Guest Post: More Transparency Is Needed to Fight Grand Corruption in the Pharmaceutical Sector

Today’s guest post is from Till Bruckner, the founder of TranspariMED:

In the pharmaceutical sector, public agencies are routinely handing over billions in public money to private companies for products whose value they cannot accurately assess, because the vendors control the flow of information generated by clinical trials. (Even the purchasing price is often kept secret, but that is another story.) If we observed this sort of opacity in the public procurement sector, it would immediately raise red flags. If public contractors were taking billions from governments in exchange for products of dubious quality that the governments cannot assess, the anticorruption community would be–rightly–up in arms. But for the pharmaceutical industry, this is business as usual.

Consider, as one particularly egregious example, what can only be described as an $18 billion heist of public money by a pharma company. In 2006, governments around the world began stockpiling Tamiflu, an anti-retroviral drug, due to fears that outbreaks of bird flu (and later swine flu) could turn into a lethal global pandemic. The evidence available at the time suggested that the drug was safe and effective at reducing the symptoms of influenza. In total, 96 counties accumulated enough Tamiflu to treat 350 million people. Then, in 2009, a doctor noticed that the results of eight clinical trials of Tamiflu were missing from the public record. (Worldwide, around half of all clinical trials have never reported their results.) After a struggle lasting four years, independent scientists finally got the company to turn over the relevant data from these trials—and concluded that the drug did little, if anything, to help patients.

This example is especially egregious, but it is not otherwise exceptional. Amazingly, comprehensive information on the safety and effectiveness of drugs is not only inaccessible to independent scientists, but also to government agencies. When a drug company applies for a marketing license, it has to submit detailed documentation from every relevant trial to regulatory agencies such as the U.S. Food and Drug Administration (FDA). Regulators review these submissions, called Clinical Study Reports (CSRs) – and then promptly lock them away in their confidential archives. This is especially frustrating for scientists working for health technology agencies, who are tasked with assessing the cost-effectiveness of different drugs but are often unable to access CSRs. To date, only the European Medicines Agency systematically releases (some) CSRs.

Politicians have tried to bring transparency into the sector, but the laws they pass often remain unenforced. In the United States, the 2007 FDA Amendment Act made it compulsory for companies and universities to publish the summary results of some clinical trials on public registries. (Summary results are a kind of “executive summary” of a clinical trial; they are far shorter and less detailed than CSRs, but still better than nothing). In 2015, an investigation by STAT News found that pharmaceutical companies routinely violated the law. The law stipulates a fine of up to $10,000 for every day a result is overdue. In theory, Big Pharma has already racked up over $25 billion in fines. In practice, the FDA has yet to collect a single cent. In the European Union, a similar regulation exists, but there too it remains unenforced by national agencies. In Britain, a 2013 parliamentary inquiry called for greater transparency, but its recommendations were largely ignored.

Last December, a coalition of four health integrity organisations issuing a wake-up call for governments to finally get serious about clinical trial transparency. Transparency International Pharmaceuticals & Healthcare (PHP), TranspariMED, Cochrane, and the Collaboration for Research Integrity and Transparency (CRIT) released a study that documents in detail how opacity in the sector harms patients, prevents public health agencies from making informed decisions, wastes public health funds, slows down medical progress, and exposes shareholders to substantial risks. The study also shows that clinical trials can be made significantly more transparent without introducing new legislation. Public research funders could demand that grantees report the results of publicly funded trials. Regulators could make continued market access conditional on companies agreeing to make CSRs publicly available. And in many cases, simply enforcing the rules already on the book could make a huge difference – and the costs of enforcement could easily be covered by imposing fines for noncompliance.

The medical research community has long called for greater transparency in medical research. The AllTrials campaign, which calls for all clinical trials to be registered and fully reported, has attracted the support of over 700 groups, including the American Medical Association and dozens of patient groups, and TranspariMED is currently building a broader coalition to push for greater transparency in the sector. It’s high time for the wider anticorruption community to join the fray.

