Rx for Bribe; Doctor Found Dead
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Rx for Bribe; Doctor Found Dead

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Doctor Charged with Corrupt Rx Practice Commits Suicide. box.com...

Doctor Charged with Corrupt Rx Practice Commits Suicide. box.com
Borojevic was to face charges for taking bribes as incentives to Rx drugs. Police found a suicide note to his wife saying, “I couldn’t take it anymore.” Borojevic’s story is a gruesome example of what is a growing problem: bribery and corrupt Rx

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Rx for Bribe; Doctor Found Dead Rx for Bribe; Doctor Found Dead Document Transcript

  • special report | febRUARY 2012 REUTERS/Djordje KojadinovicACCUSED: Dr. Nenad Borojevic in his office in Belgrade, October 2009. On the wall is a bust of HippocratesA Serbian doctor charged with accepting bribes from Western drug firms is found dead in aforest. As Big Pharma heads deeper into emerging markets, such scandals may increaseA prescriptionfor corruptionBy Aleksandar Vasovic and crossed by jogging paths. wife, from whom he was separated. It hadBen Hirschler Borojevic had been one of Serbia’s most been sent from a local post office. “I couldn’tBELGRADE, Feb 28 eminent doctors, a director of the Institute take it anymore,” it said.A for Oncology and Radiology. Now he was due Borojevic’s story, some of which emerges ccording to a signal from the in court in five days to face charges brought here for the first time, is a particularly electronic tag around his ankle, by the public prosecutor that he had taken gruesome example of what even people Nenad Borojevic last left his bribes from international drug companies in the global drugs business concede is a apartment building at 6.25 p.m as incentives to use their products. The growing problem: bribery and corruption inon Jan. 10. It was the festive season in Serbia; electronic tag was a condition of his 500,000 emerging markets. The 51-year-old cancerthe capital was enjoying the lull between euro ($660,000) bail. specialist was one of a group of 10 Serbia-Orthodox Christmas and New Year. The next day, around noon, a passer-by based doctors and drug company officials Police said Borojevic, a doctor, headed to found Borojevic hanging from a tree on a charged in 2010 with taking, or offering,Kosutnjak park, a popular wooded area in nylon rope five millimetres thick. Police more than 500,000 euros in bribes toBelgrade dotted with restaurants and criss- found a suicide note in the mailbox of his persuade the medics to use specific products.
  • The doctors are alleged to have personally new Bribery Act, which came into force last group is continuing. All the defendants havegained from the choice of medicines used; July, are both targeting drugs companies for pleaded not guilty, though one of the six drugthe drug company representatives with special scrutiny, providing new impetus for company representatives involved agreed aillegally offering the incentives. the industry to clean up its act. plea bargain and another turned witness for In recent years, Big Pharma has forked the prosecution.out billions of dollars to settle scandals “Mis-selling cases in theseinvolving improper promotion of medicines markets could become a OPERATION CRABin the United States. Now bribes paid to The probe of Borojevic, which police calledforeign doctors and other state employees significant legal threat for the Operation Crab, started with a tip-off inare shaping up as the next major legal industry.” March 2007, according to a police sourceliability threat for the industry. A Reuters involved in the investigation.examination of U.S. Securities and Exchange “There’s clearly a legal risk from violating At a later point, police received informationCommission (SEC) filings by the world’s top laws with the current drive into emerging from a former mistress of one of the accused,10 drug companies has found that eight markets, so mis-selling cases in these the investigator said, declining to name her.of them recently warned of potential costs markets could become a significant legal “After they broke up, she came to us andrelated to charges of corruption in overseas threat for the industry,” said Chris Stirling, recited everything – names, places, contacts,markets. European sector leader for pharmaceuticals how they operated, how much everyone One factor driving the trend is a search at KPMG in London. “The business practices received and from whom, when and where,”for new business. Companies whose in these countries are very different from said the investigator. “She even gave us someprofit margins have been squeezed in the the sort you find in Western Europe and the concrete evidence which helped us a greatdeveloped world are increasingly turning United States.” deal.”to thinly regulated emerging markets for Borojevic’s suicide - police have ruled Some of Serbia’s tabloid media said thegrowth. At the same time, U.S. and European out foul play - means certain aspects of informant was a former Serbian model,governments are toughening up on bribes his case, which is being investigated at a Katarina Rebraca, who herself, in a separatepaid by companies overseas. The U.S. national level, may never be known. The case, had in April 2010 faced charges ofForeign Corrupt Practices Act and Britain’s trial of the other men and women in the embezzling funds at a breast cancer charity REUTERS/Djordje KojadinovicPATIENTS: Inside the Institute for Oncology and Radiology in Belgrade in October 2009PHARMA CORRUPTION 2
