Compliance controls against corruption
Corrupt activities in low- and middle-income markets risk progress toward meeting the 2030 Sustainable Development Goals and Universal Health Coverage target.
Astellas, AstraZeneca, GSK, Johnson & Johnson, Novartis, Novo Nordisk, Sanofi, Takeda
Reducing the risk of corrupt acts by enforcing a set of control mechanisms
To ensure compliance with laws, regulations and company standards on ethical marketing and anti-corruption
Corruption and fraud threaten to undermine global health and access to medicine. In global health, some USD 7.35 trillion was spent worldwide on health service provision in 2013, with a loss of 6.19% (USD 455 billion) attributable to fraud, corruption or errors.* Today’s true scope and cost of global health corruption are unknown, but these figures suggest significant impacts on access to medicine among vulnerable people. In addition, research from the World Health Organization (WHO) indicates that corrupt activities in the health sector (such as diverting resources from healthcare systems) risk damaging progress toward meeting the 2030 Sustainable Development Goals and Universal Health Coverage targets.**
Gaps in transparency and accountability within pharmaceutical companies can increase risks of undue influence and other abuses occurring. This may be exacerbated in low- and middle-income countries which may be more likely to have weaker regulatory or judicial controls and health systems than higher income countries.***
Corruption and unethical marketing activities can directly affect people’s access to medicine by promoting inappropriate use of drugs, misdirecting national health budgets and limiting drug availability in the public sector.
Compliance controls to reduce risks
The Access to Medicine Index looks for companies to implement compliance controls to mitigate risks in low- and middle-income countries operations and avoid undermining governance efforts on improving access to medicine. Eight companies demonstrate best practice in this area and in their overall approach to corruption: Astellas, AstraZeneca, GSK, Johnson & Johnson, Novartis, Novo Nordisk, Sanofi and Takeda.
Controls address the risk of non-compliance with laws and standards of conduct; fraud-specific and country-specific risk assessments; live monitoring to ensure continuous compliance; conduct of audits (internal, external and including third parties) in countries where the company operates; and formal processes (such as training or contractual agreements) to ensure third-party compliance with company standards. All eight companies have comprehensive processes to manage corruption-related risks, comply with laws and regulations in countries in scope and report reliably on financials.
Use of external tools
The companies that demonstrate best practice vary in how they mitigate the risks of corrupt activity. Some report using external tools, with three relying on findings from the Transparency International (TI) Corruption Perceptions Index. This independent tool uses insights from experts and business executives to score and rank countries based on the levels of corruption perceived in public sectors. Johnson & Johnson, for example, uses the Transparency International Corruption Perceptions Index to review corruption levels as part of its annual assessments to evaluate fraud risks in its operations. Novo Nordisk’s risk assessments are also informed by multiple data sources including the TI Index. For Sanofi, the TI Index helps to inform auditing: TI Index findings enable the company to set and assess country risk profiles and thus determine the frequency of audits.
Compliance across the board
By implementing every component of compliance control, these eight companies recognise the extent to which corruption poses a threat to public health and access to medicine. Together, they demonstrate how pharmaceutical companies can seek to limit misconduct by enforcing stringent compliance processes across operations (i.e., in the areas of ethical marketing, anti-corruption and clinical trials), and among third parties.
All companies in scope have auditing mechanisms. By strengthening compliance controls further, more companies can focus on mitigating the risk of non-compliant or corrupt activities occurring in the low- and middle-income countries in which they operate.