One of the reasons why the sector is vulnerable to corruption is that it is heavily regulated. Heavily regulation is essential to safeguard the population against sub-standard drugs and unfairly priced goods. But there is a second central reason why governments regulate the pharmaceutical market: to ensure that industrial policies strengthen economic competitiveness of the pharmaceutical sector and improve innovation and efficiency. These two objectives can sometimes lie at cross-purposes. If regulators are subject to pressure from commercial groups, health objectives can be compromised. Generous political campaign donations and lobbying expenditures by pharmaceutical companies are examples of such pressures.

The relationship between drugs companies and physicians is also vulnerable to corruption. Doctors may be offered commissions for prescribing a particular drug or a drug from a particular company. Because this practice is illegal in most countries, companies may employ underhand methods to disguise such kickbacks. The aggressive promotion of medicines, the sheer volume of information that is received in its many forms by prescribers and the use of patient groups through which to generate demand for prescription drugs, all contribute to the inappropriate prescription of medicines. In the United States some US$ 16 billion is spent annually by pharmaceutical, device and biotechnology industries on marketing to physicians.

The issue of unethical pharmaceutical marketing practice has received a great deal of attention in recent years, prompting many doctors associations, pharmaceutical industry associations and individual corporations to engage with the issue. Many have passed codes of conduct and ethical guidelines for the marketing of pharmaceuticals; but if not monitored and enforced, their impact will be limited.

Another form of corruption threatening the pharmaceutical industry occurs during clinical trials. Doctors are often paid by pharmaceutical companies to recruit patients for clinical trials or sit on clinical trial boards while simultaneously on the pay role of the manufacturing company in question. Many research institutions and universities have institutional review boards or research ethics committees responsible for reporting procedures and policies regarding conflicts of interest. Problems arise as to who will monitor the conflicts of interest and what, if any, sanction doctors will receive for failing to disclose conflicts of interest. On a national level, oversight becomes even more problematic. Moreover, there is debate over whether disclosure is sufficient: should researchers be allowed to conduct research for companies in which they have a financial interest?

Paul Komesaroff and Ian Kerridge, ‘Ethical issues concerning the relationships between medical practitioners and the pharmaceutical industry’
Komesaroff and Kerridge review a number of the issues concerning the relationships between medical practitioners and the pharmaceutical industry, emphasising that arrangements between physicians and pharmaceutical companies ought to be open and transparent. They identify the main causes for concern and examine ways in which different aspects of the medical profession are left vulnerable to corruption. Conflicts of interest involving drug promotion, sponsership, the financing of travel and medical research medical are discussed.
MJA, Vol 176, February 2002

Jillian Clare Cohen, ‘Pharmaceuticals and corruption: a risk assessment’
Cohen’s essay focuses primarily on the role of government, particularly through intervention, is vital to the pharmaceutical sector. She points to two core reasons why governments regulate the pharmaceutical market: to ensure that health policy such as quality assurance and fair pricing of drugs contributes to the health of the nation and to ensure that industrial policies strengthen economic competitiveness. Cohen begins by illustrating the potential for corruption in each of the key decision points in the pharmaceutical system, namely, registration, selection, procurement, distribution and service delivery. She moves on to examine in more detail the problem of counterfeit drugs and the various ways governments can intervene to combat these problems.
Global Corruption Report 2006, Ch5, p77

Jerome Kassirer, ‘The Corrupting Influence of Money in Medicine’
This essay examines various marketing initiatives employed by pharmaceutical companies in order to influence medical students and professionals. It examines four case studies from the United States in the context of conflicts of interest. The author also comments on the impact pharmaceutical corruption has on public trust in the health sector and questions why standards in this field appear to be lower than in other professions.
Global Corruption Report 2006, Ch5, p85

Harvey Bale, ‘Promoting Trust and Transparency in Pharmaceutical Companies: an Industry Perspective’
Bale describes the high degree of government regulation in every stage of pharmaceutical procurement and distribution, from the approval of clinical trials to the setting of drugs prices. Within this framework, he assesses the vast potential for corruption that nevertheless exists and the respective forms this corruption can take. These problems are illustrated with the example of GlaxoSmithKline and the sale of antiretroviral drugs at not-for-profit prices to some of the worlds poorest countries and their subsequent diversion back into western markets. Bale concludes by asserting the need for measures that will improve pharmaceutical transparency.
Global Corruption Report 2006, Ch5, p91

John Williams, ‘Fighting Corruption: The Role of the Medical Profession’
Williams describes various activities designed to prevent or deal with conflicts of interest between physicians and the pharmaceutical industry and makes recommendations with the view to improving physician behaviour.
Global Corruption Report 2006, Ch5, p94