  • For Borojevic, the alleged gains were significant, especially in a country whose GDP per capita the IMF puts at just $6,500 Bribery by sector a year. In total, he was accused of receiving The pharmaceutical industry ranks 13th a total of 11.2 million dinars ($138,000) in in perceptions of bribery, below defence kickbacks from drug companies. and the military. The higher the score, the Officials at drugs companies AstraZeneca cleaner an industry, according to executives Plc, Sanofi SA and Actavis confirmed they surveyed. were served in July and August 2011 with RANK SECTOR SCORE criminal indictments related to allegedly improper payments to physicians including 1 Agriculture 7.1 Borojevic at his state-run institute, and said 1 Light manufacturing 7.1 they had filed certain procedural objections. REUTERS/Djordje Kojadinovic 3 Civilian aerospace 7.0 Icelandic pharmaceutical company Actavis gave the most expansive statement: “The 3 Information technology 7.0 allegations include bribery of state officials 5 Banking and finance 6.9 in order to obtain preferential status when 5 Forestry 6.9 it comes to the sale of oncology products in Serbia,” said the company, which moved its 7 Consumer services 6.8 headquarters to Zug, Switzerland in 2011. 8 Telecommunications 6.7 All declined further comment on the 8 Transportation 6.7MODEL: Former model Katarina Rebraca, pictured proceedings. Also charged with allegedhere in 2007, was charged with embezzling funds bribery in the case were representatives of and storage at a breast cancer charity she ran. Borojevic was Roche, Merck KGaA and PharmaSwiss – a 10 Arms, defence 6.6called as a witness against her unit of Canada’s Valeant Pharmaceuticals and military International Inc – all of whom declined to 10 Fisheries 6.6she ran. Borojevic, the doctor, had been called comment.as a witness for the prosecution against her, 12 Heavy manufacturing 6.5although he died before testifying. REPS TAKE THE RAP 13 Pharmaceutical 6.4 Rebraca declined to comment. Her lawyer, In one instance, the police allege, Borojevic and healthcareDragan Mrakovic, said: “It is not in the best and his colleague Zoran Bekic, head of 13 Power generation 6.4interest of my client to give any information the Institute for Oncology and Radiology’s and transmissionwhatsoever” about the Borojevic case. “This paediatric oncology ward, received 95,000 15 Mining 6.3has nothing to do with my client’s case, nor euros from Goran Orlic, a representativedoes my client have anything to do with the for Actavis. Orlic allegedly paid the men for 16 Oil and gas 6.2pharmaceutical corruption case.” inside information about its business plans. 17 Real estate, property, The informant led police to a rented The Actavis representative received legal and businessapartment in Medakovic, a neighbourhood of immunity from prosecution in exchange for services 6.1communist-era apartment blocks and family his testimony ahead of the trial, the court 17 Utilities 6.1homes in Belgrade. Here a group of doctors said in a statement. Actavis said Orlic leftand drugs company sales representatives the company in 2009. Neither Bekic, the 19 Public works contracts 5.3would allegedly meet and hold “raunchy, loud paediatrician, or his lawyer would comment. and constructionparties with Belgrade babes, three or four Orlic could not be reached. Average 6.6times a week,” said the police investigator. It Another of those charged was Merckwas not possible to confirm who had rented KGaA’s representative, Jasmina Gutovic. She Source: Transparency Internationalthe apartment. reached a plea bargain with prosecutors In June 2010 police arrested Borojevic: the and admitted giving bribes, according to the months before his death, Borojevic wascharges against him and four colleagues the judge who heard her case. While Gutovic portrayed in Serbian media as a poisoner ofincluded running a criminal conspiracy was convicted, the court will not say what children, based on suggestions in the mediain cancer drugs from 2007 to 2009. The punishment she received while the rest of the that he had overprescribed.indictment said that the alleged scheme, case is being heard. Merck KGaA confirmed Borojevic was released on bail in Novemberwhereby drug company representatives she left the company in June 2011 and she 2011. He repeatedly denied all the chargesgave inducements to the doctors to use could not be reached for comment. against him, saying he was the victim of atheir companies’ products, had increased The indictment against Borojevic also media witch hunt. “Nothing is true from thesales of a number of generic chemotherapy states that he and colleagues did a deal indictment,” he said in a statement in Maymedicines as well as branded cancer with unnamed drug company sales staff 2011.medicines including Roche Holding AG’s to develop “new therapeutic applications” His lawyer, Strahinja Kastratovic, said thatAvastin and Erbitux, made by Merck KGaA of using their companies’ drugs, as a way of the day before Borojevic killed himself, heGermany. further boosting sales of the products. In had learned the apartment he had boughtPHARMA CORRUPTION 3
