World Bank report scolds pharmaceutical industry
By : Jeffrey Sparshott
A lack of transparency in Poland's pharmaceuticals sector opens the door for corruption among companies, government officials, doctors and pharmacists, and ultimately affects costs and quality of treatment in the country, according to an unpublished World Bank (http://www.worldbank.org) report presented to the government.
Problems abound with the drug registration process, the drug pricing process, reimbursements from the government, manipulation of prescriptions and sales, and price controls, according to a copy of the report obtained by the WBJ.
Originally given to the Health Ministry and the prime minister's office in February, the report has been circulated among Polish ministries and officials though the government has not officially responded. Typically a national government would offer a response to a World Bank report and then the report would be made public.
On July 27, the Sejm (http://www.sejm.gov.pl) adopted a package of laws designed to bring Poland's pharmaceutical laws in line with the European Union's (EU) and to introduce clearer industry legislation. If the Senate (http://www.senat.gov.pl) accepts the laws without adding amendments it would move to the president's office. The Senate's health committee chairman said that a final vote is expected during the summer's final session, Aug. 29-31.
The World Bank report does not mention any firms or individuals by name but cites numerous areas for corruption within the pharmaceutical industry.
"The report shows that the principles of operation within the system can be very unclear - in many cases there is no legislation or it is badly constructed," the bank said in the report. "In effect there appear many possibilities and incentives to resort to corruption practices, with a relatively low risk of disclosure."
"The absence of transparency in the pharmaceutical system translates directly into costs and quality of treatment," the report adds.
From start to finish - drug registration by companies to purchase by consumers - the pharmaceutical system is vulnerable to corruption, the bank said.
Initially, the process whereby pharmaceutical firms register new products is vague, with binding procedures unknown or at least unclear, too much room left for discretionary interpretations and no reason given for rejecting or accepting an application, the bank said.
"Some drugs are registered very quickly, while for others the process of making decisions is very long," the bank said. "The time of registering a drug by a given manufacturer is very important. The later a generic drug is registered the greater the chance of gaining control of the market by a brand-name product. And the other way around - the faster a brand-name drug is registered the greater the chance for gaining control of the market."
The next crucial step for a drug is the pricing process. The Finance Ministry sets the price of all Polish drugs, taking into account manufacturing costs, competitiveness with other products, price ratios and dosages, and cost-effectiveness.
Foreign drugs follow a different process. The pharmaceutical firm and the government (http://www.kprm.gov.pl) negotiate to determine whether a given product will be reimbursed and what the price for that product will be.
"This process is not a transparent one, as it is not easy to pinpoint clear and accurate criteria for the creation of lists," the bank said. "It should be remembered that drug manufacturers focus their efforts on making the drug manufactured by them a refunded drug, as including the drug on the reimbursement list is the main way to increase sales and gains for the company making this drug.
"The process of creating reimbursement lists without clear and transparent criteria encourages corruption - various kinds of attempts to include a specific drug on the list of refunded drugs.
"In order to increase sales, pharmaceutical companies use various ways to convince decision-makers that their product should be prescribed, sold, registered, reimbursed, etc. Most of these methods are open or hidden ways of corruption," the bank said. The companies' targets include physicians; pharmacists; officials at the Health Ministry, the Commission for Registration, the Institute of Drugs and Patients Funds; and MPs.
With doctors, transgressions include apparently innocent techniques such as offering low-value free gifts, as well as more serious breaches such as paid medical visits used as drug pitches, free invitations to lavish seminars, company-sponsored scholarships for physicians' children, and offers of free medical equipment in return for a pledge to prescribe a certain medication, the bank said. "Some representatives of pharmaceutical companies and Patients Funds concede that there are also cases of informal agreements between pharmaceutical companies and doctors where the doctor is paid a fixed percentage on sold medicine," the bank said.
In other cases, pharmacies supply refunded drugs to physicians and the physician sells those drugs from his office, the bank said. On the surface this procedure appears to be more convenient for the patient but it limits the patient's choices, is unethical and - because prescription drugs can only be sold in pharmacies - is illegal, the bank said.
With pharmaceutical companies and pharmacies, informal agreements are sometimes concluded that allow the company to find out which doctors are making out which prescriptions, thereby obtaining information on effectiveness of sales pitches and evidence of which doctors are upholding corrupt agreements, the bank said.
In other areas, the pharmaceutical system breaks down because local authorities, such as Patients Funds, lack proper tools to monitor prescriptions and reimbursements, the bank said. These funds also create their own lists of reimbursable drugs, stating that they cannot afford to reimburse all drugs on the national list, the bank said. In return, pharmaceutical companies once again have to push to have their products included on the local lists, opening the process to corruption, the bank said.
The report notes that the current system's advantages include giving access to medicine for most people who need it and serving the basic purpose of doing no harm. Nevertheless, this system lacks transparency and costs and expenses are rising dramatically, the bank said.
The Health Ministry's press office declined to comment on the report,
saying that the appropriate contacts were on holiday. The prime minister's office referred questions to the Finance Ministry; officials there also said that the appropriate contacts were on vacation.
The World Bank's Warsaw office said that the report has not been released to the public and did not know when it would be.
