Consumer Protection and Health Care



Since the 1900s, there has been a rapid and unprecedented rise in global life expectancy. Almost all the countries in the world have experienced significant increases in the average lifespan of their population. East Asia alone, has witnessed an increase from 45 years to over 74 years in a mere half century.

While there may be any number of causes for this rapid increase in life expectancy worldwide, there is one factor which cannot be ignored – the plethora of improvements, innovations and discoveries in the field of medicine and healthcare. Death is becoming less common, as the health care industry finds new ways to evade it. Every day, human beings become more dependent on medical science and healthcare for our survival. Visiting the hospital and taking medication have become a part of our daily routine. Therefore, when we place something as valuable as our lives in the hands of medical professionals or manufacturers of healthcare products, we need assurance that these professionals can be held accountable for their actions.

While innovations in the health care sector have increased life expectancy and are helping people live longer and more comfortable lives, they have also brought about new and unprecedented risks. This article looks at some of the problems and dangers that mismanagement in the healthcare industry can pose to the common man, and how they can be solved.

Medical Negligence and Defensive Medicine

The landmark Supreme Court decision which brought medical practitioners under the scope of the Consumer Protection Act, was Indian Medical Association v. V. P Shanta. The Court held in this case that medical services are covered under the scope of the Consumer Protection Act, and even those patients of a lower economic background who avail services free of charge are consumers. This judgement brought on a new era in which medical professionals are under a legal duty to display a reasonable standard of care.

In 2013, the Supreme Court awarded Dr. Kunal Saha compensation of over 11 crore for the negligent treatment and subsequent death of his wife. This was unprecedented, and the highest pay-out in Indian medicolegal history. Many felt this decision was extremely heartening. After a long tradition of cases decided in favor of the medical practitioners, this was a welcome relief. However, it brought about a significant debate; are enormous compensation payouts for medical negligence the right way to go?

There are two benefits to awarding large damages to medical negligence victims. Firstly, the victims are adequately compensated and secondly, the fear of the damages will serve as a deterrent to doctors against further negligent behavior. But harsh deterrents give rise to another potential problem- the practice of defensive medicine.

Defensive medicine is a concept that is already established in the litigation-rich environment of the US, and develops as a response to a high risk of professional liability. It includes the tendency of doctors to administer tests or treatments that are neither necessary nor worthwhile for the patient. The doctors recommend these excessively precautionary treatments solely out of a fear of future liability.[1] This is a very serious risk that we must consider, before India follows the path of the US in awarding huge pecuniary damages.

Most Indians do not have medical insurance. The payment for their medical treatment comes out of their own pockets and the practice of defensive medicine could have a detrimental effect on the poor, who find it difficult to afford even basic treatments, much less the extraordinary defensive prescriptions. In order for the doctors to avoid liability, patients might have to start footing larger bills.[2]

In the US, the practice of defensive medicine is so widespread that almost 25% of healthcare costs were found to be unnecessary for the actual treatment. If India truly adopts a US-style trend of awarding enormous payouts to victims of medical negligence, these potential risks cannot be ignored.[3] At the same time, it is true that medical professionals in India are not efficiently regulated or held accountable for their actions and hence, they often get away with negligence in the exercise of their professional duties.

Collusions between Pharmaceutical Companies and Doctors

In recent years, various studies have revealed the extent to which pharmaceutical companies are capable of influencing doctors and the treatments they prescribe. The practice of providing incentives to doctors to encourage them to prescribe certain branded drugs is common. India, with its low standards of regulation, is a ripe atmosphere for these unethical practices. The Indian pharmaceutical market is also composed of largely off-patent medicines. Hence there is fierce competition, and the same drug may be manufactured by multiple companies.

Large pharmaceutical companies are known to offer various material incentives to doctors. These range from gifts like cars or home appliances, to sponsoring international trips. As a result, doctors prescribe the drugs produced by the pharmaceutical company. These drugs are usually costlier than generic drugs and may not be the most effective option for the patient. The treatment and health of the patient is directly influenced by covert advertising and sales techniques. Can commercial influences be allowed to destroy the sanctity of the relationship between doctors and their patients?

However, the ethical line is even further blurred. The British Medical Journal recently published a report which states that some pharmaceutical companies conduct medical tests at health camps for the poor, in exchange for the doctors prescribing their medicines. In certain health camps the drug companies supplied expensive instruments such as electrocardiographs and bone density scanners, to allow the camp to be conducted. They also conducted electrocardiograph tests and blood sugar tests.[4] Under the guise of corporate social responsibility, many pharmaceutical companies are allowing unqualified sales representatives to conduct tests that should be conducted by medical practitioners.

Unsuccessful attempts have been made to solve this problem. In 2013, the Medical Council of India tried to urge doctors to prescribe only generic medicines as far as possible. However, this was opposed by doctors claiming that prescriptions should focus on quality rather than cost. Also, some very specific formulations are not available in generic form. Doctors claim that the medicines they prescribe should be of maximum quality, and traditionally use this as a defense for prescribing expensive drugs.

