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Domestic pharma and medical devices firms say stricter implementation of the Uniform Code for Marketing Practices in Medical Devices 2024 (UCMPMD) acts as a deterrent against unethical trade and marketing practices by firms, but analysts maintain that the cost of compliance is set to rise.
However, the deadline for submitting disclosures related to marketing expenditure has been given another extension till September 30.
While firms are required to submit mandatory annual declarations of marketing expenditure within two months of the financial year’s close, the deadline has got two extensions this year, and finally it has been extended till September 30. The declarations were expected to be submitted by June 30, which were extended twice to July 31 followed by August 31.
This undertaking must be signed by the executive head of the company, assuring compliance with the marketing practices code. The signatory could be the managing director (MD) or the chief executive officer (CEO) of the company.
The code caps free evaluation samples at 2 per cent of domestic sales, with valuation to be recorded at stockist price if manufactured in-house, or at purchase price if sourced externally. Companies must also disclose spending on samples, CME (continuing medical education) programs, event sponsorships, and pre-approvals needed for specialist doctor international travels, lodging, and hospitality in a newly prescribed annexure format. In a move aimed at eliminating conflicts of interest, the revised framework prohibits gifts, cash grants, and personal travel or hospitality benefits to healthcare professionals and their families. Industry associations will be required to retain disclosure data for five years, with stricter penalties for violations.
Analysts, however, pointed out that this would raise the cost of compliance for firms.
The UCMPMD amendments tighten the screws on how device companies account for freebies and marketing spend. “While this raises near-term compliance costs and curbs promotional flexibility, it also creates a long-term transparency premium. Larger listed players are likely to emerge stronger while smaller firms that can’t keep up with disclosure norms may lose relevance. Much like in hospitals, regulation could catalyse consolidation, painful initially, but ultimately positive for the sector’s investability,” said Nirali Shah, pharma analyst, institutional research, the Ashika group.
While larger players will adapt to these changes easily, the smaller firms may face issues, felt analysts.
“This development enhances transparency, accountability, and practicality, boosting industry credibility with the regulators, doctors, and patients. We believe larger players will adapt to these changes smoothly due to existing compliance systems while smaller firms may face compliance costs (compliance infrastructure, digital systems, and training) but will benefit from simplified disclosure routes,” said Krishnanath Munde, associate director, healthcare, India Ratings & Research.
He added that the amendment deters unethical marketing by holding CEOs accountable and requiring associations to retain data for five years. Over time, companies may face increased scrutiny from government agencies for non-compliance.
While the UCMPMD remains a voluntary code, the legal sting lies in the disclosures themselves. Once a CEO digitally signs and files marketing spend data, any mismatch, say undervaluing free samples or hiding overseas CME spend, can be picked up in tax audits, compliance probes, or even court cases. In practice, voluntary compliance creates a binding paper trail, Shah said.
The domestic medical devices industry felt that introduction of mandatory annual disclosure norms and simpler reporting formats would bring in much-needed transparency in the medical devices sector. Pharma industry bodies – Indian Drug Manufacturers’ Association (Idma) and the Indian Pharmaceutical Alliance (IPA) – felt that stricter implementation and monitoring will act as a deterrent against unethical trade practices.
Viranchi Shah, national spokesperson and chairman of ethics committee, Idma, said: “It’s a welcome step in bringing simplification and transparency in implementing UCMPMD. Idma is committed to promoting business ethical practices for its members.”
“At the Association of Indian Medical Device Industry (AiMeD), we welcome the UCMPMD and the simplified annual reporting format. The Code ensures ethical and transparent marketing, fostering fair competition and stronger reputations for both domestic and overseas manufacturers. Patients benefit through safer devices, trustworthy information, and freedom from exploitative promotions,” said Rajiv Nath, forum coordinator, AiMeD.
Navigating new terrain
Deadline for submittingmarketing
expenditure disclosures extended till Sep 30
The code caps free evaluation samples at 2% of domestic sales
Prohibits gifts, cash grants, and personal travel or hospitality benefits to health care professionals and their families
Industry associations to retain disclosure data for five years with stricter penalties for violations
Analysts feelwhile larger playerswill adapt easily, smaller firms may face issues
