Government watchdogs 'turn a blind eye' to pharma corruption, report says

By Tracy Staton Jun 2, 2016 12:09pm

The pharma business is ripe for corruption worldwide, watchdogs are fond of saying, and a new report from Transparency International argues that governments and drugmakers show “a willful degree of blindness” to the problem.

The organization cast a wide net in its critique of the industry and its regulators. Transparency International pointed to billions in spending on promotions to doctors in the U.S., well-financed lobbying efforts and selective publication of trial data--even the use of ghostwriters to craft medical journal articles.

There’s no lack of illustrative anecdotes: To mention the most notorious, GlaxoSmithKline ($GSK) paid a $493 million fine for bribery in China in 2014. A series of Big Pharmas have paid fines in the U.S. for violations of the Foreign Corrupt Practices Act, including Johnson & Johnson ($JNJ), Bristol-Myers Squibb ($BMY) and Pfizer ($PFE). And companies have shelled out billions of dollars in fines and penalties to settle kickback charges and other marketing allegations.

"It is shocking that despite scandal after scandal involving pharma companies, still policy makers simply are not taking seriously the corrosive effect of corruption," Sophie Peresson, its head of pharmaceuticals and healthcare, said in a statement. "The red flags are being ignored.”

The wide range of laws and cultural practices around the globe complicates the problem; some countries have stiff regulations that they broadly enforce, while others lack adequate rules or enforce them with a wink and a smile, or both. There's little hard data to quantify the problem. And beyond Big Pharma are many little pharmas trying to promote their drugs and grab government supply contracts, too, complicating numbers--and reform efforts--still further.

Transparency International identified weaknesses throughout the pharma supply chain, from R&D and manufacturing all the way through procurement and distribution. The advocacy group backed broader adoption of policies used to keep a lid on misbehavior, such as tight control and oversight in procurement. The report also suggests stepped-up enforcement of existing rules and bigger sanctions for those who break them.

“To genuinely diminish corruption in the pharmaceutical sector,” the report said, “national governments must show commitment to tackling the issues. Regardless of a company’s revenue, an official’s seniority or a healthcare professional’s prestige, anyone suspected of corruption must be investigated and sanctions applied.”

- get the Transparency International report

bribery corruption kickbacks GSK Novartis Pfizer