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Frequently asked questions (FAQs) regarding filing of self-declaration and disclosure of marketing expenditure by medical device companies in India under UCMPMD

Introduction

The Uniform Code for Medical Devices Marketing Practices, 2024 (UCMPMD) requires all medical device companies in India to submit a self-declaration-cum-undertaking from its CEO (“Self-Declaration”) and a disclosure of marketing expenditures in a prescribed format (“Marketing Expenditure Disclosure”).

As part of Marketing Expenditure Disclosure, the medical device company has to disclose the expenditure incurred by it on free evaluation samples, Continuing Medical Education (CME) event/Continuing Professional Development (CPD)/Seminars and such other events conducted by the medical device company or organized through third parties such as professional associations of HCPs. When a medical device company conducts a CME/CPD event, information relating to the associated expenditure must be disclosed on the company’s website. However, if such an event is organized by a third party, details of the expenditure, along with a statement of funding sources, must be published on the organiser’s website.
The self-declaration and expenditure disclosure for any financial year have to be submitted anytime before the expiry of two months from the end of every financial year. Accordingly, the deadline for filing the declaration is May 31, 2025 for the financial year 2024-25.
In this article, we have sought to respond to some of the frequently asked questions about these compliances.

1. Where is the self-declaration and disclosure of marketing expenditure form required to be submitted?

The Self Declaration is required to be submitted with the industry association of which the medical device company is a member. The Self-Declaration, once submitted to the association, will get published on the website of such industry association.

If a medical device company is not part of any association, or is part of more than one association, it can submit the self-declaration at dop.ucpmp@gov.in.

In addition, the Self-Declaration and Marketing Expenditure Disclosure are required to be submitted on the UCPMP Portal of the Department of Pharmaceuticals (DoP). The said portal was not functioning at the time of publication of this article.

2. Is it legally mandatory to submit a self-declaration and disclosure of marketing expenditure?

While UCMPMD is not a law, we understand that various medical device associations have taken interest in enforcing compliance of the UCMPMD among its members. If a medical device company is not a member of an association, then there may not be any real consequence for it if it fails to submit a Self-Declaration and Marketing Expenditure Disclosure.

3. Is the requirement of submission of self-declaration and disclosure of marketing expenditure applicable to only importers or manufacturers of medical devices or to marketers and distributors of medical devices as well?

The UCMPMD applies to any medical device company which is engaged in activities covered by the UCMPMD, including promotion and marketing of medical devices, and therefore applies to not just importers and manufacturers , but also to marketers and distributors of medical devices.

4. Do small and medium-size medical device companies have to submit self-declaration and disclosure of marketing expenditure?

Small and medium-sized medical device companies are not exempt from applicability of UCMPMD. Therefore, they should also submit the Self-Declaration and Marketing Expenditure Disclosure.

5. What happens if a medical device company does not submit self-declaration and disclosure of marketing expenditure?

If a medical device company fails to submit the required Self-Declaration and Marketing Expenditure Disclosure, it may face disciplinary action from its industry association. Such actions can include suspension, expulsion, public reprimand, or the requirement to issue corrective statements. Please note that there are no direct and upfront legal consequences for non-submission.

6. If a medical device company CEO submits a self-declaration of compliance with UCMPMD but it is later found that the company has not complied with UCMPMD, will there be any personal consequence for the CEO of the Company for giving a false declaration?

No. There should not be any personal consequences for the CEO of the medical device company, in case it is later discovered that the medical device company has breached the UCMPMD. While the UCMPMD states that “the Chief Executive Officer is itself responsible for the adherence to this Code”, the UCMPMD itself does not stipulate any penalty or consequence for CEO in case of non-adherence , and Indian Courts have repeatedly held that the CEO is not liable for acts or omissions of the Company unless there is a causal connection between CEO and said acts and omissions (for example, where they have knowledge of breach or consent to specific acts or omissions by the company).

7. Is it mandatory to co-operate with regulatory authorities in any enforcement or regulatory action after giving an undertaking to that effect?

The Self-Declaration contains an undertaking that the medical device company will extend all required assistance to authorities for the enforcement of the UCMPMD. However, if for any reason, the medical device company does not wish to co-operate with the authorities, then there should not be any legal consequences for the medical device company for doing so. The consequences, if any, may arise at the level of industry association (refer response to FAQ 5) or from an optics perspective where non-co-operation despite promise may be perceived as evidence of wrongdoing or guilt.

