Top Exciting Story...! **************************** Profits From Medical Devices Used to Bribe Doctors? Mumbai, 15 Sept 2014 A detailed investigation by the Maharashtra Food and Drug Administration (FDA) had exposed how drug eluting stents are sold at triple the price at which they are imported. A complaint sent to one of the largest medical device companies, Medtronic USA, revealed how local distributors for major medical device companies were allowed to charge huge margins on devices and how the cash thus generated was used to bribe doctors to persuade them to use their companys devices. One of the examples cited in the Maharashtra FDA report is of drug eluting stents manufactured by Medtronic Inc, imported into India by Medtronic Pvt Ltd (IMPL) atRs 30,848 and sold to the distributor Bhalani Biomedicals Pvt Ltd for Rs 67,000. Bhalani then sold the DES to hospitals for one lakh plus against the marked maximum retail price (MRP) of Rs 1.62 lakh. In March 2012, Medtronic USA had received a complaint about widespread bribing of doctors by its distributor Bhalani. According to the complaint, IMPL, the India arm of Medtronic, used distributors to distance itself from the bribery as it went against the corporate ethics Medtronic claims to adhere to. The complaint pointed out that the huge margin distributors were allowed to charge was used to bribe doctors, thus leaving Medtronics books clean and yet ensuring that the corrupt practices help push their products. In September 2012, a newspaper report in Mumbai exposed corruption in sale of stents to government hospitals. Medtronics USA was informed about this report and company officials said they took the allegations seriously and initiated an investigation to be conducted by outside counsel, Jones Day Lawyers. Till June 2013, they claimed investigations were on. They even took away the distributorship from Bhalani. But those in the business of medical device distribution claim that business practices have not changed as doctors and hospital managements continue to be bribed through distributors to increase sales of devices. When contacted by TOI, Medtronic USA declined to comment about the investigation they had carried out into the allegations of bribing by their distributor. They merely stated: Medtronic has an extensive compliance program to assess the conduct of its employees and representatives, including distributors, and if necessary takes action against those who violate its policies and the law. Furthermore, our employees and representatives are provided extensive training and resources to ensure they fully understand our business conduct requirements and local laws. We do not condone nor do we tolerate improper payments of any kind, and we will continue our efforts to ensure compliance with all applicable Indian and US laws. According to a distributor of stents for another multinational, the company was well aware that the stent they imported for Rs 15,000 was being sold for more than Rs 60,000. They dont care as long as the distributor is willing to do the bribing of doctors using the huge margin, to help the company increase its market share, even as the company looks the other way pretending not to know anything about the bribing, said the distributor. The Maharashtra FDA report included details of overcharging by Abbott as well as Johnson and Johnson. Interestingly, while these multinationals claim to have stringent compliance programs in place to prevent bribing and other unlawful activities, almost all of them have been penalized heavily in the US for bribing doctors to boost their sales. In May this year, Medtronic agreed to pay $9.9 million to resolve allegations that the company used various types of payments to induce physicians to implant its pacemakers and defibrillators. This was a repeat offence for Medtronic, which had to pay $23.5 million in 2011 too for settling charges of kickbacks to doctors. Abbott Laboratories agreed to pay almost $5.5 million to resolve allegations that the company paid kickbacks to induce doctors to implant the companys carotid, biliary and peripheral vascular products. De Puy, a subsidiary of Johnson, along with four other makers of artificial hips and knees, shelled out $310 million in penalties in September 2007 for using fake consulting agreements and other tactics to get surgeons to use their products. With nobody cracking down on such practices by companies in India, the bribing continues unabated, impoverishing thousands of patients. ==================================================== From Times of India
Posted on: Tue, 16 Sep 2014 03:32:12 +0000
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