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The Dark Side

Pharma Sales Corruption in India. And How.

I work in research. Early research, pulling-stuff-out-of-thin-air type early drug research. I’m about as far from the commercial end of the companies I’ve worked at as I can be, but it’s the commercial end that pays my salary and keeps the labs running.
But that does not mean that everything that drug companies do to sell drugs is therefore justified. Far, far from it. Unfortunately, I have another entry today that will go into my category tag marked “The Dark Side”. It’s on drug sales tactics in India, which are explored by Frederik Joelving in this article at Reuters. It is not pretty:

The Abbott guide — reps say the company produces them regularly — is evidence of a larger problem in India. In interviews with Reuters, dozens of doctors, drug reps and other healthcare insiders said domestic and multinational drug makers routinely shower Indian doctors with gifts, posh junkets abroad, and cash payments disguised as consultancy or other types of fees.
“Indian CRM,” or customer-relationship management, is what industry insiders call this system of inducements. None of the doctors or reps who described their participation in this trade would speak on the record. Under Indian law, doctors are prohibited from accepting cash, gifts or travel from drug companies. Still, enforcement is rare, and drug makers may lavish gifts on doctors with impunity, though their home countries may punish the practice.
In a country where doctors often make less than $10,000 a year, it can be an effective strategy.

The drug reps apparently have entire catalogs, with the incentive gifts laid out – a coffeemaker for this drug at this prescription level, a new vacuum cleaner over here, cookware, an invitation to a “conference” in Thailand, what have you. And the indications are that even these gifts are being replaced by more direct inducements, such as sheer cash. That’s paid out for being part of a “postmarketing study” that no one controls, whose numbers no one pays attention to, and whose only purpose is to provide cover to pay people off:

Doctors and reps say that often, companies use these studies as cover for paying doctors to prescribe the drugs under study. According to one Abbott rep, the company doesn’t pay doctors if sales at nearby pharmacies don’t increase.
A doctor who has done post-marketing studies in India says the companies rarely monitor the studies or check the data. “We all understand that post-marketing studies are not really true studies,” says the doctor, a diabetes specialist at a Calcutta hospital. They’re “just a way to offer an honorarium. So we also don’t take them seriously.”

Several companies are named in the article – Abbott, Ranbaxy, local Indian drug makers – but the strong impression one gets is that this is how everyone is doing business there, and has for a long time. And that’s a major problem. The sales and marketing people in such situations take this as normal, and no one’s shocked or upset. They should be, though. Treating this sort of thing as no big deal is bad for the culture of a company, and it’s obviously not saying anything good about Indian business culture, either.
I think that there are three levels of corruption. These are distinctions I worked out a while back; see if they make sense. Level 1 is paying people to do something that they wouldn’t normally do. Get me good tickets, bump me to the front of the line, that sort of thing. Level 2 is paying people just to do what was supposed to be their job in the first place (but which they won’t actually perform unless the honorarium is coming). And Level 3 is the worst – that’s when you’re paying them not to harm you. A protection racket, in other words, whether it’s run by the mob or some Russian regulatory agency that might just enforce some little-known tax laws on you if you don’t play ball.
This Indian drug-rep stuff is Level 1 for sure, and probably some Level 2 as well. It wouldn’t surprise me at all if there weren’t some doctors who wouldn’t bother to prescribe a given medicine at all – medical judgement be damned – if the sales reps hadn’t provided the goods. That’s what I mean when I say that no one comes out the better for this – not the companies, not the doctors, not the patients, not the country. India is full of people who realize that the country is being held back by this sort of corruption, that it’s a deadweight loss compared to not having to bribe everyone all the time.
But drug companies are supposed to be full of people who realize that this sort of thing is wrong. That’s a culture of corruption for you, though: paying people off with toasters and trips to Thailand is how you make your numbers, and if you don’t make your numbers, well, they’ll find someone who will. Don’t feel like lugging around a sack of kitchen gadgets and consumer electronics? Don’t be a drug rep in India – simple.
No, this whole thing is disturbing and disgusting. As I said, I spend my time back in early research, thinking up ideas that might turn into a drug one day. It would not make me happy, to put it mildly, to think of a drug that I’d had a part in discovered being flogged via sleazy vacation offers and sets of cookware dumped on a doctor’s office floor. It’s my hope that articles like the Reuters one will bring enough attention (and be the source of enough controversy and shame) to start making a difference.

