Big pharma and the government are failing to tackle corruption despite recent scandals, report claims

 
Billy Bambrough
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In 2014 GlaxoSmithKline was slapped with a $500m fine for bribery in China (Source: Getty)

Corruption, price hikes, and tax dodging – welcome to the world of big pharma.

The global pharmaceutical sector is being ravaged by corruption abuse according to new research from Transparency International.

The report found both governments and companies are not doing enough to address corruption risks, which is sapping $300m (£207m) of annual global health expenditure.

The industry is also mired in price hiking scandals in which executives from some of the biggest firms have been hauled before politicians to answer questions over business practices.

The pricing pressure backlash can work for some in the industry, however.

Read more: "Most hated" pharma exec Martin Shkreli arrested

Some of the merger and acquisition activity in the sector has also been stepped on recently due to concerns over potential tax avoidance – though it hasn't been enough to slow the pharma M&A freight train.

Since the beginning of this year big pharma has made up one in 10 of US corruption investigations, outpacing even the infamously dodgy world of banking.

Transparency International has warned that firms are being entrusted with a large degree of autonomy, without proper governmental oversight.

Profits, the report claims, are being prioritised at the expense of patients’ health.

Read more: Last year the former the Valeant CEO said he felt good about 2016

Sophie Peresson, Transparency International pharmaceuticals director said:

The effects of corruption in the pharmaceutical sector and health sector are stark, where it can literally be a matter of life and death.

Where one individual gains from creaming off the top, hundreds more can be deprived from the most basic healthcare, often in the poorest populations of the world.

It is shocking that despite scandal after scandal involving pharma companies still policy makers simply are not taking seriously the corrosive effect of corruption. The red flags are being ignored.

Global spend on medicines is expected to grow to $1.3 trillion by 2018, allowing it to spend a huge amount on promotional activities and political lobbying.

According to the report the pharmaceutical industry spends an estimated $42bn each year on promotional activities that target doctors in the US, equivalent to $61,000 per doctor on average.

Of course, some people think the sector isn't doing enough to trumpet its virtues...

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