then the association may suspend or expel the entity from the association for failing to submit the undertaking.

The association and DoP may also take other steps, such as reprimand the entity and require a full apology to be published, however such a step would be disproportional and therefore improbable.

If the self-declaration is submitted, but the entity fails to comply with UCPMP, then what happens?

In general, whether the entity gives the self-declaration (undertaking) or not, the consequences of non-compliance of UCPMP will not change. These consequences are:

  1. Suspension or expulsion of the entity from the concerned pharmaceutical or medical device association of which the entity is member;
  2. Reprimand of the entity;
  3. Requiring the entity to a full apology to be published;
  4. Requiring the entity to issue a corrective statement;
  5. Requiring the entity to recover any sums or articles given or received in contravention of the UCPMP;
  6. Recommending the matter of breach to concerned governmental body having appropriate jurisdiction.

However, if the undertaking is given, and there is a non-compliance of UCPMP, there may be serious consequences.

Consequences of non-compliance with UCPMP after submission of self-declaration

Under India’s penal codes, it is punishable to give a declaration which the person knows is or believes to be false, or does not believe to be true, which is received by an authority as evidence of a fact.

The language of the self-declaration states that the entity shall provide “all required assistance to authorities for the enforcement” of UCPMP.

In the event of any inquiry into non-compliance of UCPMP, if the entity does not co-operate with DoP or panel of auditors appointed by UCPMP, there is a possibility that the DoP may initiate criminal prosecution on grounds of providing a false undertaking that the entity will assist in the enforcement of the UCPMP.

Similarly, if it is established that the entity has breached UCPMP, then DoP may initiate criminal prosecution on grounds of providing false undertaking that the entity shall comply with the UCPMP.

The chance of such prosecution succeeding in trial is not guaranteed however, due to a strong technical defence that exists with every entity who has given the self-undertaking: which is that the undertaking was given without knowledge or belief that it would be treated as ‘evidence of fact’. However, the possibility of a different outcome cannot be completely ruled out.

Tax Consequence of providing the self-undertaking under UCPMP

The Supreme Court has ruled in Apex Laboratories Pvt. Ltd. v Deputy Commissioner of Income Tax (2022) 7 SCC 98 that any expense incurred by an entity in the pharmaceutical or medical device industry, in the course of its dealings with Doctors, that results in an violation of the Indian Medical Council (Professional Conduct, Etiquette and Ethics) Regulations, 2002, in the hands of Doctors, will be an expense impermissible for deduction under Sec. 37(1) of the Income Tax Act, 1961.

The Supreme Court, however, has not ruled that any expense incurred in its dealings with Doctors by an entity in  pharmaceutical or medical device industry which may be in violation of the UCPMP will also be an expense impermissible for deduction under Sec. 37(1) of the Income Tax Act, 1961.

The recent amendment to Sec. 37(1) of the Income Tax Act, 1961 which has given “guidelines” the status of law such that any expense incurred in violation of “guidelines” would also be an expense impermissible for deduction, would not extend to UCPMP even though it is a “guideline”, because the scope of the term “guidelines” under this provision may include only those guidelines which apply to the receiving party of any expense sought to be deducted under Sec. 37(1), in the current fact scenario: Doctors. By implication, it would not cover any other guideline such as UCPMP which may apply to the pharmaceutical and medical device industry.

Therefore, the current position of law is that an expense incurred in violation of the UCPMP will be inadmissible for deduction only when the violation also results in a violation of the Indian Medical Council (Professional Conduct, Etiquette and Ethics) Regulations, 2002, or any other law or guideline. However, if the self-declaration is given by an entity then it may vitiate defences available in proceedings before the tax authorities.

Conclusion

It is clear that UCPMP is not law and therefore non-submission of self-declaration \by itself should not result in any legal action.

In fact, submission of the self-undertaking may invite more serious repercussions as opposed to non-submission of the self-undertaking. Therefore, the importers, manufacturers and marketers of pharmaceuticals and medical devices should adopt a cautious approach to submitting the self-undertaking under UCPMP.

TOP 5 HEALTH LAWS AND POLICY UPDATES

Dear Reader, we are happy to share the most interesting legal and policy updates concerning health industry that we read today. We hope you enjoy reading it.

