Health care corruption: measures taken by the Austrian pharmaceutical industry association

1. Health care corruption: measures taken by the Austrian pharmaceutical industry association Jan Oliver Huber Secretary General, Pharmig

2. Situation today • Corruption and fraud within the health care system are not problems that concern only developing countries • Countries of different living standards differ both in the forms and in the public perception of corruption and fraud • Law awareness for the need of a new health care culture and not only cost driven health care policy • Recent studies conducted by the Fachhochschule (University of Applied Sciences) of Krems, Lower Austria, show that an estimated 3 – 10% of the yearly expenditures of the health care systems is “lost” due to corruption and fraud. • For Austria this would mean an estimated value up to 2.1 bn euros.

3. Factors that advantage fraud in health care systems Intransparency caused by: • Complex structure of the health care system (federal, regional, municipal budgets + compulsory health insurance funds + patient contribution ~ 20 %) • many different players involved (hospital operators, MD, PI, sick funds, politics, pharmacist, wholesale, patient groups,…) • Very limited transparency and not clear enough political responsibilities • Huge number of compulsory sick funds (today: 20!) for 8.1 m people creating expensive structures and no awareness for change of federal responsibility • the payer(s) is/are not the consumer(s) of the health care services, consequently the system lacks control

4. Prevention of Fraud - Increase of Transparency 1. Legal measures - Medicinal Products Act (MPA) • § 82a impartiality of public servants • no financial or other interests within pharmaceutical industry • Annual proof of impartiality • § 55 Business to business advertising • no financial or material advantage • unless it is of minor value • Representation expenses - Criminal Code, §§ 304-307 • corruption of public servants • Acceptance of gifts • Acceptance of gifts by executive employees of a public-sector undertaking • Corruption: offer, acceptance or promise of an advantage

5. Prevention of Fraud - Increase of Transparency 1. Legal measures (2) • Unfair Competition Act, § 10 • corruption: offer, acceptance or promise of gifts or other advantages to employees and appointees • to achieve advantage in competition - General Social Insurance Act • ASVG • VO EKO

6. Prevention of Fraud - Increase of Transparency 2. Voluntary measures, eg: • IFPMA clinical trial database • Initial launch in September 2005 (www.ifpma.org/clinicaltrials) • Comprehensive information on clinical trials • Information on ongoing and completed trials • Target groups: patients and doctors • Fight against counterfeit of medicines • Public health threat • Lack of information and awareness within the public • Appropriate and effective methods of collaboration between WHO and Industry: > set up of high-level working groups > international conference with authorities in February 2006

7. Prevention of Fraud - Increase of Transparency 2. Voluntary measures (2), eg: Codes of Conduct • Pharmaceutical Industry • IFPMA • EFPIA (early 60ies) • Pharmig Code of Conduct (1970) • Physicians (national level) • Code of Conduct for physicians and dentists regulating interaction with pharmaceutical industry and medical device industry in Austria (September 2005)

8. Pharmig Code of Conduct (COC) • Voluntary Code of Conduct of the Pharmaceutical Industry since early 60ies • Pharmig COC: • Safety of pharma products • To the Benefit of patients • Fair competition • Binding for all Pharmig member companies (95 % of the pharmaceutical market) • Creation of a culture in the pharmaceutical branch and ethics in medicinal products supply

9. Pharmig Code of Conduct (COC) • Rules for • scientific cooperation with physicians • for providing information and advertising to specialist circles (b-2-b) • for public advertising • 15/10/2004: extraordinary General Assembly • without provocation of a member company • Pharmig sets a new standard of business culture in Austria • Stricter regulations and new mechanism of sanctions

10. COC – 1. General Principles • The code applies to • all information • advertising • marketing activities for pharmaceutical products • including magazine advertising, mailings, activities of pharmaceutical company representatives • the use of audio-visual systems, telecommunications or the internet, films, videos • Medical samples • Aids, Hospitality • Whether provided by the company itself or on its behalf • Advertising only for authorised products permitted • All information about m.p. must be verifiable

