The phrase “Big Pharma” was not coined as a compliment.
That notwithstanding, the pharmaceutical industry has not been slow to appreciate the potential pitfalls to its members of the Bribery Act.
Nobody will be too bothered about notepads and pens on their GP’s desk advertising Glaxo/Zeneca snake oil. (They don’t call them “memo pads” for nothing,) but the industry soon woke up to the potential consequences of offering lavish junkets to the big time drugs buyers, – hospital administrators and the like. You didn’t exactly need to sample the latest version of a well known analgesic by flying all the way to Bermuda for a week, unless you got a very bad hangover.
Last August, The Independent reported that AstraZeneca and GSK were being investigated by the DoJ and the SEC in America for allegations of excessive hospitality.
Since then AZ have announced (FT 26th June) that they have stopped paying the travel expenses of doctors to attend international medical conferences in an effort to clamp down on an industry practice long viewed by critics as aggressive marketing.
They faced twin risks:
- Prosecution for the Section 1 offence of Bribery, by offering excessive hospitality on what was alleged to have been a grand scale. The implication being that those responsible for buying their drugs might effect an improper performance of their relevant function, i.e. choosing the right drugs, by buying from the most lavish entertainer.
- Prosecution for the Section 7 offence of failing to prevent Bribery, if they did not ensure that they had adequate procedures in place to prevent salesman on the ground from exerting financial or other influence on prospective customers.
“The Association of the British Pharmaceutical Industry (ABPI), the UK Prescription Medicines Code of Practice Authority (PMCPA), and the UK Serious Fraud Office (SFO) have reached a memorandum of understanding (MoU) relating to aspects of the application of the UK Bribery Act 2010 (Act) to the pharmaceutical industry.
The MoU is intended to promote efficient complaint procedures and co-operation between the SFO and the PMCPA, which administers the ABPI Code of Practice (Code), in areas regulated by both the Act and the Code to avoid duplication of investigations. The M oU, therefore, offers important clarifications on the SFO’s enforcement actions in areas also covered by the Code, in particular Clause 18 of the Code (on items for patients, promotional aids, the provision of medical and educational goods and services, agreements to benefit patients such as joint working, outcome agreements and patient access schemes) and Clause 19 (on meetings, hospitality and sponsorship of healthcare professionals).
While the SFO will retain its discretion over which cases it chooses to pursue and when, it will generally adopt the following approach:
The SFO will not routinely intervene in matters covered by the Code, but reserves the right to take action if the issue is deemed serious enough to merit SFO investigation. However, it will submit complaints to the PMCPA when appropriate;
The SFO will not seek to prosecute unless it considers this is in the public interest and in reaching such a decision the SFO will take into account relevant action taken by the PMCPA and the UK Medicines and Healthcare Products Regulatory Agency;
The SFO agrees that sensible proportionate promotional expenditure is entirely legitimate and not outlawed by the Act;
Companies need to have in place robustly defined and implemented anti-bribery procedures with clear ownership from the top of the organisation.
Accordingly, the SFO clarifies that it supports the self-regulatory approach that is enshrined in the Code, as administered by the PMCPA, and acknowledges that the Code can help companies conform with the requirements of the Act, particularly in the areas covered by Clauses 18 and 19. That position requires that the PMCPA continues to deal with complaints received from whatever source relating to matters covered by the Code in a timely and fair manner.
To that end, the MoU foresees that SFO, PMCPA and ABPI will co-operate and promote a common understanding on issues arising. In addition, the SFO will monitor current cases dealt with by the PMCPA.”
Back to me again….
So what we have is an example of Industry Regulators co-operating with the SFO, to achieve some level of understanding of each other’s positions. It’s not a silver bullet, but it is a start along a road that Richard Alderman, Director of the SFO, has been regularly espousing in speeches that he has given in the last couple of months to various industry sector bodies.
I shall be keeping my eyes peeled for more.
If anyone knows of any, drop me a Tweet @JamesPSvine or leave a comment below…. or even both.
Construction industry might be next.