Are Physicians Permitted to Sell Medicines? Here’s What the Law and Code of Conduct Say

 Are Physicians Permitted to Sell Medicines? Here’s What the Law and Code of Conduct Say

The Drugs Act, 2035 (1978) and the Drug Registration Regulations, 2038 (1981) stipulate that medicines cannot be sold or distributed without proper registration, certification, and the availability of necessary human resources and infrastructure.

Patients visit physicians for medical treatment. The physician examines the patient, diagnoses the illness, and prescribes the necessary medication; the patient then proceeds to a pharmacy to purchase it. However, in some instances, medicines are provided to patients directly from the physician’s own clinic or health institution. This gives rise to a significant question: are physicians permitted to sell medicines?

This issue extends beyond a mere matter of professional jurisdiction between physicians and pharmacists. It encompasses concerns regarding the safe use of medicines, a patient’s right to choose, conflicts of interest, the pricing and quality of drugs, as well as record-keeping and regulatory oversight.

What Does the Law Say?

In Nepal, the primary legal framework governing the sale and distribution of medicines is the Drugs Act, 2035 (1978). Section 10 of the Act mandates that any individual engaged in the sale and distribution of medicines must register their name—along with their shop or firm—with the Department of Drug Administration and obtain a certificate. Furthermore, Section 10(a) stipulates that only registered medicines may be sold or distributed.

More importantly, Section 17 of the Drugs Act specifies that medicines classified as requiring a physician’s prescription must be sold or distributed only through authorized personnel—such as a pharmacist, pharmacy assistant, or licensed proprietor—in accordance with established regulations. Additionally, Section 28 explicitly prohibits the production, sale, distribution, dispensing, or storage of medicines without the requisite human resources and infrastructure. The Drug Registration Regulations, 2038 (1981) stipulate that any individual wishing to engage in the sale and distribution of medicines must register their name—along with their shop or firm—with the Department of Drug Administration and obtain a certificate.

This makes it clear that being a physician does not, in itself, confer a legal right to sell medicines. To sell and distribute medicines, one must fulfill the requirements prescribed by law, including registration, certification, the availability of qualified personnel, necessary resources, and adherence to other mandatory procedures.

Therefore, when medicines are provided through a physician’s clinic or a healthcare institution, it is crucial to determine in what capacity, under which registration certificate, and through what specific process those medicines were supplied.

This establishes a fundamental distinction: the authority to prescribe medicines and the authority to sell or distribute them are not the same thing.

Selling medicines and providing medicines are not the same.

In this context, terms such as "selling," "distributing," "dispensing," and "providing medicines to patients" should not be conflated or understood as having the same meaning. "Distribution" refers to the commercial trade of medicines. "Dispensing" refers to the process of providing the correct medication—in the right dosage and to the right patient—based on a physician’s prescription, while also offering instructions on how the medication should be used.

Similarly, a physician providing necessary medication to their own patient during the course of treatment is not the same as operating a commercial pharmacy to sell medicines. Therefore, rather than automatically labeling the provision of medicine to a patient as "selling medicine," one must evaluate the act based on the underlying purpose, the legal capacity in which it was provided, and the process followed. Are physicians prohibited from providing their own prescribed medicines to patients?

The Nepal Medical Council’s *Code of Ethics and Professional Conduct, 2017* explicitly states that physicians should not operate a pharmacy for the purpose of dispensing medicines prescribed by other physicians. However, the Code does not entirely prohibit a physician from personally providing the very medicines they have prescribed to their own patients. In such instances, the physician bears the personal responsibility of ensuring that the medication is dispensed in strict accordance with the prescription, is within its expiry date, is properly labeled, and is provided safely.

This scenario must be distinguished from the operation of a standard commercial pharmacy for the sale of medicines. This distinction helps clarify the legal and practical boundaries between a physician providing medication to their own patient and the commercial sale of pharmaceuticals.

Why should the roles of prescribing and dispensing be separate?

A physician’s primary role involves diagnosing diseases, formulating treatment plans, and prescribing medications. Conversely, pharmacists play a vital professional role, which includes the proper storage of medicines, evaluating prescriptions, ensuring the correct medication and dosage are provided to the right patient, explaining how to use the medication, and offering counsel regarding potential drug interactions or adverse effects.

The Nepal Medical Council’s Code of Ethics also recognizes the value of the expertise and support provided by professionals in healthcare-related fields, such as pharmacy and nursing. Therefore, it is essential that the respective responsibilities of the prescriber and the dispenser are clearly defined, and that effective coordination is maintained between them. This can contribute to the safe and rational use of medicines, patient safety, and the management of risks that may arise from conflicts of interest.