8. What if a medical device company submits incorrect or incomplete information in the disclosure of marketing expenditure?

The Marketing Expenditure Disclosure form contains a reference to Section 405 of Companies Act, 2013 which provides for punishment in case the information provided is incorrect or incomplete in any material respect. However, from legal perspective, it appears highly improbable that Section 405 can be used by authorities against a medical device company for submitting incorrect or incomplete information, because Section 405 has certain pre-conditions for enforcement which are not met by UCMPMD. Moreover, Section 405 can only be used against companies, and not proprietorships or partnership firms.

Please note, however, that any information (including incorrect or incomplete information) may be flagged to regulators including tax authorities which may result in tax related consequences.

9. Are the costs of sponsorship of speakers who are HCPs required to be disclosed?

It depends. The Marketing Expenditure Disclosure requires disclosure of cost of sponsorship of CME events organized by company or sponsored by company (and organized by third party).

If a medical device company has budgeted expenditure towards cost of travel and hospitality of HCPs in events either organized or sponsored by it, then it ought to be disclosed. However, it ought not to be disclosed as a separate line item (only aggregate total expenditure ought to be disclosed).

If, however, a medical device company has sponsored costs of travel of HCP who is a speaker, at an event that is neither organized or sponsored by it, then such an expenditure is permitted and may not have to be disclosed.

10. Are the costs of travel and hospitality of HCPs who are consultant required to be disclosed?

No. The disclosure requirement does not extend to travel and hospitality costs for HCPs who serve as consultants or advisors under a valid contract, since such engagement with the HCP are permitted and also falls outside the scope of CME,CPD events.

11. Are the costs of travel and hospitality of HCPs who are customers required to be disclosed?

The costs of sponsoring travel and hospitality of existing or potential customers of medical equipment, who happen to be HCPs, is a grey area under UCMPMD. However, the disclosure requirement specifically extends to payments or support for CME, CPD, training, seminars, conferences, and workshops. Applying the principle of ejusdem generis, only those payments or benefits that are similar in nature to CME, CPD, training, seminars, conferences, or workshops fall under the disclosure requirement. Therefore, costs of travel and hospitality of HCPs who are customers may not be required to be disclosed.

12. If the foreign affiliate of the medical device company has sponsored the cost of travel and hospitality of the HCP, are such costs required to be disclosed?

The UCMPMD does not apply to foreign affiliates of medical device companies. So, if a foreign affiliate of a medical device company sponsors travel and hospitality of an Indian HCP, whether for India or International travel, it should not be governed by UCMPMD. Please note that there is a principle of law which states that what cannot be done directly cannot also be done indirectly. Therefore, the medical device company in India shouldn’t use (and shouldn’t appear to be using) foreign affiliate to pay for travel and hospitality of Indian HCPs.

13. Are commercial packs which are provided free of charge (FOC) to customers for demonstration or commercial evaluation supposed to be disclosed?

The UCMPMD would ideally cover FOC products that are given for demonstration or sample purposes, since such activities may fall within the scope of promotion or marketing. Therefore, such commercial packs may have to disclosed as well.

On a separate note, it is worth nothing that UCMPMD requires companies to maintain detailed records of all free evaluation samples distributed, including the quantities and recipients.

14. Is the expenditure incurred on putting stalls at events or advertisement at events required to be disclosed by medical device companies?

Yes, the definition of “expenditure” is non-exhaustive and includes various forms of actions such as advertising, installation of stalls, and providing souvenirs. Hence, a medical devices company undertaking such expenditures can be said to be organising a CME Event through a third party, triggering disclosure requirements.

[Note: These FAQs are provided for informational purposes based on our understanding of the relevant laws and regulations. They should not be construed as legal advice, professional guidance, or an endorsement of any particular industry practice.]

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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.