USA:
US Pharmaceutical company involved in charity fraud‘
US Pharmaceutical Company Fined for Payments to Charity headed by Polish Health Officials’, Global Corruption Report 2006, Box 5.1, p78

Nigeria:
The Fight against Counterfeit Drugs in Nigeria
Dora Akunyili, Global Corruption Report 2006, p96

Thailand:
Corruption in the Ministry of Public Health, Thailand
Stuart Cameron, Global Corruption Report 2006, Box 5.2, p100

India:
Malpractice in the Office of the Drug Controller in Karnataka, India
Stuart Cameron, Global Corruption Report 2006, Box 5.3, p101

Ethical principles for conducting clinical trials: Guidelines for Good Clinical Practice of the International Conference on Harmonization
Good Clinical Practice (GCP) is an international ethical and scientific quality standard for designing, conducting, recording and reporting trials that involve the participation of human subjects. Compliance with this standard provides public assurance that the rights, safety and well-being of trial subjects are protected, consistent with the principles that have their origin in the Declaration of Helsinki,and that the clinical trial data are credible.
The objective of this ICH GCP Guideline is to provide a unified standard for the European Union (EU), Japan and the United States to facilitate the mutual acceptance of clinical data by the regulatory authorities in these jurisdictions. This guideline should be followed when generating clinical trial data that are intended to be submitted to regulatory authorities. The principles established in this guideline may also be applied to other clinical investigations that may have an impact on the safety and well-being of human subjects.

Operational Principles for Good Pharmaceutical Procurement:Essential Drugs and Medicine Policy
This document introduces four strategic objectives and twelve operational principles for good pharmaceutical procurement. The aim of this document is to improve pharmaceutical procurement practices in countries served by the IPC members. These operational principles for good pharmaceutical procurement are not meant to regulate activities of international agencies, sovereign governments or private companies. They are presented strictly as a set of principles which can be reviewed and adapted by individual governments and public or private organizations in the process of developing their own internal procurement procedures.
World Health Organisation, 1999

Practical Guidelines on Pharmaceutical Procurement for Countries with Small Procurement Agencies
This booklet is especially intended for countries with small procurement agencies. It is intended to provide practical guidelines for the procurement process. Pre-qualification of suppliers receives special attention as a means of ensuring the purchase of products of good quality. An effective procurement process will make an important contribution to the establishment of a reliable and good quality health service.
World Health Organisation Regional Office for the Western Pacific Manila, Philippines, 2002

Ethical Criteria for Medicinal Drug Promotion
Geneva, WHO, 1998

WHO Essential Medicines List
The concept of essential medicines is forward-looking. It incorporates the need to regularly update medicines selections to reflect new therapeutic options and changing therapeutic needs; the need to ensure drug quality; and the need for continued development of better medicines, medicines for emerging diseases, and medicines to meet changing resistance. Essential medicines are intended to be available within the context of functioning health systems at all times in adequate amounts, in the appropriate dosage forms, with assured quality, and at a price the individual and the community can afford. The Model List is a guide for the development of national and institutional essential medicine lists.

Transparency International’s Business Principles for Countering Bribery
The Business Principles aim to provide a practical tool to which companies can look for a comprehensive reference to good practice to counter bribery. TI hopes that the Business Principles will become an essential tool for businesses and we encourage companies to consider using them as a starting point for developing their own anti-bribery systems or as a benchmark.

UK House of Commons Health Committee, ‘The Influence of the Pharmaceutical Industry: Fourth Report of Session 2004–5’
The report of an inquiry into drugs licensing in the UK, which revealed major failing in the regulatory system. The report found that the organisation, process and techniques of the regulatory are focussed on bringing drugs to market fast, with insufficient regard paid to value or therapeutic need. The committee expressed concerns about the licensing process, including the evaluation of clinical trials; the control of marketing; staffing levels; the withdrawal of drugs; and licensing related to generics. It found that process by which drugs are licensed is far from transparent.

Declaration of Helsinki
Ethical Principles for Medical Research Involving Human Subjects, drafted and adopted by the World Medical Association in 1964 (and amended regularly thereafter). The Declaration covers fundamental principles of clinical research, such as the need for research to be carried out by scientifically qualified individuals and for the importance of the objective to be in proportion to the risk to the participant.

Pushing Prescriptions, a project of the Center for Public Integrity
The results of a year long investigation into the marketing and lobbying practices of the pharmaceutical industry, with details disaggregated by company (top 20 companies listed).