Guest Post: Catalyzing Anticorruption Efforts in the Pharmaceutical Sector–Collaboration Is Key

Michael Petkov, Programme Officer for Transparency International’s Pharmaceuticals & Healthcare Programme, contributes the following guest post:

It will come as no surprise to readers of this blog that the pharmaceutical sector has extensive corruption risks: the sector is extremely complex, with multiple actors, high-value products, large-volume contracts, and a high degree of information asymmetry. But despite these well-known risk factors many actors in the pharma sector are failing to produce and enforce adequate anticorruption policies. Key decision-makers in the pharma sector frequently do not perceive corruption as an important issue and often do not display a genuine commitment to anticorruption efforts.

A recent paper published by Transparency International and the Leslie Dan Faculty of Pharmacy at the University of Toronto identifies several overarching challenges that are hampering efforts to minimize corruption in the pharma sector, and posits key areas for action including the importance of harnessing technology to minimize corruption vulnerabilities and of increasing the monitoring, enforcement, and sanctions of actors. Because of the complexity of the sector, collaboration is essential to making progress on all of these fronts. After all, a key difficulty for tackling corruption in the pharmaceutical sector is the fact that the medicine chain stretches across national borders. It is encouraging that governments came together at the London Anti-Corruption Summit and recognized the need for national institutions to share relevant information with their peers in other countries. Similarly, multi-stakeholder initiatives such as the European Healthcare Fraud and Corruption Network are excellent opportunities for all types of actors to come together, share information, and collaborate with others to take action.

There are two other ways in which greater collaboration is critical for making progress on the fight against corruption in the pharma sector: Continue reading

Fact-Checking the FCPA Scaremongers

In my last post, I made a disparaging in-passing reference to assertions, by some critics of the US Foreign Corrupt Practices Act (FCPA), that companies could get in FCPA trouble if they do things like buy a foreign government official a cup of coffee, take her to a reasonably-priced business meal, cover her taxi fare, etc. In my view, that’s just wrong, both because the US government would not bring such a case, and because the FCPA wouldn’t cover such isolated, modest benefits. The reason, as the DOJ/SEC FCPA Resource Guide explains, is that such benefits, without more, would not be offered “corruptly”–that is, with the wrongful intent of inducing the official to misuse her official position). I described those who suggest that the FCPA would criminalize such minor benefits as “FCPA scaremongers.”

My use of that the term “scaremonger” seems to have touched a nerve with Professor Mike Koehler–the self-described “FCPA Professor”–who had this to say in his comment my earlier post:

Scaremongering? Recent FCPA enforcement action have included allegations about flowers, cigarettes, karaoke bars, and golf in the morning and beer drinking in the evening.

I responded by asking Professor Koehler to identify the most ridiculous example of an actual FCPA settlement in which a trivial benefit was the sole basis of the enforcement action, as opposed to a small part of a larger scheme to corrupt government officials into misusing their authority. Professor Koehler answered:

The following is a factual statement: recent FCPA enforcement action have included allegations about flowers, cigarettes, karaoke bars, and golf in the morning and beer drinking in the evening.

I take the position that the DOJ/SEC include such allegations in FCPA enforcement actions for a reason and not just to practice their typing skills.

I again asked for an example. Professor Koehler’s response was to send, not the name of any individual case, but rather the links to the DOJ and SEC sites with all enforcement documents, suggesting that I could go through them myself to find “numerous examples of inconsequential things of value” included in the government allegations. He also referred to “several speeches” by SEC enforcement chief Andrew Ceresney (I actually think it’s one speech, given by Mr. Ceresney in November 2015) that supposedly acknowledged the government’s sweeping view of FCPA-prohibited conduct.

Having tried unsuccessfully to get Professor Koehler to point me to a specific example, I did a bit of digging on my own to see if I could find out if it’s really true that the DOJ and/or SEC have brought FCPA enforcement actions in cases that involve nothing more than “flowers, cigarettes, karaoke bars, and golf in the morning and beer drinking in the evening.” What I found makes me even more confident that I was fully justified in my use of the term “FCPA Scaremongers,” with Professor Koehler as perhaps the FCPA Scaremonger-in-Chief. Here are the cases to which I’m fairly sure Professor Koehler was referring: Continue reading