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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 Supreme Court, while hearing the Patanjali case on misleading advertisements, has asked the Union of India to respond to a question about whether the clinical trial rules for AYUSH drugs have been diluted, particularly in the context of new indications. The amicus for the Court while presenting the matter proposed strict measures for regulating misleading advertisements, such as the effective use of existing penalty mechanisms, prior approval of ads before issuance of licenses, effective inter-state cooperation, and a tie-up between the GoI and ASCI to address complaints.
Source: bit.ly/4d21OSv

2. The Supreme Court while hearing a petition filed by the Indian Medical Association (IMA) challenging Patanjali Ayurved’s misleading advertisements has directed the Ministry of Ayush to create a centralised dashboard where citizens across the country can access information about the action taken in response to their complaints.
Source: bit.ly/4d35inT

3. The Department of Pharmaceuticals (DoP) has extended the deadline for filing a self-declaration under the Uniform Code for Pharmaceutical Marketing Practices, 2024 (UCPMP) to August 31st, 2024. The prior date for filing the self-declaration was July 31st, 2024.
Source: bit.ly/3LLmm5R

4. The Consumer Product Safety Commission (CPSC) in the United States has reportedly placed responsibility on large e-commerce companies for the sale of dangerous third-party products on its platforms, issuing a directive covering more than 400,000 products that violated flammability standards.
Source: bit.ly/3YtFwom

5. The US Food and Drug Administration (USFDA) warned several giant online retailers about selling unapproved chemical peel skin products and asked them to immediately stop marketing them as they could potentially harm customers. The USFDA issued the directive after determining that the items in question included chemicals in high amounts that necessitated medical care.
Source: bit.ly/4caYQJY

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TOP 5 HEALTH LAWS AND POLICY UPDATES

1. India’s Supreme Court has reportedly asked the Ministry of Information and Broadcasting to appropriately modify the self-declaration requirement imposed by the Supreme Court on all advertisements, such that the consumers remain protected against misleading advertisement, but the industry is not overly inconvenienced in the process of complying with the self-declaration requirement.
Source: bit.ly/3xYqk7C

2. The Supreme Court has ruled that not disclosing critical or material information about safety at the time of promotion of the product amounts to unfair trade practices.
Source: bit.ly/460Duxr

3. Central Drugs Standard Control Organization (CDSCO), India’s drug regulatory authority, is reportedly planning to take action against pharmaceutical companies that fail to implement barcodes or QR codes on the top 300 medicine brands identified by the National Pharmaceutical Pricing Authority (NPPA).
Source: bit.ly/3zJllrU

4. MeDevIS (Medical Devices Information System) online portal, the first worldwide open access clearing house for information on medical devices, was launched by the World Health Organization (WHO). It is intended to assist governments, regulators, and users in making decisions about the selection, procurement, and use of medical devices for diagnosing, testing, and treating diseases and health conditions. MeDevIS refers to two international naming systems for medical devices: the European Medical Device Nomenclature (EMDN) and the Global Medical Device Nomenclature (GMDN), which attempt to maintain data uniformity across borders.
Source: bit.ly/3zJQIm9

5. The U.S. Federal Trade Commission recently stated that a pharmacy benefit managers (PBM), who operate as middlemen between pharmaceutical firms and customers, have an excessive amount of influence over prescription drug costs due to the years-long dealmaking which has ultimately resulted in the consolidation of pharmacies and health insurance companies.
Source: bit.ly/3W0Mhee

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TOP 5 HEALTH LAWS AND POLICY UPDATES

The Department of Pharmaceuticals (DoP) has extended the deadline for filing a self-declaration under the Uniform Code for Pharmaceutical Marketing Practices, 2024 (UCPMP) to July 31st, 2024. The prior date for filing the self-declaration was June 30th, 2024.
Source: bit.ly/4coX09h

The Central Drugs Standard Control Organization (CDSCO is considering making the international nomenclature of cosmetic ingredients (INCI) mandatory on all cosmetic product labels to improve transparency and identification. The unified INCI method will help customers understand product compositions while assisting dermatologists and regulators in monitoring component safety. The move is intended to avoid confusion, improve compliance, and increase the marketability of safe products.
Source: bit.ly/3L6jz6J

A Super Speciality Hospital and one of its doctors were ordered by the State Consumer Disputes Redressal Commission (SCDRC) to compensate its patients for medical negligence. The reason for the directive was that the specialist doctor had given his responsibility to a junior and neglected to attend to the patient, which led to an incorrect diagnosis and treatment, which constituted medical misconduct.
Source: bit.ly/3zrpKQn

The Central Drugs Standard Control Organization has ordered the closure of more than 36% of the 400 drug manufacturing facilities located throughout India after an increase in inspection following deaths associated with substandard cough syrups.
Source: bit.ly/4eKMs5Y

In an effort to regulate false and misleading nutritional claims and health claims made by e-commerce platforms, the Food Safety and Standards Authority of India (FSSAI) is planning to impose stricter controls on advertisement and sale of protein supplements and shakes in India.
Source: bit.ly/45KzjpF