GSK in China: time to crack down on Big Pharma?

GlaxoSmithKline's fine for charges of bribery surrounding its Chinese operations have dominated pharma headlines this week. And as EPM reported on Wednesday, there are further investigations of bad practice from the healthcare giant elsewhere in the world. On the same day, Aparna Krishnan, GlobalData’s analyst covering Healthcare Industry Dynamics, speculated that this latest case could prove to be the trigger for a reformation in the way Big Pharma trades: “For the industry at large, this verdict signifies a potential backlash, most certainly in China, as is already visible with increasing scrutiny over drug prices. For firms that have a sizeable presence in emerging markets, including Novartis, AstraZeneca, Roche, Sanofi, Merck and Eli Lilly, this verdict will force the reassessment of certain strategies in these countries.

“In recent years, issues related to pricing and patents were deemed to be having a negative impact on top-line growth from these markets. The bribery scandal will add a new dimension to the highly scrutinised relationship between the pharma industry and medical community, with measures similar to the US Physician Payments Sunshine Act likely to be implemented in emerging markets, if indeed payments are allowed to continue at all.”

The aforementioned investigations into smaller allegations of corruption are taking place in Poland, Syria, Iraq, Jordan and Lebanon - if they prove to be founded in truth, these emerging markets too are likely to adopt strict measures to regulate pharmaceutical trading. If evidence of corruption in the industry as a whole arises in the west (particularly in Europe) Big Pharma is likely to come under serious scrutiny on a global scale.

The Sunshine Act in the US aims to create transparency in this field - in particular for the general public. Physicians who receive $100 or more from either pharma manufacturers or medical device suppliers have the transaction posted online, in an attempt to deter acts of corruption on both sides.

However, many believe the act to be flawed, and untenable in real usage. The chief concern in the US which lead to its introduction was with regards to patient safety. Cynics of the act have suggested that patients are still at risk today, because even without the apparent presence of bribery, the marketing and promo efforts behind Big Pharma effectively create a financial edge over smaller suppliers - and still have a major influence over physicians.

So just how micro does any potential new regulation need to be? Should it be extended to include the monitoring of marketing efforts to check for inaccuracies in product representation? It could be argued that product marketing needs to be accurate anyway in the online age (it's easier than ever to find second, third, fourth and fifth opinions for any virtually any mass-produced product on the internet). There is also the argument that full access to the marketing mix (which does not include bribing doctors) is part of a healthy trading environment.

Whatever the chosen measures, the key to creating transparency for patients and practitioners is accessibility of information. The Sunshine Act came under fire for primarily being useful only to state authorities in the US. To make this kind of drugs data readily accessible at every level of the supply chain around the world would involve considerable administrative efforts from all parties. But it seems unavoidable if the big players are to retain credibility going forward.