Thursday, September 29, 2022

SC: serious issue over allegations of Dolo-650 tablets promoters distributing Rs1,000 cr freebies to doctors

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The Central Board for Direct Taxes allegedly accused the makers of the Dolo-650 tablet 50 of giving doctors freebies worth Rs 1,000 crore in exchange for prescribing the tablet, according to the Federation of Medical & Sales Representatives Association of India, which brought this claim before the Supreme Court.

For the Federation of Medical & Sales Representatives Association of India, senior advocate Sanjay Parikh said that DOLO had spent 1,000 core on gifts to get its anti-fever medication supplied to patients.
Justice D. Y. Chandrachud stated that it is a significant problem and that when he contracted COVID-19, he too was given the same prescription.

“I don’t find this to be relaxing. When I had COVID, I was also asked to have the same. This is a major matter and issue,” said Justice Chandrachud.
The Supreme Court was considering a PIL that asked for guidelines to hold pharmaceutical corporations accountable for providing freebies to physicians as an inducement to prescribe their medications.

The Federation of Medical & Sales Representatives Association of India requested guidance to give the Uniform Code of Pharmaceutical Marketing Practices official backing (UCPMP).
The petitioner used the overprescription and overselling of Remdisivir during the COVID-19 outbreak as an illustration.

The Dolo-650 tablet’s maker, Bengaluru-based pharmaceutical company Micro Labs Ltd, was being investigated by the income tax department for possible tax cheating.
Last month, the Income Tax Department conducted searches and seizures. Over 50 nations are where the group is present. Around 36 locations located across 9 states were subject to the search operation.

Significant amounts of damning evidence, including documents and digital data, have been discovered and seized during the search operations, according to a statement from the finance ministry.
Initial investigation of the evidence showed that the organisation had been charging unallowable expenses for the distribution of freebies to medical professionals under the heading “Sales and Promotion” in its accounting records.

To promote the group’s products, doctors and other medical professionals received travel expenses, perquisites, gifts, and other benefits under the headings “Promotion and Propaganda,” “Seminars and Symposiums,” “Medical Advisories,” etc.

The data suggested that the group used unethical tactics to advertise its brands and products. According to the statement, the total amount of these gifts found is believed to be close to Rs 1,000 crore.

The group was also discovered to have over appropriated revenue to the unit eligible for the deduction and suppressed expenses to claim an artificially inflated deduction under specific provisions in respect of certain earnings.

Other forms of tax avoidance were also discovered, such as exaggerated claims for weighted deductions under section 35 (2AB) and improper allocating of R&D expenses to qualified units. Over Rs. 300 crores in tax is thought to be tried to be dodged using similar methods.

cases of tax deduction at source violations under section 194C of the Income-tax Act of 1961 discovered about transactions made under agreements made with third-party bulk medicine producers.
Unaccounted cash worth Rs. 1.20 crore and unaccounted gold and diamond jewellery worth more than Rs. 1.40 crore were found during the search operation.

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