29 comments on “Pharma Sales Corruption in India. And How.”

  1. r.pal says:

    Nothing in India business or politics or ethics should surprise anybody. As a person born India it is not shocking that corruption is a way of life and is accepted as normal behavior. Since 1950 over $1.4 Trillion is lying in Swiss banks and all this from people in India from every walk of Life. If put to good use it could solve many problems in India overnight but if it happens will be the eight wonder of the world

  2. Noel Mathur says:

    Honestly, your article is NOT even a tip of the iceberg. Ask someone to open up how Clinical trials are performed here, how ‘informed consents’ are obtained. I worked in a phase III clinical trial and our company gave a lot of ‘gifts’ to the doctors so that we can run a trial in their hospital (all government or church hospitals) with an excuse that it is needed for the trial. In 1999, mobile phones were a big thing, every big guy at the hospital got one. Every time, dining in 5-star restaurant was a common thing. There was a reward for making a target for patient inclusion. Free airline tickets for ‘conference’ was very common thing. Although the doctors were getting a HUGE amount for their participation in the trial, 98% were greedy and would make sarcastic comment about the payments. Routine hassles in a trials were very common when their demands were not met. I worked with 84 doctors in a short span that I worked on that trial. Only 3 were found to be following ethics to their heart, rest all were after money. It was very sickening and could not continue working.
    If you don’t do what these companies are doing, their drug will never be sold. Indian medical profession works on something called as ‘cuts’ i.e. if me as one doctor referring my patient to you for consultation, surgery, therapy, even blood work, I need a % of your charges. These charges range from 30% to 50% depending on YOUR needs. Same principle is applied in medicine business as well. Majority of the folks in India are not really aware of medical system and trust the doctors blindly. These doctors just take undue advantage of it. The doctor is the one that makes decision for the patient regarding meds he is going to use and that is where the corruption comes into picture. is an eye opener. It is unfortunately in Hindi and don’t know if they will come up with English subtitles but it touches the very point discussed in this article.

  3. Anon says:

    In the US, how many physicians turned down similar offers in the past? Few…very few. And it wasn’t until gov/public intervention that we began to see a reform in the practice. Unfortunately, many MDs are almost greedy by nature. They are trained to be confident in their knowledge to make the patients feel at ease (regardless of how correct they are) and that their services are extremely valuable and they will always be undervalued (no matter what they are paid). While it is worse in India, similar things occur here except people have become more clever about hiding it. Become a “consultant,” board member, sponsored endowed professorship, conferences, private grant, re-certification courses, etc. it is endless.

  4. Sili says:

    Nothing in India business or politics or ethics should surprise anybody.

    Kind though it be of you to apply blame to your own countrymen, I think it’s misguided to look at it so narrowly. I doubt that India is the only place this sorta thing happens. It may just be the only one with enough of a shred of democracy and liberalism left for this to come out into the open.
    Secondly, India would not suffer this abuse, were non-Indians not willing to apply it. So the blame applies to the briber as well as the bribee. If not more so.

  5. Nekekami says:

    This is hardly a problem that is limited to India. I know it’s prevalent in both north america and europe. I’ve also heard about it from australians.
    Hell, you have even nastier things, such as Merck’s little escapade regarding Vioxx, where they were to “neutralize” or discredit doctors who were not pro-Vioxx.

  6. mucco says:

    Have you read the Arabian Nights paper in the BMJ?

  7. Todd says:

    I’m shocked, but not surprised. Working with various Indian companies over the years, such corruption and mismanagement is considered to be the cost of doing business. If anything, people are surprised by ethical behavior. The country has a lot of issues ahead if they’re going to grow up and compete with the big boys. You can’t have corruption that blatant and get anything done.