1. The State Excise Department of Orissa has recently issued a notification to declare separated leaves of the Cannabis plant, also referred to as Bhang, as “intoxicant” under the State Excise law. Prior to this notification, Orissa was one of the few states where Bhang was not regulated as intoxicant.
Source: bit.ly/46J2NVn

2. India’s drug price regulator, NPPA, has rejected a price revision plea of a manufacturer of drug on grounds that it had failed to communicate revision of prices of the drug in Form II of Drugs (Prices Control) Order, 2013 within prescribed timeline of 15 days.
Source: bit.ly/3M6bBuX

3. The Bombay High Court has observed that an egg/ sperm donor in an in-vitro fertilization scenario cannot seek the same rights as a parent.
Source: bit.ly/3YQVPeO

4. All entities who are not registered as telemarketers will not be able to make promotional calls. If any complaint is received against such entity, then it will be blacklisted for two years.
Source: bit.ly/3AsgYSM

5. The Telecom Regulatory Authority of India, the country’s internet and telecommunications regulator has issued an order to telecom and internet service providers to disconnect and remove access for unregistered telemarketers who are carrying out voice-promotional calls. Once disconnected, such persons shall be required to submit a compliance report within 1 week, and may be given an opportunity to register with the TRAI.
Source: bit.ly/4dD3eCE

 

TOP 5 HEALTH LAWS AND POLICY UPDATES

Dear Reader, we are happy to share the most interesting legal and policy updates concerning health industry that we read today. We hope you enjoy reading it.

Insurance Regulator Removes Barrier to offering Insurance Policy to Senior Citizens among other underserved demographics
India’s Central level Insurance regulator the IRDAI has recently issued the Insurance Regulatory and Development Authority of India (Insurance Products) Regulations, 2024, where it has removed the barrier to insurance for persons over the age of 65 years. Previously, persons defined as “Senior Citizens” were not catered to, in terms of fresh insurance policy offerings.
Source: bit.ly/3JsNLIj

Pharmacists who were not personally dispensing medication at pharmacy penalized by Karnataka Pharmacy Council
The Executive Committee of the Pharmacy Council of the Indian State of Karnataka, by exercise of powers under Section 36 of the Pharmacists Act, 1948 has decided to take disciplinary action against certain Pharmacists for violation under Section 42 whereby only Pharmacists are permitted to dispense medication. It was found that several Pharmacists in the state were absent from their posts and had only been registered with their pharmacies for namesake.
Source: bit.ly/3QB2jtJ

Consumer Affairs Ministry has urged FSSAI to initiate Action against major food manufacturer for high sugar content in infant formula
India’s Central Consumer Affairs Secretary, in a recent letter to the Central Food Regulator (FSSAI), has urged it to initiate action against a major food product manufacturer, in light of the recent serious allegations regarding the heightened sugar content in the infant formula the company has been marketing in India.
Source: bit.ly/3xUo0Ox

India’s Central Bank has published Draft Circular regulating Point-of-Sale Payment Aggregators: Requiring compliance with Guidelines for online Payment Aggregators
India’s Central Bank, the Reserve Bank of India, has issued a Draft Circular for regulation of Payment Aggregators providing point-of-sale services, whereby, within 3 months of publication of final version of this Notification, all entities that are currently providing such services will be mandated to adapt and comply with all requirements concerning Guidelines on governance, merchant on-boarding, customer grievance redressal and dispute management framework, baseline technology recommendations, security, fraud prevention and risk management framework, as provided in a prior Notification on Regulation of Payment Aggregators and Gateways published in 2020.
Source: bit.ly/3U7NwY7
Source: bit.ly/3w55rHa

EU may revise categorization of Personal vs Commercial Confidential Data in Marketing Authorization Process
The European Union Regulator has begun consultation regarding an update to the current regulation surrounding what constitutes Personal data vs Commercial Confidential data in respect of protecting business secrets in marketing authorization applications submitted by pharmaceutical and medical devices companies.
Source: bit.ly/3JvpCRA

TOP 5 HEALTH LAWS AND POLICY UPDATES

Dear Reader, We are happy to share the most interesting legal and policy updates concerning health industry that we read today. We hope you enjoy reading it.

Corporate hospitals may soon have to comply with advertisement norms applicable to doctors

India’s National Medical Commission (NMC), which regulates the conduct of medical practitioners (doctors), has endorsed the position that all hospitals should comply with the same standards of ethics as are applicable to doctors under the NMC Registered Medical Practitioner (Professional Conduct) Regulations, 2023. The operation of 2023 Regulations is currently under suspension.
Source: bit.ly/3vpJ7aV

High Court imposes damages of 244 crores in Standard Essential Patents case

India’s Delhi High Court has reportedly imposed damages amounting to INR 244 Crores on an Indian smartphone manufacturer. The Court found smartphone manufacturer guilty of infringing seven patents on 2G, EDGE, and 3G technology granted to a global telecom company. The order is expected to be out soon.
Source: bit.ly/3TxOXyI

Drug Manufacturers will have to upload all product details on Government portal soon

