How much will pharma sector issues affect gifting industry?

How far and how hard has been the gifting industry been hit by the regulations imposed by the Government of India and the Medical Council on the doctors receiving gift? This was a point of intense debate in a recent informal get together organized by Giftex.

A section of speakers felt that the impact was temporary and not so serious, whereas others felt that its implications are much more severe as the gifting industry players are quite reliant on many pharmaceutical companies. Taking up the positive side of it, a participant said: “A couple of pharma company owners he spoke to, stated that the issue was of hardly any relevance, since those who wanted to give away gifts, can do so, whichever way – regulations or no regulations. The thing is many are simply using them as an excuse for not give gifts.

“It does not take much to tell a dealer who can be compensated for the same but it’s recession that is preventing them from doing so and not the restrictions. That too will change. Indian companies will continue to give gifts, though multi-nationals are sort of holding back, which is understandable. However, this is a situation that will pass and things will get back to normal.”

Launched in Delhi, the recent KPMG India Fraud Survey mentioned that bribery and corruption have emerged as the core compliance risks to companies in the pharma sector. This is largely owing to scenarios ranging from the undesirable fact that procurement teams at certain Indian hospitals are able to manipulate prices in return for alleged kickbacks from companies. On the other hand, medical practitioners have at times been accused of accepting ‘gifts’ from companies in return for promoting select drugs manufactured by them. Independence of regional regulatory bodies can be compromised to provide favorable reports overlooking malpractices.

Speaking at a broader level, corruption and bribery continue to be troublesome issues that the industry is not keen to discuss. However, there is no point in blowing up the issue of malpractices or commissions in one specific industry. These things and illegal activities will be there across domain. It is unfair to single out a particular industry and blame it completely. Intense competition among vendors and anxiety to grab shrinking business opportunities is prompting them to resort to unfair means. Despite this, those with a vision and quality will always thrive. In the long-term, there should be no major issue.

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