  8. Hap says:

    I don’t know enough to say if corruption as cultural, but I’m used to assuming that people and companies anywhere would participate in dishonesty and cheating if they could get away with it. If they can’t get away with it or the costs are high enough, they don’t. It doesn’t seem all that surprising, then, that corruption would happen in someplace trying to sort out exactly how to run an economy.
    I don’t know how much blame to assign to the briber and the bribee. If you wanted to sell drugs in India, your choices were probably either bribe or don’t sell them. If you were taking the bribes, chances are you weren’t being paid all that much (perhaps because of the expectation that you would supplement your income with bribes) and doing otherwise was hard. It makes everyone look bad, wasn’t right, and cost lives, but I don’t really know that anyone deserves a disproportionate share of blame.

  9. Rick Wobbe says:

    Read “What Money Can’t Buy” by Harvard political philosopher Michael Sandel for an eloquent discussion how exuberant application of free market incentives can exert a corrupting influence. This type of thing seems almost inevitable.

  10. Pieter says:

    When reading the article I thought it was about the relationship between business and the American Congress.

  11. Esteban says:

    Someone I knew socially in regulatory at my previous company said that when he met with a Chinese regulatory official, it was customary to bring a gift. After my initial shock (I was naive back then), I said “But isn’t that bribery?”, to which he said nothing.

  12. Anonymous says:

    Derek, you and others may not like this question but………
    When you get right down to it, which level of corruption you referenced above is it when you make your living on the backs of sick people? And I’m not casting stones here at you or anyone else because I’ve worked many years, in the past, for profitable pharmaceutical companies and now for one that hopes to be one someday. But I’ve never deluded myself that that was what I was doing. I made a living off the fact that people get sick and need to pay money to get better. Lesser of two evils type of living, I guess. Like you, I work in drug discovery.
    But at some level, making a living off the backs of sick people who will have to pay for what you discover is sort of corrupt too when you get right down to it? Or at least, I think so. Why isn’t medicine free? We don’t care about our fellow humans enough to provide it just because it’s probably the right thing to do? No, we don’t. But it also pays the bills. And I don’t get food, water, healthcare, etc. for free either.
    But we’re sort of a pathetic, selfish, despicable species when you get right down to it. (And self-examination isn’t our strong suit.) Your article is a nice case study though. I suspect that these sales people and doctors hide behind the same mask that all of us do. Their mask is sort of easy to see through, that’s all. Ours is easier to hide behind.

  13. ayatollahOfTheOutcomes says:

    @12: Dude you’re a commie. Based on your stuff, selling food, would be tantamount to corruption. Most of us are alive today largely because this reward based system for innovation exists. Based on how this world(outside the US) works, I don’t think you should either think you’re corrupt, or think you’re too exalted based on your profession. A large fraction of us do stuff, because of stuff we did before (which built a reputation for the stuff we do). Few of us have the privilege of choosing a profession. Given that, and a system like India where implementing justice is next to impossible, it takes someone with very strong values, not to be corrupt. You gotta live there to understand that. And trust me, your values truly get tested only when you live in that kind of system. Though it’s no excuse for the stuff Derek spoke about.

  14. DOS says:

    Of course this happens in the US too, only behind locked doors and in hushed tones. And it involves congressmen and CEOs instead of local doctors. And instead of millions it involves billions of dollars. As they say, if an ordinary doctor does it he is called unethical, if a millionaire does it he is called a politician or senator.

  15. budha in the USA says:

    Derek is clewless. That — corruption is rampant in India is not NEW or News. Corruption is rampant in Asia as a whole (take any country, from the middle east to the far east — this is how things are done over there). But you guys — that act holier than though — dont see the “LEGAL CORRUPTION” going on right under your own nose in the US and the rest of the western world !!! I would suggest an analysis of the real impact of all the so-called “INNOVATIVE DRUGS” peddled by the BIG PHARMA (that ironically end up paying your salaries to carry out “research” Ha !!). Secondly, under the guise of great medical care — HIGHLY EXPENSIVE TAB for health care in the US — does that disgust Derek ??