The Risk of Falling Prey to Greed

Physicians prescribe medications for the treatment of patients. A conflict of interest arises if the same physician also derives direct financial gain from the sale of the prescribed medication. Since clinical decisions should be based solely on the patient's needs and health interests, the possibility that such decisions might be influenced by potential financial gain cannot be overlooked from a regulatory perspective.

For instance, driven by the lure of financial gain, there is a risk that a physician might make decisions such as prescribing more medication than necessary, opting for expensive brands, adding unnecessary drugs, or extending the duration of treatment.

Nepal Medical Council’s Code of Ethics... The Code of Professional Conduct (2017) stipulates that physicians must not exploit a patient's lack of knowledge to sell or promote medical products or health-related substances. Furthermore, it mandates that even if a physician has a commercial interest in a pharmaceutical or health-related company, such an interest must not influence the treatment provided to patients, the prescription of medicines, or referrals.

Therefore, it is crucial to maintain transparency, professional distance, and effective regulation between the clinical decision regarding which medication a patient requires and any direct financial benefit the physician might derive from that specific medication.

**The Patient's Right to Choose is Also Crucial**

If a physician’s prescription creates a situation where a patient feels compelled to purchase the medication from a specific location, the patient's freedom of choice is compromised. An environment must exist where patients can take their prescriptions to any legally registered, appropriate pharmacy to purchase their medication. This provides patients with options regarding price comparison, product availability, and access to professional consultation about their medication.

Within the public health service system, maintaining an appropriate professional distance between the prescriber (the physician) and the dispenser (the pharmacist/pharmacy) can facilitate the rational use of medicines.

**Different Provisions for Government Hospitals**

For government hospitals, the legal basis for institutionalizing hospital pharmacies is clearly defined. Section 29(4) of the Public Health Service Act (2075 BS) mandates that every government hospital must operate its own pharmacy to ensure the consistent availability of medicines at affordable prices. Additionally, the Act stipulates that those dispensing medicines must ensure proper storage and distribution in compliance with established quality standards, and prohibits the sale or distribution of medicines without a physician's prescription. The previously issued 'Hospital Pharmacy Service Guidelines, 2072' also aim to provide accessible and quality pharmaceutical services to patients and service seekers by establishing and operating hospital-based pharmacy services. These guidelines cover aspects such as the formation of a Hospital Pharmacy and Therapeutics Committee, the development of a hospital formulary, and the management of medicines and pharmaceutical supplies.

This framework provides the legal basis for institutionalizing a system through which medicines are supplied in government hospitals via dedicated hospital pharmacies. Therefore, it is inappropriate to equate a government hospital pharmacy with the personal sale of medicines by individual physicians. In this context, the focus is on the institutional service provided by the hospital in accordance with legal provisions.

Practical Issues Regarding Registration and Monitoring

While the law mandates registration and certification, the question of how these provisions are implemented in practice remains significant. The Department of Drug Administration (DDA) has consistently emphasized the requirement that the sale and distribution of medicines must take place only through registered sales outlets, pharmacies, or dispensaries. The existing legal framework—comprising various acts, rules, and codes—includes the 'Code for the Sale and Distribution of Medicines, 2080.'

When medicines are dispensed from a clinic, health institution, or any other location, the scope of monitoring includes verifying whether the facility is registered in accordance with the law, whether it employs the necessary qualified personnel, the adequacy of storage conditions, and whether proper records of procurement and sales are maintained. Furthermore, it is crucial to ensure that a bill or sales record is issued when medicines are provided to patients, that batch numbers and expiry dates are clearly identifiable, and that the source of the medicines can be verified. The Drug Registration Regulations, 2038 (1981) mandate that individuals, shops, or firms engaged in the sale and distribution of medicines must be registered and obtain a certificate. Therefore, beyond formal (paper-based) registration, it is crucial to examine the alignment between documented records and actual on-the-ground practices through field monitoring.

What should the regulatory body do now?

- Clearly define the legal boundaries between a physician providing medication to a patient and the operation of a commercial pharmacy.

- Ensure that the distribution of medicines from clinics and health institutions adheres to requirements regarding registration, record-keeping, storage, invoicing, batch number tracking, expiry management, and the presence of qualified, responsible personnel.

- Prevent situations where patients are compelled to purchase prescribed medicines from the same facility where they were examined, thereby safeguarding the patient's right to choose.

- Address potential conflicts of interest arising from the intersection of prescribing and dispensing, while upholding transparency and professional accountability.

- Conduct regular monitoring of clinics, health institutions, and pharmacies to ensure the effective implementation of legal and professional standards.