Income-Tax Department is probing funding of doctors by a Pharma Company

The Income-Tax investigation wing claims to have unearthed a nexus between a leading pharmaceutical company & doctors, and evidence showing payments running into crores to the latter for prescribing the company’s medicines, as per an article published in TOI and ET on Sep 26, 2017.

The IT department, in the past few days, carried out raids at 20 premises of USV India, as well as three reputed doctors in Mumbai, one each in Nagpur & Rajkot. A spokesperson for the company confirmed the raid to TOI, but denied any wrongdoing.

Income tax officers were not willing to go on record, but said the department is probing the role of several other doctors also, who had received payments from the pharma company. An IT officer was quoted by TOI as saying, “In the company’s records, USV has mentioned that the payments were made towards other purposes including educating patients.”

USV India is ranked 18th with sales of Rs 2,360 crore in the organised pharma retail market. The company is a major supplier of diabetes medicines, and is ranked second in diabetes therapy.

The company’s statement to TOI said, “We confirm that an investigation is being conducted by the income-tax officials. At the same time, we would like to reiterate that USV follows all prescribed guidelines and policies while associating with any medical practitioner in India. USV abides by the law of the land and will continue to fully cooperate with the authorities during the investigation process.”

The MCI’s ethics code for doctors made generic prescription mandatory in October 2016 but it has never been enforced. The other method the Centre has of regulating prescription practices is by reining in pharmaceutical companies from offering inducements to doctors to prescribe their drugs. However, the Uniform Code of Pharmaceutical Marketing Practices, which was to prevent such unethical practices, has been hanging fire for two years.

An I-T official was quoted as saying by TOI that their action followed the Centre’s assurance that doctors will prescribe only generic medicines. An I-T official also admitted that they are keeping a close tab on ties between doctors and pharma companies. He said, “There are two issues before the government, first to control the prices, and second is to break the nexus between companies and doctors.” Officials said they recovered a diary and other documents detailing payments to doctors in the recent past, but they declined to disclose the names of the doctors raided.


  1. An article published in TOI site dated Sep 26, 2017. Web Page Link

[icegram campaigns=”1813″]


Leave a Reply

Your email address will not be published. Required fields are marked *