Have you ever stood in a pharmacy, prescription in hand, shocked by the price label on your medicine? While manufacturing costs are surprisingly low, the final price you and I pay is often higher. The reason?

A complex web of relationships between pharmaceutical companies, doctors and medical representatives.

Imagine if James Bond had a different mission-not saving the world, but convincing doctors to prescribe certain medicines. That’s essentially what medical representatives (MR) do: build relationships and promote their products. But behind their efforts lies a price we, the patients, end up paying. In this blog, we’ll uncover what happens behind the scenes in the pharma world, how it impacts your wallet, and why it’s more important than ever to make informed choices about your medicines.

Table of Contents

MR Training and Responsibilities

Becoming a Medical Representative (MR) isn’t just about knowing medicines—it’s about mastering the art of persuasion. Every new recruit undergoes an intense 15-day training program, with 8-hour days filled with lessons on company products, effective communication, and sales techniques. It’s not just about memorizing facts; they participate in role-playing games and interactive sessions to learn how to handle real-life situations and build trust with doctors.

Once the training is done, the real mission begins. Their main job is to promote their company’s medicines and make sure doctors in their assigned area prescribe them.

“We are trained to cultivate close relationships with doctors, not just to boost sales but to earn their trust – after all, a trusted friend’s brand is harder to refuse”– Niresh (medical representative from a leading pharmaceutical company)

Strategies companies/MR use to boost sales

What’s the best approach to motivate staff to put in extra effort?

– Offer incentives.

Pharma companies do this by offering four types of incentives: monthly, quarterly, and yearly, based on sales targets they achieve. Monthly incentives typically range from 2% to 10% of sales in small to big companies (e.g., big company like Lupin), with additional rewards tied to quarterly and annual performance.

For Medical Representatives (MRs), these incentives are often the driving force behind their constant travelling and convincing doctors. Their day usually begins with a Retail Chemist Prescription Audit (RCTA)-analyzing how well their brand is selling and how it stacks up against competitors. Armed with this data, MRs strategize to highlight the strengths of their medicines without discrediting others.

“We are trained not to defame competitor brands. Instead, we politely approach doctors by saying, ‘We’ve noticed that you frequently prescribe this medicine. I’d like you to consider prescribing my brand as well, as it offers XYZ“- Himesh (Medical representative)

But is it easy to convince doctors to prescribe branded medicines?

“It all depends on what the doctor is interested in, some are focused on knowledge, while others are motivated by financial incentives” – (Advitya, A medical representative from a leading pharmaceutical company)

If a doctor requests that a company invest in him, the company can organize a free camp on his behalf or ask for a cash contribution. However, the doctor is required to sign an agreement called the Return on Investment (ROI), where the company expects a return in the form of prescriptions for its brand.

What happens after doctors agree to prescribe their medicine?

“Once the doctor agrees to the cash inflow in exchange for prescriptions, our phones are bombarded with reminder messages to prescribe their medicine, and that is the most annoying part.“ – A doctor from a public health organization

“MRs also organize parties and events to boost their brand value, which are attended by both senior and junior doctors”- A doctor from a public health organization

Now we know companies do invest in doctors, the question is……………………….

Do Pharma Companies Disclose Their Investments in Doctors?

The simple answer is no.

If you look at the quarterly expenses of big pharma companies, their expenses and profits are high, but material and employee expenses are low. So, where’s the rest of the money going?

This graph clearly shows that:

A significant portion of the cost (37-43%) is spent on marketing by pharma companies.

Nearly 25-30% of the medicine price contributes to profit.

The actual marketing expenditure may be even higher if employee costs and gifts, categorized under material and employee expenses (50+%), are taken into account.
This graph shows the cost to the supply chain agent, which is part of the revenue, but it doesn’t reflect the actual, much higher cost of the medicine.

* Companies also invest in other areas, such as research, which may be categorized as unreported expenses.

Let me take you into an intriguing court case between Apex Laboratories and the Income Tax Authority of India. Apex Laboratories sought a tax exemption for all the gifts it had provided to doctors considering it as expense. However, the company lost the case, highlighting that the government is fully aware of this practice-one of the contributing factors to high medicine prices.

The irony is that since 2014, the government has established the Uniform Code of Pharmaceutical Marketing Practices (UCPMP), outlining clear rules for pharma companies to avoid gifting doctors and ensuring MRs interact with doctors solely to educate them about medicines. Despite this, no complaints have been registered to date.

When the government knows there’s a loophole driving up the cost of a basic need, merely forming rules isn’t enough. Even Modi Ji acknowledged this in a 2014 London gathering, saying, ‘Doctors go to Singapore for conferences, but we all know what’s behind these conferences.

What do doctors think about MR and vice versa?

When I interviewed a doctor and several MRs, I noticed that the MRs kept emphasizing that not all doctors are money-oriented and that they have great respect for doctors, as most prioritize patients’ over personal gain. On the other hand, the doctors sympathetically acknowledged that MRs also have targets to meet. Ultimately, the pharma industry thrives on quid pro quo. MRs will naturally express trust in doctors, as you and I would go to a doctor who prescribes the MR’s medicine, benefiting the company in the process.

Impact of digitalization on MR roles

“Because of digitalization, our profit has turned into a total loss” – Medical Representative

Why is that? Let’s say you visit a nearby doctor and forget to buy your medicine from the local pharmacy. If you decide to purchase it online, it may come from a different area, meaning it won’t count as a sale within the MR’s territory, leaving them with no benefit.

How can you break out of this loop and save your health and money?

Pharmaceutical companies often invest heavily in promoting their medicines to doctors but invest very little in ensuring the safety of those medicines. Unfortunately, this pharma-doctor relationship comes at a cost paid by common people like us, without any guarantee of quality.

So, what’s the smart choice? Educate yourself. The medicine your doctor prescribes might have cheaper alternatives with the same ingredients—like how store-brand sugar cane juice can come from the same source as the premium ones. But remember, not all alternatives are the same quality.

That’s where we come in. At SayaCare we believe in medicines that are both tested and affordable. Every medicine we offer is tested at government-approved labs, ensuring you get quality treatment at a fair price.

Conclusion

The pharmaceutical sales ecosystem in India reveals a complex web of relationships between medical representatives, doctors, and pharmaceutical companies, driven by incentive structures and marketing practices. Despite regulatory frameworks like UCPMP and MCI guidelines prohibiting doctor gifts, the industry continues to operate through unofficial investments and ROI agreements. While both doctors and MRs navigate this system with their own pressures and justifications, the ultimate cost is borne by patients through inflated medicine prices. The emergence of digital platforms has further disrupted traditional MR territories, pushing for change in the industry. As this system persists, solutions like SayaCare offer consumers a way to access verified substitutes at fair prices, providing a practical alternative to navigate these industry challenges.