The healthcare industry plays a pivotal role in the well-being of a nation’s population.In India, a country with a diverse and densely populated demographic, the healthcare sector faces unique challenges. Among these challenges, ensuring ethics and compliance within the industry is of paramount importance. This article delves into the intricacies of ethics and compliance in the Indian and international healthcare sector, exploring key issues, regulatory frameworks, and potential areas for improvement.

The Landscape of the Indian Healthcare Industry

India’s healthcare industry is a complex ecosystem, comprising of public and private healthcare organizations, pharmaceutical and medical device companies etc. It is well known that the healthcare sector in India is regulated through a plethora of laws at various stages by the authorities/regulators. Therefore, it is important for the healthcare companies to abide by the applicable laws to ensure strict compliance with respect to their actions related to healthcare professionals and patients. Ethical lapses and non-compliances exacerbate these challenges, leading to a potential decline in the quality of healthcare services and unequal access to care.

Ethics and compliance in the healthcare industry is of prime importance for the following reasons:

    • Patients rely on healthcare professionals to make decisions that are in their best interests, and ethical behavior is the foundation of this trust. When healthcare professionals and institutions adhere to ethical principles, patients are more likely to feel safe and confident in their care.
    • Maintaining trust and transparency in a doctor-patient relationship is a cornerstone of medical ethics and compliance fosters transparency and accountability within the healthcare industry.
    • When healthcare organizations and professionals follow established regulations and guidelines, they are more likely to maintain accurate records, report adverse events, and take responsibility for their actions. This transparency builds trust among stakeholders and patients.
    • Ethical conduct in healthcare directly impacts the quality of patient care. Healthcare professionals who prioritize ethics are more likely to deliver high-quality, patient-centered care. This includes informed consent, respecting patient autonomy, and providing treatments that align with the patient’s values and preferences. Ethical behavior ensures that patient care is not compromised for financial gains or other ulterior motives.
    • Ethics and compliance are closely intertwined in the healthcare industry and often align with legal and regulatory requirements. Compliance with these requirements is crucial for maintaining the integrity of the healthcare system.

 Indian Scenario

As it is well understood that ethics and compliance is a cornerstone for success and safety, the Indian government has incorporated the same in some of the express laws and regulations to ensure that healthcare professionals do not defy their duty and compliances laid down under law.

The National Medical Commission (“NMC”) had issued the National Medical Commission Registered Practitioner (Professional Conduct) Regulations, 2023 (“RMP Regulations”) on August 3, 2023, and which came into effect on August 9, 2023. Thereafter, on August 23, 2023, the National Medical Commission Registered Medical Practitioners (Professional Conduct) (Amendment) Regulations, 2023 (“Amendment”), was issued which put the RMP Regulations in abeyance with immediate effect. The NMC has further clarified that the RMP Regulations shall not be operative and effective till further notification in the official gazette. Further, it is imperative to note that the erstwhile Indian Medical Council (Professional Conduct, Etiquette and Ethics) Regulations, 2002 (“IMC Regulations”), which had been overridden by the RMP Regulations have been re-adopted and made effective under the Amendment. The RMP Regulations were supposed to instill new changes such as the requirement for RMPs to make their relationship with pharmaceutical companies and allied health sector industries publicly available, clear, transparent, and open to scrutiny[1] and so on. It is speculated that the changes brought about by the RMP Regulations were not industry friendly and therefore a revision of the same is on the cards.

The IMC Regulations are a crucial set of guidelines and regulations that govern the ethical conduct of registered medical practitioners (“RMP”) in India. These regulations were established by the Indian Medical Council, the governing body responsible for the regulation of medical education and practice in the country. The principal aim of the IMC Regulations is to establish and maintain high ethical standards within the medical profession in India. It outlines the principles and standards that RMPs must follow in their practice, emphasizing the importance of patient welfare and professional integrity. These regulations expressly forth certain requirements that must be adhered to by the RMPs, and they include maintaining good medical practice; maintaining medical records in the prescribed format; using generic names of drugs; ensuring highest quality of patient care; exposing unethical conduct and so on.

There have been numerous cases that have highlighted the issue of ethical misconduct and non-compliance on part of the RMPs and one of them includes the high-profile case of Apex Laboratories v. Deputy Commissioner of Income Tax, Large Tax Payer Unit-II,[2] wherein a pharmaceutical company was issued a show cause to explain expenditure incurred by the company towards gifting freebies such as hospitality, conference fees, gold coins, LCD TVs, fridges, laptops etc. given to medical practitioners. The Supreme Court in this case held that the company had contravened the IMC Regulations, and the act of acceptance of freebies given by the company was clearly an offence on part of the medical practitioner as the same is expressly prohibited by law. The court observed that “the freebies are technically not ‘free’ – the cost of supplying such freebies is usually factored into the drug, driving prices up, thus creating a perpetual publicly injurious cycle.”

