Shocking corruption in drug companies

Drug companies bribe doctors directly so their medicines are more likely to be prescribed.

GlaxoSmithKline or GSK, the seventh largest drug manufacturing company in the world with a  total revenue of US$ 36,566 million in 2015, pleaded guilty to unlawful promotion of a drug by name paroxetine for depression among children below 18 years of age.

GSK knew well from its own studies that when the drug is administered to children below 18 years it can actually increase the incidence of suicide in children. Pleading guilty of its misdeed, GSK paid $3 billion, the largest healthcare fraud settlement in the US history, to resolve its criminal liability.

In 2013, generic drug manufacturer Ranbaxy had pleaded guilty to charges relating to the manufacture and distribution of adulterated medicines made at its manufacturing facility. For this, the company agreed to pay a criminal fine totalling $150 million. In 2011, Johnson & Johnson (J&J) paid $70 million to settle claims it bribed doctors in Greece, Poland and Romania to prescribe its medicines.

The above examples are just a tip of the iceberg, of a recently released report titled “Corruption in the pharmaceutical sector – Diagnosing the challenges” by Transparency International.

Leaders of several international organisations have ack-nowledged the ill-effects of such corruption. Corruption in heal-thcare is “public enemy number one,” as stated by the World Bank president. According to the UN secretary general, “Corruption is a threat to development, democracy and stability.”

Drug companies bribe doctors directly so that its medicines are more likely to be prescribed. In 2004, it was estimated that the US drug industry spent $ 20.4 billion towards medical representatives visiting doctors. In the same year, samples distributed to doctors was estimated at $ 15.9 billion.

All this unduly influences doctors prescribing habits. This particular report focuses on corruption in pharmaceutical sector because purchase of medicines is a major part of the budget in any country’s health care. For example, it is estimated that one-fifth of the entire budget of health of most countries is on purchase of medicines only.

Basically, there are four main reasons why corruption in drug companies is more challenging to be examined. Firstly, there is a general lack of concrete data to assess the prevalence of corruption among drug companies. Though it is well known that corruption exists in pharmaceutical sector but the complexity of the issue make it challenging to verify where and when corruption occurred. Secondly, it is well recognised that legal regulatory frameworks have an important role. But unfortunately, most existing laws and institutions are often too weak, leaving it to evolve a new legal system that needs to be put in place.

Thirdly, pharmaceutical companies are known to fund candidates during elections. It is estimated that Pfizer spent $25 million during the 2009 elections in the US. Such funding will favour improving the companies’ profits and negatively impact public health objectives.

Also, drug companies directly reach out to doctors to market their medicines, encouraging them to prescribe newer, more expensive medicines that often lack innovation and do not provide therapeutics advantages over the older drugs. This increases unnecessary public health spending on purchase of medicines. Fourthly, a genuine commitment to anti-corruption policies by heads of governments is absolutely lacking in most countries.

Codes of conduct

Measures to lessen the corrupt practices are mostly done through codes of conduct that are established at national levels. These codes make it mandatory for the doctor to disclose all his/her connections such as honorarium and funding that are received from the drug companies. All these codes will need robust monitoring mechanisms to ensure that such codes are implemented properly, along with enforcement of sanctions.

For example, in 2014, the Physician Payment Sunshine Act was passed in the US which requires companies to disclose that they made gifts to doctors through an online database, if a payment to doctors is over $10.

In Europe, the European Federation of Pharmaceutical Industries and Associations has implemented a similar code to the “Sunshine Act”, beginning from June 2016. In the UK, the Sunshine Act will require all the public hospitals to keep a register of gifts and hospitality given to staff from drug companies.

In the 69th central council meeting of the Indian Medical Association (IMA - the association of Indian doctors with over two lakh members), a detailed discussion on the proposal submitted by PepsiCo and Dabur  for endorsement of Quaker Oats and Tropicana juices of PepsiCo and Odomos cream of Dabur took place. It was unanimously decided by IMA to endorse the products and in exchange, PepsiCo was to pay Rs 46 lakh per annum for three years and Dabur was to pay Rs 23 lakh per annum for three years.

The deal did not materialise because of the timely exposure by the whistle blowers and the media. But this speaks of volume of corruption in India by drug companies. All this may need another study to be under taken by Transparency International!

(The writer is President, Drug Action Forum-Karnataka)

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