The Department of Pharmaceuticals (DoP) under the Ministry of Chemicals and Fertilizers has laid down a voluntary Code for Marketing, to be adopted by the pharmaceutical industry. While this code recommends sanctions to be imposed on the pharma companies for wrongful promotional practices, it does not criminalize any of these acts. At present the Code is merely voluntary. It imposes no legal obligation on any of the pharmaceutical companies. There are also justified claims that allowing the DoP to frame the code brings about a conflict of interest, since the DoP is under a mandate to promote the drug industry.[5]

Direct to Consumer Advertising

One of the most harmful activities that pharmaceutical companies indulge in is Direct to Consumer (DTC) advertising. Drugs available on the market can be divided into two types. The first are Over-the-Counter drugs, which a consumer may buy of his own volition, from a registered pharmacist. These are generally harmless drugs for minor symptoms and ailments. The other type are prescription drugs. These are drugs which must be prescribed by a qualified medical practitioner and cannot be bought without a valid prescription.

OTC drugs can be advertised directly to the consumer. This is because consumers rarely consult a doctor or medical practitioner before administering them. On the other hand, mass advertising of prescription drugs is illegal.

The main Acts which regulate this activity in India are the Drugs and Cosmetics Act, 1945 and the Drugs and Magical Remedies (Objectionable) Advertisements Act, 1954. The former provides a classification of drugs into hardcore pharma or prescription drugs, narcotic drugs, and some drugs that can be advertised to the public. The latter controls the advertising of said drugs.

Although mass advertising of prescription drugs is prohibited in India, there are a number of Western countries which are using the concept in a positive light. In the US, DTC advertising is being used to enhance consumer knowledge about disease treatment. Many feel that a better-informed consumer will be able to engage in a beneficial discussion with the doctor, and the process can facilitate a greater involvement of the consumer in his own healthcare decisions.[6] It also reduces the complete power that doctors often have over their patients, due to the latter’s lack of knowledge.

However, it is clear that such a concept would not be successful in India. A country with such a large illiterate population and ineffective safeguards would not allow for DTC to produce an informed dialogue between doctors and patients. Rather, it would result in self-medication, the dangers of which will be dealt with in the next section.

However, despite legal prohibitions, DTC advertising of prescription drugs still exists in India. Many pharmaceutical companies advertise products which can have harsh side effects, and encourage consumers to self-medicate. One of the biggest threats to this comes from online advertising. Since DTC advertising is not prohibited in countries like the US or New Zealand, many of their online advertisements are observed by people in India as well. Free access to various websites is constantly exposing the Indian population to advertisements of prescription drugs.[7] There is an urgent need to regulate inappropriate DTC advertising online, as well as strengthen vigilance in both the virtual and the real world.


Self-medication is a major consequence of DTC advertising, as well as a problem in itself. It is particularly a concern in developing countries such as India, where access to healthcare is not easily available. Most of the Indian population cannot afford quality health care and hence there is a tendency in individuals, despite not having any medical knowledge, to attempt to solve the problem themselves through drugs. These individuals usually do not want to spend time or money to consult medical professionals. However, self-medication is an extremely harmful practice and one of the leading causes of antibiotic resistance in the world.

In India, there are two major factors that allow rampant self-medication. The first is the availability of these drugs in the market and the lack of regulation that results in consumers being able to buy these drugs without any prescription, with ease. Small pharmacists often sell these drugs without checking prescriptions. Regulations are not strictly enforced at the ground level.

Another, more recent threat that has arisen is the development of e-pharmacies. A number of websites take orders for prescription drugs and deliver the same to the consumer’s doorstep. There is no law as yet regulating these e-pharmacies, and they have been found to often sell prescription drugs without proper, or even under false, prescriptions. Multiple rackets have been discovered all across India.[8]

The second factor that promotes self-medication is DTC advertising. A number of advertisements convince consumers that their health problems can be simply solved by consuming a certain drug. This is particularly dangerous when consumers attempt to self-medicate for more serious ailments. The incomplete awareness brought about by DTC advertising, along with the easy accessibility to prescription drugs leads to self-medication, one of the most dangerous practices in the health industry.

Escaping Price Controls

The National Pharmaceutical Pricing Authority (NPPA) was established to control and regulate the prices of important drugs in the market, and ensure that manufacturers are not overcharging for them. One of their main functions is price control. They identify and cap prices on certain drugs, so that the manufacturers cannot charge above the cap. However, pharmaceutical companies have long been either protesting price controls, or simply finding innovative ways around them.

One of the biggest means by which manufacturers evade the price control regulations is by adding ingredients to the drug which bring it out from under the purview of the category which is capped. Hence, by adding ingredients which are unnecessary, the drug no longer falls under the National List of Essential Medicines (NLEM). One major example is paracetamol, which is covered under the NLEM, but paracetamol plus caffeine is not.[9] The combination is rarely medically justified, and it renders the price control mechanisms useless, while at the same time potentially harming consumers.

Another way to avoid the drug pricing controls is to manufacture these drugs in non-standards strengths, such as 650mg of paracetamol instead of the standard 500mg. These odd strengths are not covered by the regulations, and hence evade the price ceiling.[10] There is an urgent need for a better pricing policy, which closes these escape routes and removes all irrational combinations of drugs from the market.



Hence we can clearly see the rampant ways in which the actors in the healthcare industry exploit consumers. Pharmaceutical companies are driven solely by profit motives without any regard for the consequences of their promotional or law-avoidance tactics. Doctors themselves are often involved in both negligence and intentional trends of succumbing to market influences. While the healthcare sector has increased life expectancy and improved the lives of millions, it is also bringing about unprecedented risks, and thriving off the exploitation of its consumers.


[1] Daniel P. Kessler, Do Doctors Practice Defensive Medicine?










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