Transparency International Addresses “Corruption in the Pharmaceuticals and Healthcare Sector”

At this year’s International Pharmaceutical Compliance Congress and Best Practices Forum, Robert Barrington, the Executive Director of Transparency International, presented on “Corruption in the Pharmaceuticals and Healthcare Sector.”

Transparency International (TI) is a non-profit, non-partisan organization founded to combat corruption, and is best known for their Corruption Perceptions Index, which ranks countries by perceived levels of public sector corruption. Last year, TI announced that they were “taking up the challenge of understanding and combating corruption” in the pharmaceutical and healthcare sector.  Barrington shed some light on his organization’s new focus on pharma.

Corruption in the Pharmaceutical and Healthcare Sector

TI’s mission is to understand the nature of corruption, states Barrington–“what it is, where it goes on, how prevalent, and how it operates in reality–in order to provide constructive solutions.” In speaking to the audience of pharmaceutical compliance professionals, Barrington noted that he purposefully titled his presentation “Corruption” in the pharmaceutical sector rather than “Integrity” or “Ethics” in the sector. Governance, integrity, and ethics are means to an end: improving patients’ lives, he notes. However, “the lives of people around the world…is often blighted by corruption; and nowhere more so than in the healthcare sector.”

Transparency International outlines a number of the egregious ways they believe corruption hurts patients:

Whether it is a patient denied access to treatment and medicines because they cannot afford to bribe, or the effect of counterfeit drugs with no medicinal value, the theft of a national health budget by a corrupt public official, or the distortion of regulatory decisions through inappropriate lobbying, corruption in the Pharmaceutical & Healthcare sector damages lives.

TI also outlines the “scale of the problem,” including that global spending on health was $7.2 trillion in 2012. Barrington noted that even a small percentage of corruption in such a huge sector is a large amount of money, especially since the money is meant to be spent for patient well-being. In 17 countries surveyed in 2013, TI reports that over 70 percent of the public believed that medical and health services were corrupt or extremely corrupt. Furthermore, in his talk, Barrington noted that 17 percent of people worldwide stated that they had paid a bribe when dealing with the medical sector at least once in the past year, and that in some countries it was as high as 60 percent.

Transparency International’s Areas of Focus

Barrington outlined that TI’s purpose is to “achieve genuine change in the pharmaceuticals and healthcare sector through reducing corruption and promoting transparency, integrity, and accountability.”

TI began a pilot project last year in order to gather interest into whether they should get involved in the pharmaceutical and healthcare sector. Barrington noted that there was tremendous support for an organization like TI, with “no skin in the game,” to look into corruption here. In the organization’s outreach and stakeholder engagement, Barrington noted that there was a lot of blaming from various interests—private, global healthcare, NGOs, academics—without taking responsibility for their smaller shares of the problem. “Forgive me if this sounds rude, but some people really hate you,” Barrington said to the pharma audience. “There is a real sense that this industry is fundamentally corrupt.” He stated that this was not TI’s view, but noted that the organization is aware they could be entering a “minefield” of conflicting views in its latest pursuit.    

In the course of dealing with the stakeholders, TI narrowed down five initial priority areas they will focus on in the next few years of what Barrington states is a ten year plan:

• (1) Procurement and distribution
• (2) Marketing practices
• (3) Manufacturing including counterfeits, which Barrington notes is a huge issue in developing countries. He also notes that TI would focus on “purely corrupt” activities, such as bribes to get fake permits.
• (4) Registration processes: Barrington states that certain stakeholders have a “huge unease about the lobbying that takes place with regards to regulators,” and that TI will be focused on potentially corrupt lobbying efforts.
• (5) Research & Development: Barrington notes transparency in R&D has become a major topic of discussion recently. People are “passionate” that the pharmaceutical industry has it “fundamentally wrong,” regarding their motives and priorities. 

Barrington notes that through outreach and research, Transparency International has learned some important aspects to lead them to their goal of reducing corruption in the healthcare industry. First, he stated that understanding corruption does not start and end with pharma—TI needs to look at the entire healthcare chain. Barrington also notes that patients are angry about corruption around the world in a way that they have not been before—both at those complicit in corruption and the causes of corruption. “The reaction from the streets would not have been the same five years ago,” he states, and he believes the reason is the transparency revolution. Whereas before when patients may have been asked to pay a bribe to receive healthcare that should be free, they might’ve thought they were an “isolated incident and completely helpless.” Now, through social media, patients can band together and make their voice heard, Barrington states.

Barrington outlined how Transparency International will seek to leverage its experience gleaned from overseeing other industries, including the defense sector, in its oversight of pharmaceuticals. Barrington noted that if pharma thinks they’ve been under scrutiny already, “which I think you have,” he said, the industry should prepare for more. This is not due just to TI, he clarified—“we are just responding to a demand that is out there from patients who wonder why there is all this money being spent without getting better healthcare.”

In addition to improving patient access to care, Barrington is hoping for a level global playing field, where companies who play by the rules are not severely disadvantaged commercially.

“There are going to be challenges for the compliance functions,” Barrington noted. “The role of lobbying, questions about research—these aren’t things that normally lie in the compliance function.”

Finally, in a bit of a cryptic conclusion, Barrington predicted his organization’s increased scrutiny into pharma will be “disruptive.”  “If our program in the pharmaceutical and healthcare sector is anything like it’s been in the defense and security sector, then you can expect to hear a lot more from us.”