www'transparency'org

1
POVERTY, POLITICAL CORRUPTION AND
HEALTHCARE David Nussbaum Managing
Director Transparency International dnussbaum_at_tran
sparency.org Global Medical Forum II Zurich,
Switzerland, 26 March 2003
www.transparency.org
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The Disease of Corruption

• Corruption the enemy of the poor and the
  vulnerable
• Interception of medicines and healthcare supplies
• needed to treat malaria, AIDS and tuberculosis
• When corruption prevents the supply of medicines,
  corruption costs lives

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Paying for Free Healthcare

• Bangalore, southern India
• Survey of the quality of maternity health
  services for the urban poor conducted in 2000 by
  the NGO Public Affairs Centre
• average patient in a maternity ward run by the
  city corporation pays 1,089 rupees (US22) in
  bribes to receive adequate medical care
• A further 61 were forced to pay for medicines -
  though they are to be given free of charge

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An Institutional Disease

• John Le Carrés novel, The Constant Gardener
• the kernel of the tale is corruption
• competing interests of short-term profit and a
  population desperately fending off the effects of
  a fatal epidemic
• TIs National Chapters live in, and report back
  from, the factual equivalent of this twilight
  world
• Corruption is an institutional disease
• spreads rapidly through the body politic
• has proven remarkably resistant to cure

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The TI Movement

• 61 accredited National Chapters
• 28 National Chapters in formation
• 35 National contact groups

Only ten years after being founded, TI is in
over 100 countries worldwide
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The TI Movement (as of December 2002)
Legend
Established National Chapters National Chapters
in Formation National Contacts
or or or
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TIs Mission
To curb corruption by mobilising a global
coalition to promote and strengthen international
and national integrity systems
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The Concept of a National Integrity System
N A T I O N A L I N T E G R I T Y
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The Concept of a National Integrity System
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TIs Approach
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Examples of TI's Activities

• The TI Source Book
• published in 20 languages using adaptation
  workshops to fit each legal, social and economic
  situation
• TI Indices CPI BPI national indices
• TIs best known products
• Business Principles for Countering Bribery
• TI working with some of the worlds largest
  companies to develop a set of practical
  recommendations
• Banking Sector Integrity
• Wolfsberg guidelines
• Repatriation of Stolen Assets
• OECD Convention

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Rotten Apples Besmirch Reputations

• A few unscrupulous companies could undermine the
  whole healthcare industry, a sector whose
  reputation is all important
• Particularly acute in the case of doctors who
  prescribe drugs to patients - who trust the
  medical expertise and judgement of doctors
• Annual spending on healthcare in the US alone
  amounts to more than US1 trillion
• In many developed countries, where the bill goes
  to the state or the insurance company, health
  care is open to fraud and abuse

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Bribe Payers Index 2002
In the business sectors with which you are most
familiar, please indicate how likely companies
from the following countries are to pay or offer
bribes to win or retain business in this country
respondents country of residence?
The question related to the propensity of
companies from leading exporting countries to pay
bribes to senior public officials in the surveyed
emerging market countries. A perfect score,
indicating zero perceived propensity to pay
bribes, is 10.0, and thus the ranking starts with
companies from countries that are seen to have a
low propensity for foreign bribe paying. In the
2002 survey, all the data indicated that
domestically owned companies in the 15 countries
surveyed have a very high propensity to pay
bribes higher than that of foreign firms.
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Bribery in business sectors by frequency
How likely is it that senior public officials in
this country respondents country of residence
would demand or accept bribes, e.g. for public
tenders, regulations, licensing in the following
business sectors?
The scores are mean averages from all the
responses on a 0 to 10 basis where 0 represents
very high perceived levels of corruption, and 10
represents zero perceived levels of corruption.
Precise comparisons between the 1999 and 2002
figures are not possible as the categories have
been modified significantly.
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Who Pays the Doctors?

• December 2002 Syncor International Corporation
  and its subsidiary Syncor Taiwan charged in the
  US with making illegal payments to doctors in
  Taiwan, Mexico, Belgium, Luxembourg and France
  through
• inflated invoicing
• payment of improper commissions for referrals
• direct gifts to doctors and state hospitals to
  secure orders for Syncor pharmaceutical supplies
• Such schemes bypassed internal accounting controls

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Bribing to Boost Prescriptions?