  16. Anonymous says:

    @ayatollahOfTheOutcomes – “Most of us are alive today largely because this reward based system for innovation exists.”
    No, I am alive today because I have food to eat. I grew up as an American in a country where at least half of the people were starving each and every day. I watched it each and every day and I watched them die. I lived next to them. And they begged each and every day for food since I had it and they didn’t. I am not alive because of a “rewards based system for innovation”. I am alive because I have access to food. Do you understand this very simple fact? I suspect that you don’t.
    As I said, we are not a species that is good at self examination. But you did a great job of making my point. Thanks.

  17. Budha in the USA says:

    Health-care in the USA is a racket. Medicare’s bloated budgets are a consequence. High cost of healthcare is a consequence. Obamacare is a consequence. If one does not have employer provided health insurance, can you afford to live in the USA ??? Even the employers cannot afford the health-care in the USA !!! Isn’t that the real reason that Research, Clinical trials are outsourced to countries like India and China — Knowing full well that corrution exists.
    In India, even a common man with modest resources can afford health care. This is real Democracy. Democracy in the USA is a Racket. Disgusting ?? I know how you feel and my sympathies with you. O’ Canada !!

  18. Zak says:

    Call me a moral relativist, but I don’t think US firms should be seen negatively for paying bribes in countries where bribes are an integral part of the culture. If that is the normal cost and way of doing business in those countries, it is completely unrealistic to assume that US countries would not follow the rules on the ground.
    If doctors EXPECT bribes as the normal way of doing things, and not complying would put US businesses at a disadvantage because they were playing by foreign rules, things would never get done.

  19. Singaporean says:

    The problem is embedded in the whole system of prescribing and selling drugs. As long as you have a doctor as middle man, drug companies will always try to influence him, because he has the power to supply drugs. This approach is totally flawed because the patient has no incentive to take responsibility and the doctor has no incentives to prescribe the best medication. In my eyes all drugs, that are non-addicting, should be prescription free. Moreover I would abolish the whole system from Phase I to III and FDA approval. It should be in the interest of drug companies and doctors to come up with the fasted and most efficient way to develop and test the safety of drugs. In the end, the patient has to decide, if he takes the risk or not.

  20. troggy says:

    This is beyond ridiculous. I hope you are trolling. The concept of health care is not inherently evil.
    If you are selling something that makes people sick (e.g. tobacco), perhaps an argument for immorality would be justified. But, if you have devoted your career to finding cures to awful illnesses (which for the most part have been with humanity for a long time), and preventing the sickness and suffering that has been pervasive over history – that is not immoral.
    And if you take a paycheck for it, such that you can feed yourself, and your family? It’s still not immoral.
    And if you discover some things that can help scientific progress in general, so much the better.
    Furthermore, if the “sick people” didn’t want treatment, there wouldn’t be anyone making money “off their backs.” However, I know that if I am dying of cancer one day – I will happily pay if someone can provide a functional treatment. Even if it is expensive. I suspect most people are the same.
    The problem comes when the treatment is not what is promised, or when access to that treatment, is unreasonably restricted – either through inefficient govt. bureaucracy (e.g. Canada), or a corrupt and overly expensive private system (e.g. India), or both (e.g. United States – though neither to the same degree maybe). That is what these discussions are all about – and it is absolutely worth trying to be better in this regard.

  21. Troggy says:

    How, exactly, is removing regulation and making “the patient decide, if he takes the risk or not” going to help with this. The issue here (Dark-Side type behavior)” is already corrupt doctors, fake journals, smear campaigns, inappropriate off label marketing, etc. How is it going to help to put even more burden on patients (who, I will remind you, are probably sick).
    Basically, this kind of Ayn Rand/Tea Party take on this is utterly untenable, because it would require patients to become some kind of expert on their conditions – many of whom are not capable of doing so. And the argument that you can “just hire an excellent doctor” really only works for people with the means to take that approach. It becomes like the legal system – the best that money can buy. Everyone else becomes fodder for cranks, or this kind of awful corruption that plagues countries like India.
    No thanks, I will keep my safety trials, and anti-corruption law, thank-you. Sketchy insurance providers – that I can do without.

