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MANCHESTER UNIVERSITY – 24 FEBRUARY 2016
Sophie Peresson
Director, 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.
transparency.org.uk
transparency.org.uk
CORRUPTION ABUSES
transparency.org.uk
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
transparency.org.uk
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 AND
HEALTHCARE OUTCOMES
FOR THE BENEFIT OF
ALL 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
transparency.org.uk
PRIORITISING IN THE
PHARMACEUTICAL & HEALTHCARE
VALUE CHAIN
Research &
Development
Manufacturing Registration Marketing
ProcurementDistribution
Prescription,
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.
transparency.org.uk
Sophie Peresson
Pharmaceuticals and Healthcare Programme
Transparency International UK
Sophie.Peresson@transparency.org.uk
www.transparency.org.uk - www.transparency.org
transparency.org.uk

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Corruption in the pharmaceuticals & healthcare sector

  • 1. MANCHESTER UNIVERSITY – 24 FEBRUARY 2016 Sophie Peresson Director, Pharmaceuticals & Healthcare Programme - Transparency International UK
  • 2. 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. transparency.org.uk
  • 4. CORRUPTION ABUSES transparency.org.uk 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.
  • 5. 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
  • 6. transparency.org.uk 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
  • 7. IMPROVING GLOBAL HEALTH AND HEALTHCARE OUTCOMES FOR THE BENEFIT OF ALL PEOPLE OF ALL AGES OUR GOAL
  • 8. 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.
  • 9. 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
  • 10.
  • 11.
  • 12. What is the problem? Five key areas identified  Research & Development  Manufacturing, including counterfeits  Marketing practices  Registration processes  Procurement and distribution
  • 13. transparency.org.uk PRIORITISING IN THE PHARMACEUTICAL & HEALTHCARE VALUE CHAIN Research & Development Manufacturing Registration Marketing ProcurementDistribution Prescription, Dispensing & Health Services Patients Selection
  • 14. 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
  • 15. EXAMPLES OF CORRUPTION IN THE HEALTH SECTOR
  • 16. 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).
  • 18. 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.
  • 19. 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.
  • 20. 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.
  • 22.
  • 23. 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. transparency.org.uk
  • 24. Sophie Peresson Pharmaceuticals and Healthcare Programme Transparency International UK Sophie.Peresson@transparency.org.uk www.transparency.org.uk - www.transparency.org transparency.org.uk

Editor's Notes

  1. What are the main corruption vulnerabilities?
  2. We can compare countries perceived corruption CPI -- 2/3 have serious corruption problems….and corruption has long term negative impact on growth and development   Would be good to zoom in on links between corruption and growth where we can (and again, identify the gaps). As you know, the correlation between growth and corruption is well-established. Main point is that there could be a positive correlation (corruption fuels growth) in the short-term (China?, Eq Guinea), but no evidence for such a correlation in the long term. These short-term exceptions are usually unique (e.g. either natural resource situations or authoritarian regimes). See http://www.economist.com/news/china/21610316-weighing-economic-impact-anti-corruption-campaign-anti-graft-anti-growth   In the latest CPI press release, we made the point about corruption endangering “clean growth” (http://www.transparency.org/news/pressrelease/corruption_perceptions_index_2014_clean_growth_at_risk)   Limitations: Obviously, questions of causality are still debated among the experts (this debate is v technical). Perceptions of perception