1. Towards an Integrity Standard in the Pharmaceutical Industry IACC Conference, May 27, 2003 Seoul, Korea Dr. Jillian Clare Cohen Assistant Professor, Leslie Dan Faculty of Pharmacy University of Toronto jillianclare.cohen@utoronto. ca

2. Dr. Jilllian Clare Cohen, IACC, Seoul, May 27, 2003 Why Pharmaceuticals Matter Drugs save lives and improve quality of lives Drugs promote confidence in health systems Essential drugs have a major impact on causes of morbidity and mortality Household surveys around the globe have shown that drug availability is a major reason why patients will go to a health care facility and how well a patient judges the quality of care Drug availability can also help health care workers be more productive

3. Dr. Jilllian Clare Cohen, IACC, Seoul, May 27, 2003 The Pharmaceutical System ( Source: Managing Drug Supply1997) Selection Procurement Distribution Use Management Support Organisation Financing Information Management Human Resources Policy Space

4. Dr. Jilllian Clare Cohen, IACC, Seoul, May 27, 2003 Characteristics of an Ideal Market Freedom of Choice Information symmetry Ability and willingness to pay for measured verifiable characteristics Yardsticks against which to measure performance No barriers to entry

5. Dr. Jilllian Clare Cohen, IACC, Seoul, May 27, 2003 Imperfections of the Pharmaceutical Market Choice? Principal/agent problem Moral hazard problem Information asymmetries (provider/patient, manufacturer/provider, manufacturer/government) Presence of therapeutic monopolies

6. Dr. Jilllian Clare Cohen, IACC, Seoul, May 27, 2003 The Imperfections of Pharmaceutical Consumption Consumer does not always choose drug He/she cannot judge its efficacy, appropriateness, value for money Perceptions matter Consumer does not always know what the consequences could be of NOT consuming a drug

7. Dr. Jilllian Clare Cohen, IACC, Seoul, May 27, 2003 Why Support an Integrity Standard? Compelling moral reasons given the unique health properties of pharmaceuticals and that one-third of the world’s population lack access to basic medicines Pharmaceuticals in health systems must be secure and match real health needs Institutions, policies and practices are not usually robust in many developing countries Standards must be set at the right level and not at the “acceptable” level

8. Dr. Jilllian Clare Cohen, IACC, Seoul, May 27, 2003 Some Core Issues There is a laundry list of potential issues to address Important to acknowledge some of the potential points of vulnerability in the pharmaceutical system Goal is not to incriminate but to deal honestly with the issues and act collectively to strengthen the integrity of the system

9. Dr. Jilllian Clare Cohen, IACC, Seoul, May 27, 2003 Physician-Industry Interaction Can be viewed both positively and negatively If interaction results in biased prescription patterns, not a socially desirable good If interaction produces better patient health, then it is a socially desirable good But standards should be set and adhered to so it is only permissible that interaction is justifiable and results in outcomes that have objectively positive social outcomes

10. Dr. Jilllian Clare Cohen, IACC, Seoul, May 27, 2003 Ethical Guidelines Do Exist Physician Codes, Guidelines and Policies American Medical Association, Canadian Psychiatric Association, New Zealand Medical Association Code of Ethics IFPMA Code of Pharmaceutical Marketing Practices, European Code for the Practice of the Promotion of Medicines Company-specific codes Is self-regulation enough?

11. Dr. Jilllian Clare Cohen, IACC, Seoul, May 27, 2003 Research and Its Funding The pharmaceutical industry is a major doer of research and sponsor of research Imperative that there is integrity in all aspects of the research process and its funding Ethical review of human subjects involved in research (e.g. clinical trials of drugs) in developing countries vital Studies must be subject to the highest standards of integrity, transparency, objectivity, and accountability Free marketplace of ideas

12. Dr. Jilllian Clare Cohen, IACC, Seoul, May 27, 2003 Government-Industry Interaction Governments major purchasers of pharmaceuticals They also regulate the pharmaceutical market Democratic decision-making involves consultation with different stakeholders Interaction between government and industry must be fully transparent and not subject to undue influence Government and industry must be accountable and do the right thing not the acceptable thing

13. Dr. Jilllian Clare Cohen, IACC, Seoul, May 27, 2003 Pricing Policies Pharmaceuticals have high sunk costs and low marginal costs of production Firms want to rationally maximize their profits But, do prices permit fair profit or excess profit? The prices set for new pharmaceutical products may reduce access among groups who might benefit therapeutically What standards should be set for industry and how can industry better help governments meet their social responsibilities?

14. Dr. Jilllian Clare Cohen, IACC, Seoul, May 27, 2003 Transparency of Decision Making Disclose decision making rationale and processes publicly Ensure transparency and accountability These criteria must be evenly applied throughout the pharmaceutical system Public and private sector must be held to the highest standards of integrity Challenge is to create an integrity standard for the pharmaceutical system (government, health professionals, industry – local and international manufacturers, wholesalers and distributors, pharmacists)

15. Dr. Jilllian Clare Cohen, IACC, Seoul, May 27, 2003 Moving Forward Pharmaceutical industry and professional standards exist but not one global standard for all stakeholders in the pharmaceutical system Reach consensus on the requisite standards among a working group of stakeholders Widely disseminate standards Determine appropriate means to implement standards Build in a system of monitoring Establish an impartial review process Gather evidence (e.g. case studies) for evaluation