The Indian government has been urged to investigate claims that infant formula manufacturer Nutricia India, a subsidiary of the Danone Group, approved illegal payments by its employees to doctors.
Industry watchdog the Breastfeeding Promotion Network of India (BPNI) has called on Indian authorities to look into allegations that Nutricia India approved “direct and indirect” payments to doctors to promote and prescribe its infant nutrition products.
The payment of health officials by those involved in the supply of infant formula is a violation of the Indian Infant Milk Substitutes, Feeding Bottles and Infant Foods Act 1992 as Amended in 2003 (IMS Act).
Violations of the IMS Act are punishable by up to three years in prison and/or a fine of up to 5,000 Indian Rupees.
BPNI, which is dedicated to the “protection, promotion, and support” of breastfeeding, is one of several organizations in India charged with monitoring and reporting violations of the IMS Act.
Dr Arun Gupta, national coordinator at BPNI and regional coordinator at International Baby Food Action Network Asia (IBFAN Asia), believes that the allegations warrant a probe.
“We have actually written to the Government of India,” Gupta told DairyReporter.com.
“I hope the government does something, it certainly calls for an investigation.”
Commenting on the claims made against Nutricia India, Gupta added: “Baby food companies should have no business in contacting a health worker and giving out freebies or hard cash.”
"Risk of non-compliance"
The allegations, first reported by DairyReporter.com in January 2014 , relate to the handover period following the Danone Group’s €250m ($182m) acquisition of Wockhardt’s nutrition business.
The deal, completed in July 2012, saw Nutricia India absorb Wockhardt’s Dexolac, Nusobee, and Protinex brands, and officially entered the country’s infant nutrition market.
It became apparent in the second half of 2012 that payments, in both cash and gift form, were being made to doctors, our source claimed.
Nutricia India documents, seen by DairyReporter.com, appear to detail payments of around 15,000 Rupees ($240, €180) by sales representatives to doctors.
The Danone Group declined to comment directly on the allegations.
A subsequent August 2013 integration audit of marketing practices at Nutricia India between March 1 2013 and August 31 2013 “did not identify any payments made to doctors” by Nutricia India employees. The Danone Group did, however, acknowledge that the business was at “risk of non-compliance” with the IMS Act.
While recognizing this risk, the audit document added: “Nevertheless, necessity to animate the category.”
The Danone Group refused to be drawn on the exact meaning of this phrase when pressed by DairyReporter.com.
“A key failure” of the integration audit, according to the whistleblower, was that auditors chose not to cover the five-month period following the deal with Wockhardt.
“At the time of the audit, they were aware of allegations [of payments to doctor], and that the period they should have been looking at was the second half of 2012,” said the whistleblower.
The Danone Group again declined to comment on these claims.