• February 2003 Italian prosecutors began
  investigations into GlaxoSmithKline for allegedly
  bribing doctors to prescribe the companys drugs
• The alleged bribes apparently ranged from
  holidays in the Caribbean to hi-fi systems
• In 2002 the same company faced allegations in
  Germany that doctors were offered free trips to
  World Cup football and Formula One racing

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Calling Big Business to Account

• Dr Peter S. Schönhöfer - Professor of
  pharmacology and co-editor of German drugs
  bulletin, arznei-telegramm
• some pharma companies for paying honoraria to
  doctors interns and medical department staff to
  insert non-essential drugs on lists of approved
  drugs
• some medical experts for falsifying scientific
  data in publications, and for not declaring
  financial links to pharmaceutical companies
• Schönhöfer has often had to defend his critical
  opinions in court, but has never lost a case nor
  had to retract any statements
• He won a TI Integrity Award in 2002

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Calling Big Business to Account

• Dr Peter S. Schönhöfer - Professor of
  pharmacology and co-editor of German drugs
  bulletin, arznei-telegramm
• some pharma companies for paying honoraria to
  doctors interns and medical department staff to
  insert non-essential drugs on lists of approved
  drugs
• some medical experts for falsifying scientific
  data in publications, and for not declaring
  financial links to pharmaceutical companies
• Schönhöfer has often had to defend his critical
  opinions in court, but has never lost a case nor
  had to retract any statements
• He won a TI Integrity Award in 2002

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Precise Policies and Procedures

• Suggested rules for hospitals
• a written code of conduct
• policies and procedures on procurement and
  contracting
• regular ethics training for staff
• a complaints hotline with protection for
  whistleblowers
• financial contributions by pharma companies to
  medical research units to be openly disclosed

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Medicine is for the People

• Medicine is for the people. It is not for the
  profits the profits follow. George W. Merck
• Merck has taken a lead in distributing some drugs
  cheaply to poor countries who cannot afford
  market prices
• eg. Mectizan, a cure for river blindness
• Merck was one of many companies that were slow to
  relax their patents on drugs against AIDS in
  South Africa

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Patent Rights or Patients Access?

• Pharmaceutical companies should pressure
  governments to work with them to tackle diseases
  that affect the poor
• profits can pay for research and investment in
  cures for rich-country diseases such as
  arthritis
• what incentives to tackle tropical diseases?
• the incentives are the results better standards
  of living, and patients with longer life
  expectancy
• e.g. waiving patent rights or lowering prices of
  existing drugs for developing countries.

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Engagement with Civil Society

• How to ensure medicines reach people who are ill
  and vulnerable, not the pockets of corrupt
  officials?
• Engagement with recipient governments and civil
  society - so that vulnerable patients are not
  sold worthless drugs
• Shifting the financial risk (and the rewards?) of
  product development away from shareholders and on
  to governments or foundations?
• eg. the Global Alliance for TB drug development,
  working with Novartis

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The Anti-globalisers Charge

• Anti-globalisation protesters charge that
• multinationals behave irresponsibly around the
  world
• in The Constant Gardener, exploiting poor
  patients as guinea-pigs for drug experiments
• pharmaceutical companies undermine ethical
  integrity if they make payments to doctors in
  developing countries for enrolling patients in
  trials
• companies are taking advantage of a low-paid
  doctor
• he or she is abusing the trust of vulnerable
  patients

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Private Sector can Lead the Way
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Business Principles for Countering Bribery

• Companies must establish codes of conduct
• including rules designed to combat bribery at
  home or by their subsidiaries abroad
• TI has jointly developed a set of Business
  Principles for Countering Bribery
• with companies including BP, Shell, Tata and GE
• The BPCB include training programmes with
  guidance for all employees to ensure that bribery
  direct or indirect - is outlawed
• www.transparency.org/building_coalitions/priv
  ate_sector/business_principles.html

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Working Together to Fight Corruption

• TI and the private sector can work together to
  pressure governments throughout the world to
• tackle the systemic problems that leave hospitals
  underfunded and patients not cared for
• ensure that medicines are not diverted by corrupt
  elites, and that aid money reaches the intended
  destination
• create a level playing field for business, where
  any culture of corporate bribery becomes a thing
  of the past
• to the benefit of us all

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POVERTY, POLITICAL CORRUPTION AND
HEALTHCARE David Nussbaum Managing
Director Transparency International dnussbaum_at_tran
sparency.org Global Medical Forum II Zurich,
Switzerland, 26 March 2003
www.transparency.org