Further, few key legislations governing the healthcare industry include, but is not limited to, the Uniform Code on Pharmaceuticals Marketing Practices, Draft Uniform Code on Medical Device Marketing Practices issued by the Department of Pharmaceuticals, Ministry of Chemicals & Fertilizers etc.

It is important to note that the Prevention of Corruption Act, 1988 (“POCA”), which regulates taking of gratification by a public servant in respect of an official act other than legal remuneration, or by corrupt legal means or a criminal misconduct by a public servant is of prime importance as well. In 2018, Prevention of Corruption (Amendment) Act, 2018, was notified which included within its scope, commercial organizations (which includes companies either incorporated or doing business in India) and its employees who are involved in giving or the promise to give any undue advantage to public servants in order to:

    1. obtain or retain business for such commercial organization; or
    2. obtain or retain an advantage in the conduct of business for such commercial organization. In such instances, the individual (being the officer/employee of such commercial organization) involved in giving undue advantage and the commercial organization, will be held liable under the POCA, unless the organization can prove that it had adequate procedures in place to prevent such conduct by persons associated with it.

In addition to the above, the IPC is the criminal code of India which comprehensively covers all substantive aspects of criminal law, including abetment,[3] criminal misappropriation,[4] criminal breach of trust,[5] and cheating,[6] which may have an effect on the stakeholders of the healthcare ecosystem including the healthcare professionals, if involved in such activities.

Overarching Foreign Laws for Corrupt Practices and Bribery

Healthcare sector (including Drugs & Pharmaceuticals and Hospital & Diagnostic Centre sectors) is in the top-20 sectors receiving foreign direct investment (FDI) equity inflow from April 2000 to June 2023. The US and the UK are in the top 10 investing countries contributing FDI equity inflow to India in the financial year 2022-2023, with US having a share of 9%, and the UK with 5% of the total FDI equity inflows in India.[7] India imports nearly 80% of its medical devices from foreign countries such as the US and the UK.[8] Thus, various foreign medical devices companies either function through subsidiaries and/ or through a network of distributors and agents in India. In light of the same, it is crucial to note the intricacies of laws of these countries surrounding ethics and compliance in the healthcare sector which have an overarching effect on such subsidiaries and/or distributors in India.

In the US, the Department of Justice and Securities Exchange Commission investigate and prosecute business corruption under the Foreign Corrupt Practices Act, 1977 (“USFCPA”). The USFCPA prohibits bribery of non-US government officials and imposes accounting and internal control requirements upon companies operating in the US. Similarly, in the UK, the UK Bribery Act, 2010 (“UKBA”), applies to all companies that carry on a business, or part of a business, in the UK, as well as those which are incorporated under UK laws and enforced by the UK Serious Fraud Office. The UKBA prohibits bribing as well as receiving a bribe, alongside bribing of a foreign public official, and failure of commercial organizations in preventing bribery. Pursuant to the overarching and extra-territorial elements provided under the USFCPA and the UKBA, regulators in the US and the UK actively scrutinize companies in their jurisdictions, as well as their subsidiaries, distributors, and agents, in order to regulate their conducts in adherence with the applicable laws. In the recent past, strict penalties and fines have been imposed on various corporations in the US and the UK for violation of applicable anti-bribery laws.[9]

 Ethics and compliance play a pivotal role in shaping the future of the healthcare industry in India. Patient trust, quality of care, and legal adherence are all deeply influenced by ethical behavior and regulatory compliance. It is of absolute importance that healthcare companies: (a) conduct regular audit checks to figure out trends and patterns of breach; (b) training and education of employees at regular intervals in relation to procurement practices, selection of vendors, conflicts of interest and encouraging employees to report suspicious activities; and (c) general oversight and control over the procurement of cycle and conduct of the employees.

In a country with a diverse and vast healthcare landscape, these principles are essential for delivering equitable, accessible, and high-quality healthcare services to all citizens. As the Indian healthcare industry continues to evolve, the importance of ethics and compliance should not be underestimated. Striving for ethical excellence and regulatory compliance is not only a moral imperative but also a strategic necessity for the sustainable growth and development of the healthcare sector in India.

Authors: Pradnesh Warke, Partner, Dentons Link Legal,

Tanay Jha, Associate, Dentons Link Legal,

Subham Biswal, Associate, Dentons Link Legal


[1] Regulation 35, National Medical Commission Registered Practitioner (Professional Conduct) Regulations, 2023.

[2] Apex Laboratories Private Limited v. Deputy Commissioner of Income Tax, Large Tax Payer Unit-II, (2022) 7 SCC 98

[3] Section 109 – Section 120, Indian Penal Code, 1860.

[4] Section 403, Indian Penal Code, 1860.

[5] Section 405, Indian Penal Code, 1860.

[6] Section 420, Indian Penal Code, 1860.

[7] See

[8] See

[9] See;;;

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