Don’t Call it Bribery – And Whatever it Was, Abbott Stopped Doing in (In India)
From now on, physicians in India should no longer count on receiving coffee makers, vacuum cleaners, shoes, scanners, steam irons, beaded car-seat covers or antique pens from sales reps working for Abbott Laboratories (ABT). Responding to unflattering publicity, the drug and device maker has issued an edict to temporarily suspend such gift giving, Reuters reports.
The decision was revealed in an October 11 e-mail from Sudarshan Jain, managing director of Abbott Healthcare in India. “Only Abbott-approved clinical/scientific literature may be distributed to current and potential customers,” he wrote, according to Reuters. “No brand reminders or therapy reminders in your possession should be given to any current and potential customer and no further brand reminders or therapy reminders should be ordered.”
The move comes less than a month after the news service featured Abbott in a piece about the lengths that some drugmakers will go to entice doctors in India to prescribe their medications. The story highlighted how Abbott published a list of items that can be given to doctors in a sales-strategy guide for the second quarter of 2011 that was distributed to reps.
As an example, the guide cited Nupod, an Abbott antibiotic, and listed a medical textbook, a mosquito repellant and a coffee maker as incentives for doctors. There was also a script for reps to follow: “Dr presenting you advanced coffee maker from Philips which will make coffee within three minutes… Dr in the box we have made advancement easy for you by giving the ideal usage guidelines of the coffee maker… Dr I look forward for advancement in action i.e. our Nupod brand… Dr can get just 3 Rx per day for Nupod,” Reuters wrote.
Drug makers are targeting developing companies for growth, as patent expirations on existing blockbuster drugs and a failure to develop new blockbusters hampers their growth in traditional markets. Companies like Pfizer (PFE), Merck (MRK), GlaxoSmithKline (GSK), Sanofi (SNY) and Novartis (NVS) all face slowing revenue growth.
The Abbott episode helps explain why India’s drug controller wants to prohibit medicines from being sold under brand names in a bid to accelerate the sale of lower-cost generics. Under a plan proposed this onth, all drugmakers applying for a license to market or manufacture fixed dose combination drugs will have to submit the generic name and not the brand names In fact, states have been ordered to stop issuing licenses for the manufacture or sale of drugs under brand names (see Pharma news).
Under Indian law, doctors are prohibited from accepting cash, gifts or travel from drug companies, Reuters notes. But enforcement is apparently rare, even though the practice has generated controversy and scorn in the US and elsewhere. Last week, for instance, the Medical Council in Ireland told doctors not to allow drugmakers to pay for their trips to conferences, the Irish Times reported.
To read the remainder of this article, go to Pharmalot.
Ed Silverman is the editor of Pharmalot and a contributor to YCharts, which includes the just-released YCharts Pro Platinum for professional investors.
Read more articles about: Company Analysis
Timeless thoughts for serious business minds
- pharma stocks
- tech stocks
- stocks that look cheap
- money managers
- stocks that look pricey
- retail stocks
- growth stocks
- earnings season
- dividend growth
- energy stocks
- bank stocks
- short sellers
- warren buffett
- entertainment stocks
- value investing
- executive compensation
- stock screener
- Federal Reserve
- overall market
- stock that look pricey
- value stocks
- cyclical stocks