corruption in the pharmaceuticals & healthcare sector

MANCHESTER UNIVERSITY – 24 FEBRUARY 2016

Sophie PeressonDirector, Pharmaceuticals & Healthcare Programme - Transparency International UK

CORRUPTION IN THE HC SECTOR

Source: Savedoff, W.D. and Hussmann, K. (2006): Why are health systems prone to corruption? In:Transparency International (ed.) Global Corruption Report 2006.

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CORRUPTION ABUSES

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Political and regulatory

 Healthcare legislation and controls being compromised by corruption. 

Research and development

 Incomplete disclosure of scientific evidence and unethical clinical trial practices. 

Patents and registration

 Patent ever-greening and bribing/withholding of information to obtain licences.

Product quality  

Counterfeit, falsified and substandard products.

Promotion  

Mis-marketing and unethical promotion driven by incentivised sales targets. 

Health service delivery

 Demand side corruption leading to reduced access to healthcare. 

Procurement 

 Conflicts of interest, including the selection of essential medicines. 

Expenditure fraud risk

 The risk of diversion of public resources and abuse in the expenditure of large healthcare delivery budgets. 

TI’s new Pharmaceuticals& Healthcare Programme

• Why are we doing it?• What change are we seeking?• What is the problem?• How will we bring about change?• Corruption and the development agenda

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A GLOBAL PROBLEM

• $7 trillion annual global spend

• 17% of people worldwide stated they had paid a bribe

when dealing with the medical sector Global Corruption

Barometer, 2013

• Estimate 10-25% public procurement funds lost to

corruption

• Pharmaceutical & healthcare sector supply chains are

global, long and complex

IMPROVING GLOBAL HEALTH ANDHEALTHCARE OUTCOMES

FOR THE BENEFIT OFALL PEOPLE OF ALL AGES

OUR GOAL

Why are we doing it?

• Economic impact – when large amounts of public funds are wasted;

• Health impact – the waste of public resources reduces the government’s capacity to provide good quality services and products; patients may turn to unsafe medical products available on the market instead of seeking health services, leading to poor health outcomes for the population;

• Government trust impact – inefficiency and lack of transparency reduces public institutions’ credibility. This not only erodes the trust of citizens but can also decreases foreign investment in the health sector and levels of health aid.

What change are we seeking?• Purpose: to achieve genuine change in the pharmaceutical

& healthcare sector through reducing corruption and promoting transparency, integrity and accountability

• Which means… Greater understanding of corruption in the sector Acknowledgment of the problems Development and acceptance of solutions Greater transparency and accountability Reduced levels of corruption Better outcomes for patients

What is the problem?

Five key areas identified Research & Development Manufacturing, including counterfeits Marketing practices Registration processes Procurement and distribution

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PRIORITISING IN THE PHARMACEUTICAL & HEALTHCARE VALUE CHAIN

Research & Development Manufacturing Registration Marketing

ProcurementDistributionPrescription, Dispensing & Health Services

Patients

Selection

How will we bring about change? Advocacy and policy analysis

Research Standard-setting Multi-stakeholder dialogue Advocacy to companies, governments, regulators,

global health community In practical terms

Publishing typologies and trends Illustrative research into key areas Developing and publishing indices Producing good practice guidance

EXAMPLES OF CORRUPTION IN THE HEALTH SECTOR

NHS - FUNDING AND STRUCTURE

• Funding for the NHS comes directly from taxation and is granted to the Department of Health by Parliament.

• For 2013/14, the total NHS budget was around £109.721billion.

• NHS is an independent body, at arm’s length to the government.

• Collection of hundreds of organisations, the majorities of these are the responsibility of clinical commissioning groups (CCGs).

FUNDING AND STRUCTURE

FRAUD CONSPIRACY AGAINST NHS

“Operating theatre experts jailed for fraud conspiracy against NHS” (NHS Protect)

A team of perfusionists conspired to defraud Basildon and Thurrock University Hospitals NHS Foundation Trust for 9 years ending in 2014.

The four directors of London Perfusion Science Ltd (LPS) all held full time jobs at Basildon Hospital while working privately at numerous other NHS hospitals.

Between 2007 and 2011 salaries were paid for 14,000 hours that were not actually worked.

The total loss to the NHS was £430,000.

HONDURAS - PATIENTS PAY THE COST OF CORRUPTION

•In 2015 Honduran investigators discovered that a national pharmaceutical company, in part owned by the congressional vice president, was involved in a scandal allegedly cost the Honduran public health system as much as $120 million.

•The scheme involved selling overpriced and in some cases defective medicines to government. 11 cases have been identified in which it appears women died after taking the defective drugs.

BANGLADESH - CORRUPTION RIFE IN DRUG ADMINISTRATION

•A report by Transparency International Bangladesh (Jan 2015) found extensive evidence of corruption within a national drug administration.

• Money was received for issuing new licenses for pharmaceutical companies, registering new drugs, approving packaging and gaining export approval.

•Money changing hands ranged from US$5 to US$20,000, with evidence suggesting that small pharmaceutical companies were more prone to such behaviour.

CORRUPTION AND DEVELOPMENT

UK Aid Strategy

• Corruption holds back development. It is bad for the poorest, and bad for business.

• It corrodes the fabric of society and public institutions.

• In its Aid strategy, the UK restates its commitment to stamping out corruption and vows to continue expanding it. The UK will hold a global anti-corruption summit in London in 2016 to drive this agenda forward.

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Sophie PeressonPharmaceuticals and Healthcare Programme

Transparency International UK

Sophie.Peresson@transparency.org.uk

www.transparency.org.uk - www.transparency.org

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