towards an integrity standard in the pharmaceutical industry iacc conference, may 27, 2003 seoul,...
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Towards an Integrity Standard in the Pharmaceutical Industry
IACC Conference, May 27, 2003
Seoul, Korea
Dr. Jillian Clare Cohen
Assistant Professor, Leslie Dan Faculty of Pharmacy
University of Toronto
Dr. Jilllian Clare Cohen, IACC, Seoul, May 27, 2003
Why Pharmaceuticals Matter
• Drugs save lives and improve quality of lives• Drugs promote confidence in health systems• Essential drugs have a major impact on causes of
morbidity and mortality• Household surveys around the globe have shown
that drug availability is a major reason why patients will go to a health care facility and how well a patient judges the quality of care
• Drug availability can also help health care workers be more productive
Dr. Jilllian Clare Cohen, IACC, Seoul, May 27, 2003
The Pharmaceutical System(Source: Managing Drug Supply1997)
Selection
Procurement
Distribution
Use
Management SupportOrganisation
FinancingInformation Management
Human Resources
Policy Space Policy Space
Dr. Jilllian Clare Cohen, IACC, Seoul, May 27, 2003
Characteristics of an Ideal Market
• Freedom of Choice
• Information symmetry
• Ability and willingness to pay for measured verifiable characteristics
• Yardsticks against which to measure performance
• No barriers to entry
Dr. Jilllian Clare Cohen, IACC, Seoul, May 27, 2003
Imperfections of the Pharmaceutical Market
• Choice?
• Principal/agent problem
• Moral hazard problem
• Information asymmetries (provider/patient, manufacturer/provider, manufacturer/government)
• Presence of therapeutic monopolies
Dr. Jilllian Clare Cohen, IACC, Seoul, May 27, 2003
The Imperfections of Pharmaceutical Consumption
• Consumer does not always choose drug
• He/she cannot judge its efficacy, appropriateness, value for money
• Perceptions matter
• Consumer does not always know what the consequences could be of NOT consuming a drug
Dr. Jilllian Clare Cohen, IACC, Seoul, May 27, 2003
Why Support an Integrity Standard?
• Compelling moral reasons given the unique health properties of pharmaceuticals and that one-third of the world’s population lack access to basic medicines
• Pharmaceuticals in health systems must be secure and match real health needs
• Institutions, policies and practices are not usually robust in many developing countries
• Standards must be set at the right level and not at the “acceptable” level
Dr. Jilllian Clare Cohen, IACC, Seoul, May 27, 2003
Some Core Issues
• There is a laundry list of potential issues to address
• Important to acknowledge some of the potential points of vulnerability in the pharmaceutical system
• Goal is not to incriminate but to deal honestly with the issues and act collectively to strengthen the integrity of the system
Dr. Jilllian Clare Cohen, IACC, Seoul, May 27, 2003
Physician-Industry Interaction• Can be viewed both positively and negatively• If interaction results in biased prescription
patterns, not a socially desirable good• If interaction produces better patient health, then it
is a socially desirable good• But standards should be set and adhered to so it is
only permissible that interaction is justifiable and results in outcomes that have objectively positive social outcomes
Dr. Jilllian Clare Cohen, IACC, Seoul, May 27, 2003
Ethical Guidelines Do Exist
• Physician Codes, Guidelines and Policies• American Medical Association, Canadian
Psychiatric Association, New Zealand Medical Association Code of Ethics
• IFPMA Code of Pharmaceutical Marketing Practices, European Code for the Practice of the Promotion of Medicines
• Company-specific codes • Is self-regulation enough?
Dr. Jilllian Clare Cohen, IACC, Seoul, May 27, 2003
Research and Its Funding
• The pharmaceutical industry is a major doer of research and sponsor of research
• Imperative that there is integrity in all aspects of the research process and its funding
• Ethical review of human subjects involved in research (e.g. clinical trials of drugs) in developing countries vital
• Studies must be subject to the highest standards of integrity, transparency, objectivity, and accountability
• Free marketplace of ideas
Dr. Jilllian Clare Cohen, IACC, Seoul, May 27, 2003
Government-Industry Interaction
• Governments major purchasers of pharmaceuticals• They also regulate the pharmaceutical market• Democratic decision-making involves consultation
with different stakeholders• Interaction between government and industry must
be fully transparent and not subject to undue influence
• Government and industry must be accountable and do the right thing not the acceptable thing
Dr. Jilllian Clare Cohen, IACC, Seoul, May 27, 2003
Pricing Policies
• Pharmaceuticals have high sunk costs and low marginal costs of production
• Firms want to rationally maximize their profits• But, do prices permit fair profit or excess profit?• The prices set for new pharmaceutical products
may reduce access among groups who might benefit therapeutically
• What standards should be set for industry and how can industry better help governments meet their social responsibilities?
Dr. Jilllian Clare Cohen, IACC, Seoul, May 27, 2003
Transparency of Decision Making
• Disclose decision making rationale and processes publicly• Ensure transparency and accountability• These criteria must be evenly applied throughout the
pharmaceutical system • Public and private sector must be held to the highest
standards of integrity• Challenge is to create an integrity standard for the
pharmaceutical system (government, health professionals, industry – local and international manufacturers, wholesalers and distributors, pharmacists)
Dr. Jilllian Clare Cohen, IACC, Seoul, May 27, 2003
Moving Forward• Pharmaceutical industry and professional
standards exist but not one global standard for all stakeholders in the pharmaceutical system
• Reach consensus on the requisite standards among a working group of stakeholders
• Widely disseminate standards• Determine appropriate means to implement
standards• Build in a system of monitoring• Establish an impartial review process• Gather evidence (e.g. case studies) for evaluation