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Pharma cited in EU corruption report

EC says healthcare industry among those vulnerable to corrupt business practice
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The pharmaceutical industry has been name-checked in a new report on corruption in the EU which has put the costs to the economy at a staggering €120bn a year.

The European Commission (EC) report says that healthcare - and specifically the pharmaceutical industry - ranks alongside other sectors such as construction, energy, transport and defence as being "the most vulnerable to corruption in public procurement."

Many countries in the EU are developing strategies and reforms to tackle healthcare corruption, but tangible results are scarce so far, says the Commission.

Bribery concerning the healthcare sector was a particular concern in countries such as Hungary, Slovakia and Poland, which have less developed national health systems, with evidence of structural problems providing incentives for bribery.

"Despite the promising progress towards reducing petty corruption in general, a number of member states still struggle with risk-prone conditions in the healthcare sector, where incentives to give unofficial payments against differentiated treatment persist," notes the report.

The report does not refer to any particular incidents involving pharma companies and it is expected that a sizeable chunk of the corrupt practices will be petty - inducements given by patients to jump queues for treatment for example.

Nevertheless, the report is published against a backdrop of increasing scrutiny of the industry by the Commission for practices such as delaying the entry of generic drugs into the marketplace - with Johnson & Johnson (J&J), Novartis and Lundbeck all receiving fines in recent months - as well as the reputation-denting allegations of widespread corruption in China.

In a statement, the EC said the report would serve as a handbook to help member states step up their fight against corruption.

It proposes better accountability and integrity standards, control mechanisms in public authorities, measured to tackle conflict-of-interest issues involving public officials and the effectiveness of legislative and enforcement systems, according to its author, Home Affairs Commissioner Cecilia Malmström.

Other measures include protection for whistleblowers - reminiscent of legislative changes in the US which prompted some high-profile pharma investigations brought by the US Department of Justice against the likes of Amgen, Novartis, J&J and Boehringer Ingelheim.

A Eurobarometer survey published alongside the report indicates that more than three quarters (76 per cent) of Europeans believe corruption is widespread in their country, while more than half (56 per cent) feel it is on the increase.

Article by
Phil Taylor

4th February 2014

From: Sales, Regulatory

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