11. COC – 2. Information for Specialist Circles • 2.5 Medical samples According to § 58 MPA • records must be kept of each medical sample delivered • only free of charge • in the smallest package available in commerce • irremovable notice attached “unverkäufliches Ärztemuster” (medical sample, not for sale) • Delivery only to physicians • Only upon their written request • Limited to a certain volume

12. 2.5 Medical Samples

13. COC – 2. Information for Specialist Circles • 2.7 Scientific Congresses, Symposia, Workshops “Main purpose of all these events must be the study of new discoveries and/or specialist‘s further education. The conference venue and most of the time at the event must correspond with this purpose and as a matter of principle they should be located in Austria. Invitations to other countries may be accepted only to international events or tours of scientific or production facilities of the company. The expenses for travel, stay and invitations of any kind may only be paid for members of the medical professions. Accompanying persons are not welcome. Should such persons nevertheless come along, neither the organisation nor expenses for travel, accommodation, food, drink or leisure activities may be paid for by the host.”

14. COC – 2. Information for Specialist Circles • 2.8. Hospitality “Hospitality may be extended to reasonable, not lavish, degree to practising members of the medical professions for the purpose of exchange of information.” • 2.9 Gifts “Employees of the Pharmig member companies may not request or accept any gift in kind or of money in connection with business contacts for their companies. Employees of the Pharmig member companies may not offer any gift in kind or of money to influence business partners or officials.”

15. Pharmig – 4. Cooperation with Physicians • Cooperation with Physicians • Recognition of principles of the medical profession and the principles of the association of the pharmaceutical industry (Pharmig, IGEPHA), 4.1 • company responsible when it instructs others (e.g. advertising agencies, event marketing companies, market research companies), 4.2 • service rendered by a physician (e.g. lectures, consulting, clinical trials, post-marketing studies) must be based on a written contract, 4.3 • Contractual performance of a physician must be a scientific or medicine-related activity (no “sham contracts”), 4.4

16. Pharmig – 4. Cooperation with Physicians • Cooperation with Physicians • No remuneration for the physician’s agreement to receive a pharmaceutical company representative, 4.5 • Payment for documentation within the frame of observational studies, 4.6 • payment appropriate at the locally customary level • in accordance with the actual services performed • Fee catalogue or other payment schedules for medical services

17. Complaints: Procedure - Sanctions Complaints: • in written to the secretary general of Pharmig • by a member of the management of the complainant

18. Complaints: Procedure - Sanctions Procedure: • Within two working days: • complaint received is forwarded, without giving the name of the complainant, to the company concerned • Within five working days: • the company concerned state its position • The statement is forwarded to the complainant • Within five working days: • notification by the complainant if the statement is accepted or not • If the statement is not accepted: • further treatment by the Committee of Experts

19. Complaints: Procedure - Sanctions Sanctions: if a violation of the COC is established by the Committee of Experts: • Disclose the violation, including the name of the company concerned, in a Pharmig publication • Inform the parent company on the firm concerned • Inform the general secretariat of the EFPIA

20. Complaints: Procedure - Sanctions Sanctions (2): • Fines for serious violation: • between Euro 20.000 and 100.000 • shall be used for charities within 3 months as of receipt of payment • Expulsion from Pharmig: • Expulsion does not release from the financial obligation; neither does it release the company from the duty to pay a fine imposed • A combination of the possibilities mentioned above

21. Complaints: Procedure - Sanctions Arbitration Procedure: • Within four weeks: Concerned company may bring an action for annulment of the resolution before the arbitration tribunal of Pharmig • The arbitral award is final, enforceable and may dissent form the decision of the Committee of Experts

22. Complaints: Procedure - Sanctions Enforcement of the fine: • In default of payment of an imposed fine Pharmig has the right to initiate before the arbitration tribunal an action for enforcement of the fine imposed by the resolution. • The costs of such arbitration proceedings shall under any circumstances be reimbursed to Pharmig. • The arbitration proceedings shall be conducted in German. The place of arbitration is Vienna.

23. Thank you for your attention!