  22. Andrew Ryan says:

    I hate to pile on, but in the name of God, how can drug research possiby be “free”? How will the employees be paid? The buildings purchased and maintained? The electricity kept on? The chemicals and supplies purchased? SOMEBODY has to pay for all of that to happen.
    Unless by “free” you mean “somebody else pays for it”. But since we all need health care, there is no way it can be “free” for everybody.
    As for the general topic of this post, my anecdotal evidence from working with Indian scientists is that corruption is endemic and part of nearly every transaction–the example I heard is that you cannot get a phone line installed in your home without greasing palms.
    I see that some want to blame this phenomenon on the absence of laws rather than culture–but there are laws against this behavior in India (clearly mentioned in the post). They are simply not enforced (maybe we could bribe the regulatory agencies to enforce the laws?).
    But this reasoning is simply pulling a thread on an old sweater–coluld the reason why the laws aren’t enforced is b/c of the culture? Or are we not supposed to go there?

  23. Singaporean says:

    @21: A lot of blabla in your post, but you didn’t make any valid point. As I said, for people like you, who are not able to run tests and buy the medication for themselves, there will always be the possibility to spend money on a doctor (who may be corrupted or not). Did I say, that I want safety tests to be gone? No. Did I say that I want anti-corruption laws to be gone? No. Your vivid phantasy is making this up. All I want is the patient to decide, who he trusts and if he visits a doctor or buys the medication himself.

  24. Mayhem says:

    See, now this is why I like the way drug subsidies and prescriptions are separated in Australasia.
    Basically both countries have a government body that looks at all drugs available for a given condition and subsidises the ones that provide the greatest benefit for the most people. They then tend to be targetted heavily by the sales people, but because the process is publically documented and subsidies are regularly reviewed, ineffective or overhyped products don’t last long and corruption is minimised.
    The costs of drugs do escalate over time, but the buyers are pretty savvy, and as we’re a small market and not worth the heavy bribes, consumers do pretty well out of it.
    Doctors are free to prescribe what they like, the majority of people are covered by the subsidies, and if you are unfortunate enough to suffer from a malady that requires a specific unsubsidised product or prefer one slightly more effective but significantly more expensive, then it is up to you to fund the difference.
    It basically adds a layer of abstraction between the sales & marketing types and the end customers, who don’t usually care what they get so long as it works.

  25. ayatollahOfTheOutcomes says:

    @16: Your response is totally undude-like
    “No, I am alive today because I have food to eat.”:
    That food came about cos’ of superior fertilizer, insecticides, farming equipment all developed with this reward-for-innovation stuff.
    “I grew up as an American in a country where at least half of the people were starving each and every day. I watched it each and every day and I watched them die. I lived next to them. And they begged each and every day for food since I had it and they didn’t.”:
    See, you did it yourself. You denied them food. This terrible system existed probably because there was very little long term reward for supplying food. So no one innovated towards a long term solution.
    “As I said, we are not a species that is good at self examination. But you did a great job of making my point. Thanks.”
    Not sure you’re did a good job there yourself. But dude, if your comment makes you happy, good for you. That’s dudeology for you

  26. Esteban says:

    Wow, with the growing popularity of this blog, it is starting to attract some real, shall we say, interesting perspectives. There’s just no reasoning with some people, I know I won’t be wasting my time on it.

  27. metaphysician says:

    Regarding some of the nuttier comments above, I take the following view: any ideology in which any act that does not maximize “the good” is evil? Is, itself, evil. People *must* be able to distinguish between actions and inactions, with actions having more moral weight than inactions.

  28. personal life of Sri Digvijay does not seem to be that ugly,, but as a spoke person of congress He has to be robust,, to remain within politics… So mr trivedy you should not attack any one so deeply…and personal attacks to be avoided…

  29. This article on Corruption in India relies on a poor legal and a weak statistical base relying on mere opinions and impressions in the website Any one who visits this website can make out that neither there is accountability of the person who reports a bribe nor there is any sort of verification such as voter’s ID or driving license number or ration card number or any such thing provided.

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