New Delhi: The Supreme Court on Tuesday said that gifts given by pharmaceutical companies to doctors are not free. Their effect comes in the form of an increase in the price of the drug, creating a dangerous public vicious circle. Making these observations, the Supreme Court has rejected the request of pharma companies to include the cost of free gift giving in the income tax exemption. The Supreme Court said that giving gifts to a medical practitioner is prohibited by law.

Pharma companies cannot take advantage of income tax exemption on this under section 37(1) of the Income Tax Act. Under this section, any such expenditure, which is done for the purpose of carrying on the business, is exempted from income tax. A bench of Justice UU Lalit, in its judgment on the matter, observed that the doctor has such a relationship with the patient, whose single word written is the last for the patient. Even if the medicine prescribed by the doctor is expensive and out of reach of the patient, he tries his best to buy it.

In such a situation, it becomes a matter of great concern when it is learned that the consultation written by the doctor is related to free gifts from pharma companies. The Supreme Court said that the supply of freebies (conference fee, gold coin, laptop, fridge, LCD TV and travel expenses etc.) are not free, they are added to the price of medicines. This increases the price of the medicine. Giving a freebie is absolutely against public policy, it is explicitly prohibited by law.

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