The Drugs Consultative Committee (DCC), a committee comprising State-level Drug Regulators, has recommended that the Central Drugs Regulator, Central Drugs Standard Control Organization (CDSCO), should set a deadline for manufacturers of drugs to upload list of drugs manufactured on an online portal called SUGAM.
Source: bit.ly/3TxP0uo

Ban on trade of ferocious dog breeds has been stayed in various States in India

India’s Kerala High Court, Karnataka High Court and Kolkata High Court has stayed a controversial circular of the Central Government which prohibited import, trading and selling of 23 breeds of dogs identified as ferocious in the circular. The circular also mandated sterilization of dogs from further breeding as pets. The circular has been challenged on the ground that it is unscientific, not based on evidence and has been issued without consultation with relevant stakeholders.
Source: bit.ly/3TVZcyi

European Medicines Agency urges sponsors of clinical trials to register on new portal before January 2025 deadline

The European Medicines Agency (EMA) has strongly advised sponsors of clinical trials that have been approved before 31 January 2023 to submit application to move the clinical trials to the new Clinical Trials Information System (CTIS) as soon as possible, considering it will take EMA up to three months to review and authorize the application. As of now, only 20% of clinical trials have been moved to the new platform.
Source: bit.ly/3TZRzHl

UCPMP 2024 – Highlights and Summary of Key Differences from UCPMP 2015

India’s Department of Pharmaceuticals (DoP) has published The Uniform Code For Pharmaceutical Marketing Practices, 2024 (UCPMP 2024). The UCPMP is a code that governs the interaction between the industry and healthcare practitioners (HCPs/doctors) in India. The UCPMP 2024 replaces the UCPMP 2015, and is applicable to both pharma and medical device companies.

In the paragraphs below, we have summarized the business-critical changes between UCPMP 2024 and UCPMP 2015.  The expression ‘company’ refers to both pharma and medical device companies, unless the context suggests otherwise.

Enforceability: The UCPMP 2024 is ‘kind of’ ‘somewhat’ mandatory. The text of UCPMP 2024 does not carry the word ‘voluntary’ as UCPMP 2015 did, but at the same time, it also does not have any statutory backing. It appears that the DoP is planning to enforce it through ‘audit’ mechanism. Under UCPMP 2024, DoP has the power to order an audit of any company upon receipt of a complaint of violation of UCPMP 2024 against the company. In case the audit proves a breach, the DoP may ‘recommend’ appropriate government agencies (such as the Income Tax Department and the National Pharmaceutical Pricing Authority) to take action against the company. An appellate body, which is headed by the Secretary, DoP, also has the power to ‘prescribe’ penalties to defaulting companies. Separately, the CEO of the company has to give an undertaking that the company shall abide by UCPMP 2024 will extend all assistance to ‘authorities’ for its enforcement.

Medical Education and Training: Companies can sponsor or organize conferences, workshops and trainings for doctors by themselves without having to necessarily collaborate with another entity, such as an association of doctors. Such conferences, workshops and trainings cannot be held outside India. The details of such events and expenses incurred by the company will have to be published on the company’s website. The record of these expenses may be audited by auditors appointed by the DoP. If the DoP auditors find discrepancies in the records, they will bring them to the attention of appropriate government agencies and authorities.

Hospitality and travel: During conferences and workshops, all doctors including delegates may be served modest meals. However, delegates cannot be offered travel facilities. Speakers may be offered both hospitality and travel facility.

Brand reminders: A company may supply doctors with informational and educational materials such as e-journals and dummy device models as brand reminders, provided that the total worth of each item does not exceed Rs. 1000. There is no cap on how many brand reminders can be given to the doctor. However, a brand reminder should not have an independent commercial value for the doctor.

Engagement of HCPs as a Consultant: Companies can continue to engage doctors as consultants for research, but the research has to be ‘bona fide’. The DoP is expected to provide more clarity on this issue.

Monetary grants: Companies cannot offer monetary grants under any pretext now, including for educational purposes to doctors who are pursuing training, residency, or fellowship.

Sample packs: A company may offer a doctor up to 12 sample packs of medicines each year. However, these sample packages should be properly marked as ‘not for sale.’ The monetary value of samples distributed by a company should not exceed 2% of its domestic sales.

Further changes to UCPMP 2024: The DoP has reserved powers to modify or limit the scope of UCPMP by issuing standing orders from time to time.

It is important that industry takes cognizance of the changes because any non-compliance with UCPMP 2024 may negatively impact a company’s industry standing and perception amongst doctors.  India’s tax department has also been disallowing any expenses which have been incurred in contravention of UCPMP, so a mistake may prove very expensive.