  • with his estranged wife would be seized by countries. Its 2011 Bribe Payers’ Index ranks golf days remain common, even though thethe court. “He said, ‘I can’t take this anymore, pharmaceuticals and healthcare 13th out of industry has reined in such hospitality in theI don’t know how to fight this or against 19 industries on probity – a lower ranking United States.whom I’m supposed to be fighting,’” said than defence firms, though above mining Temptations may increase as companiesKastratovic. He declined to elaborate. and construction. move into the developing world. IMS Health, “There are a number of classic red flags which analyses pharmaceutical industryTEMPTATIONS INCREASE for bribery that indicate the pharma sector trends, says 17 key emerging markets willCorruption is rife in Serbia, which is ranked is particularly vulnerable,” says Robert account for around 63 percent of worldwide86th out of 183 countries in Berlin-based Barrington, TI’s director of external affairs. growth in prescription drug sales betweenTransparency International’s corruption These include a tradition of gifts and 2010 and 2015.perceptions index. The drugs business hospitality, a lack of transparency over “It is almost guaranteed that everyis particularly exposed to corruption, pricing and the need for regulatory approval multinational pharmaceutical company isTransparency International says: in everything. going to end up with these issues and is goingpharmaceuticals create vast opportunities In many parts of the world lavish gifts such to have to go through a painful experience,”for graft across both rich and poor as all-expenses-paid trips to resorts and says one in-house lawyer at a major U.S. drugmaker. “Frankly, the odds are stacked against companies.” ‘NOT ETHICAL, BUT UNIVERSAL’ The Serbian charges and claims of corruption extend beyond Borojevic and his colleagues. In his defence, Borojevic always insisted that he could not approve drug purchases alone, but passed on recommendations to the state-run Department of Health Insurance. That itself is the target of other, unrelated corruption charges brought by the public prosecutor against its former head, Svetlana Vukajlovic, who has been in pre-trial detention since September 2011. An example from another Balkan country, Greece, underlines how ingrained such practices can be. Earlier this month, London- based Smith & Nephew Plc, Europe’s biggest maker of artificial knees and hips, agreed to pay $22 million to settle SEC allegations that it bribed doctors in Greece to use its products. Among documents the SEC released as part of the dossier was a note jotted down in 1999 by an unnamed in-house lawyer for the company. “Pay surgeon to use prod(uct),” it read. “Not legal or ethic; but universal.” In that case, the company’s Greek distributor sent an email to the firm’s U.S.- based head of international sales seeking to maintain access to one of the slush funds used to pay doctors to buy S&N products: “I absolutely need this fund to promote my sales with surgeons, at a time when competition offers substantially higher rates,” he wrote. The fund’s “only reason for being is the need for cash incentives, a real pain in the neck REUTERS/STRINGER but an unavoidable fact of Greek life.” S&N CEO Olivier Bohuon, who took office in 2011, long after the alleged bribery occurred, said the company had moved on but the episode showed the need to remain vigilant.WIDER CHARGES: Svetlana Vukajlovic, former head of the Department of Health Insurance, has been inpre-trial detention on separate corruption charges since September 2011. Over the past year eight of the world’sPHARMA CORRUPTION 4
  • top 10 drugmakers - Pfizer Inc, NovartisAG, Merck & Co Inc, Sanofi, AstraZeneca,GlaxoSmithKline Plc, Johnson & Johnson Pill Pushers growth. $1.2 trillionand Eli Lilly & Co - have all warned that they Emerging markets drive pharmamay face liabilities related to charges of GLOBAL PHARMACEUTICAL SALES 1.0corruption in numerous overseas markets. Emerging markets Investigations into potential wrongdoing Developed countriesby pharmaceutical firms cover activities Rest of World 0.8in countries including Argentina, Brazil,Canada, China, Germany, Italy, Poland,Russia and Saudi Arabia, according to 0.6company filings. They also involve possibleimproper conduct of clinical trials, which areincreasingly being run in lower-cost Asian or 0.4East European countries.‘JUST SAY NO’ In 2005, emergingOne reason such cases are surfacing now is markets 29% represented in 2015the renewed vigour with which U.S. officialshave enforced its foreign corruption law 12% of global sales. ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15since November 2009. That’s when U.S. Source: IMS Healthassistant attorney-general Lanny Breuertold a pharmaceutical conference: “We willbe intensely focused on rooting out foreignbribery in your industry.” The 1977 Foreign Corrupt Practices Act to say if they planned to follow the Serbian last year, after disclosing voluntarily to U.S.makes it illegal for U.S. companies and probe with their own investigations. authorities back in 2007 that it had madeforeign firms whose stock is traded in the Some drug firms have already started payments to doctors in Poland, Romania andUnited States to bribe government officials to come clean. In the first case of its kind, Greece who chose to use J&J medicines andin foreign countries. Officials at the U.S. SEC Johnson & Johnson settled for $78 million surgical implants.and Department of Justice (DOJ) declined with U.S. and British authorities in April Pfizer, which in 2004 became the first In Vietnam, study finds bribes dominate medicine prices How to measure medical corruption? use particular medicines, and to persuade pressure to achieve sales targets often Tuan Anh Nguyen, a researcher at Hanoi procurement officers inside hospitals to buy means representatives ignore this and give University of Pharmacy, believes informal them. The biggest share went to doctors. money to prescribers. payments to doctors are “a dominant Nguyen said the problem was worse At other times, multinationals pay for factor” in high prices of the older off-patent with generic medicines sold by Asian one-off benefits like luxury holidays that drugs that make up the lion’s share of companies, although his study did not would be prohibited under anti-kickback prescriptions in many emerging markets. name any firms. In Vietnam the price of rules adopted by the drug industry in the After interviewing doctors, these is sometimes even higher than that United States. pharmaceutical companies, government of the original branded product, in order to Doctors surveyed said they took the officials and pharmacists in both the private recoup payments made to doctors by drug cash and non-cash offers to make up and state hospital sectors, he concluded companies trading these medicines. for low salaries, and it was common for in a study published last year that around But Western drug firms are not immune: commissions from the pharmaceutical 40 percent of the drugs’ price in Vietnam pharmaceutical company representatives industry to become the main source of is typically spent on offering financial who spoke to Nguyen reported that doctors income for some physicians, leaving those inducements to doctors. typically expect a commission of about 15 reputable doctors who are determined to “When I talk to colleagues in some other percent from European drug makers; the stay “clean” out in the cold. Asian countries they say the situation is the figure they look for from Asian producers is It’s a situation one foreign drug salesman same,” he told Reuters. nearer 40 percent. says has turned the system upside down: His investigation broke down the The study, which was presented at the “Now, the worse the doctors, the more different legal and illegal components that International Conference for Improving money they have. It’s ridiculous.” contribute to the cost of drugs in Vietnam, Medicines in Antalya, Turkey, last October, and found 40 to 60 percent of the final price found multinational companies tend to could be spent to induce prescribers to prohibit bribes, officially at least, although (Ben Hirschler)PHARMA CORRUPTION 5
  • pharmaceutical company to volunteer a corporation to report improper behaviour representative, you will encounter peopleinformation about past wrongdoings to the by either its own staff or outside contractors. who will ask for gifts, or other inducements.DOJ and the SEC, is likely to be the next big In some cases, this has already meant And they will threaten to take their businessfirm to settle. The world’s biggest drugmaker, radical change. AstraZeneca, for example, elsewhere, if you don’t acquiesce. But weit reached an agreement in principle with U.S. said last May it was ending all payments to have made it clear that our sales force haveauthorities towards the end of last year and is doctors attending international scientific and to say no.”set to finalise a deal during the first half of medical congresses.2012, according to people familiar with the “I know that this is not easy,” Chief Executive (Aleksandar Vasovic reported from Belgrade,discussions. David Brennan told a conference at the time. Ben Hirschler from London; Edited by Sara Under U.S. and British law, the onus is on “I know from my own experience as a sales Ledwith and Simon Robinson) REUTERS/Ivan MilutinovicCARE CENTRE: The Institute for Oncology and Radiology in Belgrade, where Borojevic worked For more information SIMON ROBINSON sara ledwith BEN HIRSCHLER Enterprise Editor, MIDDLE EAST AND ASSISTANT enterprise editor ben.hirschler@thomsonreuters.com AFRICA sara.ledwith@thomsonreuters.com ALEKSANDAR VASOVIC simon.robinson@thomsonreuters.com aleksandar.vasovic@thomsonreuters.com © Thomson Reuters 2012. All rights reserved. 47001073 0310 Republication or redistribution of Thomson Reuters content, including by framing or similar means, is prohibited without the prior written consent of Thomson Reuters. ‘Thomson Reuters’ and the Thomson Reuters logo are registered trademarks and trademarks of Thomson Reuters and its affiliated companies.