Stronger Code of Practice for Global Pharma Industry

by Blog Burger on March 1, 2012

By Sten Stovall

David Brennan, CEO of AstraZeneca and president of the IFPMA, pictured last year.

The world drugs industry is tightening its code of practice in an attempt to clamp down on corruption and bribery, particularly in emerging markets.

The Geneva-based International Federation of Pharmaceutical Manufacturers and Associations said today it has strengthened its code to ensure “that governments, health-care providers and patients are confident that interactions with our members are conducted to the highest ethical and professional standards is our commitment.”

Corruption and bribery are rife in many emerging markets that Big Pharma is targeting for growth to offset declining profits in developed markets.

Top drug makers have meanwhile been stung in recent years by investigations in the U.S. by officials enforcing the country’s foreign corruption law, which makes it illegal for U.S. companies and foreign companies listed there to bribe government officials oversees.

The IFPMA’s president is David Brennan, an American who is also chief executive of AstraZeneca. The U.K.-based drug maker made headlines last year when it broke with industry practice by ending all payments to doctors attending international scientific and medical congresses.

“I’ve been president now for over a year of IFPMA and I’ve tried to encourage the other companies to get signed up and to do this, and I’m pleased to say that they have, Brennan said.

He said the global pharmaceuticals industry needs to be seen to be raising its standards. Only then will it win back society’s trust, which Brennan says “is broken”.

The new IFPMA code extends the rules covering drug company behavior to also include drug makers’ interactions with medical institutions and patient organizations, as well as health-care professionals, such as doctors who prescribe medicines.

It also clarifies the dividing line between promotional aid and medical products,  which are allowed, and personal and cash gifts, which are not.

Members have signed on for this expanded code so they have decided to accept it, and they’ve now got to work within their own companies on what it takes to implement it, and it will cause people to change some of the things they do,” Brennan said.

“Others might say, ‘Hey, you’re taking away our opportunities to compete’. But we don’t see it that way. We see it as an opportunity to find new ways to compete. We can tell our organization that we’ll use these changes to strengthen the way we operate,” he added.

The industry needs to be proactive, Brennan believes.

“The perception of the pharmaceuticals industry has generally been influenced by different factors in different markets. You can look at a couple of very high profile types of decisions that the industry got involved in which society wasn’t necessarily comfortable with, and that just caused the pendulum to start to swing the other way.”

He noted that the reputation of the pharma sector varies greatly from country to country.

“In Sweden, AstraZeneca is one of the most highly-rated companies there, but in the United States the pharmaceuticals industry is rated down at the bottom of the pack because people see pricing, they see direct-to-consumer advertising, and they say ‘It doesn’t seem right that these guys should charge that much money for their drugs and be able to do direct to consumer advertising as well.’”

“People will often say to me in the U.S, ‘Why don’t you stop your direct-to-consumer advertising and lower your prices?’ So there’s an element of price, there’s an element of publicity associated with DTC advertising, there’s an element of transparency that enters into it — transparency around clinical trials, transparency  around marketing and sales practices  — those are examples of things that influence the perception. We need to be upfront more on these issues.”

Revamping the code was the easy part. Making sure the IFPMA members and associates adhere to the more stringent rules is the hard part and will take close scrutiny and “teeth” –  perhaps in the form of “naming and shaming” to ensure the move doesn’t become just an empty gesture.

This post originally appeared on the WSJ’s The Source blog.

Photo: Bloomberg News

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