Drug Reps & Dates With Doctors
They are an invaluable resource to doctors and drug companies alike
, but the activities of Britains medical-rep sales force may soon be looming large on the Serious Fraud Offices legal radar. A string of startling revelations imply that the NHS and the pharmaceutical industry could be placed in severe financial and legal peril by the latest legislative crackdown on bribery.Industry watchdog the PMCPA (Prescription Medicines Code of Practice Authority) recently found leading international drug companies were spending millions on hospitality, in order to forge close links with doctors, nurses and staff who hold the purse-strings to the NHSs 12 billion drug budget. And the figures could be just the tip of the iceberg, as Britains pharmaceutical companies do not presently disclose the scale of their expenses spending.
The British pharmaceutical industry employs 83,000 people nationwide and generated 29.3 billion of exports in 2009 alone. But the latest Bribery Act 2011 has the legal eagles hovering, with the pharmaceutical giants and Health Trusts firmly in their sights, and the power to impose limitless fines and 10-year jail terms.
The Act outlaws the provision of any financial or other incentives to perform an act improperly and bans doctors from requesting, agreeing to receive, or even accepting any inducements. Critically, it holds company Directors responsible for any bribes by employees or associates, even if they were unaware of them. And, in an alarming twist for leading foreign NHS suppliers including Pfizer, Roche and Novartis, the Act also applies to any foreign companies deemed to have a business connection to Britain.
The lack of transparency in Britains healthcare and pharmaceutical sector was starkly illustrated by the fact that, even though health Trusts are legally obliged to keep lists of any possible conflicts of interest, only a quarter responded to a recent Freedom Of Information request by the Guardian newspaper. British pharmaceutical companies still do not disclose their sales and sponsorship spending.
However, recent US company figures show that one pharma-giant spent 2.24 billion of its UK budget on marketing, sales and admin costs in 2010 alone, and the latest PMCPA revelations offer a glimpse into where all the money is going.
When Is A Dinner Just A Dinner
In revelations that will raise alarm bells in many corporate boardrooms, it has emerged that the activities of sales-teams representing some of the worlds major medicine giants, including Pfizer, Napp and Cephalon, figure prominently in the PMCPAs report into bribery allegations.
Cephalon were found to have provided inappropriate hospitality to 13 health professionals at a medical congress, while Pfizer were accused of hosting parties and providing overnight stays at luxury hotels, and Napp was accused of taking 17 delegates on business-class flights to Canada. Hospital trusts are in equal danger; NHS Wiltshire recently investigated allegations that two of its staff may have taken inducements. The revelations raise particular concern among industry heavyweights because the Bribery Act blurs the distinction between corporate hospitality and bribery.
When voluntary industry body the ABCP recently found Abbott Laboratories guilty of splashing out thousands of pounds on alcohol-fuelled trips for doctors to Wimbledon, race-courses and even strip-clubs, the company claimed it was unaware of these activities and blamed a narrow silo of its employees. However, under the latest Bribery Act, this would be no defence: the Act holds companies collectively responsible for the actions of any individual employees or even loosely-defined company associates.
The Solution:
The lack of corporate control over drug-reps and the lack of transparency surrounding the process of drug-purchasing has the potential to cause massive reputational and financial damage to the NHS and their supplier companies.
Lack of transparency and control around company expenses is not confined to the pharmaceutical industry: a recent Deloitte survey found that half of British companies admit to having no limit on expenses, 20% had no policy mandating that they must be checked and, consequently, up to a third are being regularly defrauded. Abbott Laboratories admitted the hospitality activities for which it was penalised were never even checked by Head Office because the expenses claims did not exceed 4,000.
But the Bribery Act offers a major opportunity for companies: they are not deemed liable for acts of bribery if they can prove they had adequate systems in place to enforce the law on expenses.
Many companies are now ending their reliance on overworked Finance Departments to combat fraud by painstakingly logging and checking individual paper-based claims, and instead turning to automated expenses-management solutions.
The latest software models enable expenses claims to be both entered and checked remotely from any location, providing an instant portal into the activities of all company sales-reps because the information is stored in the cloud. WebExpenses even enables employees to enter claims and evidence using their smart-phones, which means companies can enforce tough expenses-rules by requiring employees to enter claims on the move as soon as costs are incurred.
Crucially, the software notifies employees of unlawful claims at the point of entry and instantly notifies the Finance Department whenever a claim breaches company policy.
These systems act as bullet-proofing against false allegations, because the full, up-to-the-minute audit-trail is safely held in a central online repository and can be made instantly-available to regulators.
The pharmaceutical industry may find it needs to turn to novel solutions to avert prosecution and bring the activities of a global sales-force back under the umbrella of a transparent Finance Department.
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