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Federal and Provincial Government Involvement in Pharmaceutical Policy

Question:

Write an Essay on Challenges of Canadian Pharmaceutical Policy.

Canadian pharmaceutical policy involves both provincial and federal levels of Government. The federal Government is involved in the manufacturer’s intellectual property rights, initial approval, prescription drugs labeling and looking after the competitive nature of the overall market. The provincial government on the other hand has jurisdiction and responsibility of the healthcare facilities funding, including the pharmaceuticals (Daw & Morgan, 2012). The federal government regulates the prices of drugs, but does not buy the drugs. The provincial government has no power over market pricing and competitiveness (Ridic, Gleason & Ridic, 2012).

However, one issue that is associated with pharmaceutical policies is the non-disclosure of payments to doctors by the drug or pharmaceutical companies (Stamatakis, Weiler & Ioannidis, 2013). A lack of transparency was observed, when the pharmaceutical companies made payment disclosures. It is necessary for the federal government to take immediate responsibility of the issue and ask the companies to provide a list of the doctors who received payments from the drug companies and what were the amounts paid.  This policy research essay will provide information about Canadian pharmaceutical policies and provide analysis of the above mentioned issue.

This essay at first determine the history of the policy challenge, provide an overview of the current policies and provides recommendations from the research carried out.

Pharmaceutical or drug companies develop relationships with physicians, doctors and other healthcare workers in order to generate business through them by utilization of a variety of processes (Bending, 2015). These include giving gifts, personal services, entertainment and even payments. These activities have a significant potential for generation of abuse and fraud (Mackey & Liang, 2012). Moreover, the companies do not disclose these payments made to the doctors. Patients also remain in the dark about the illegal payments of pharmaceutical companies to doctors. This results in prescribing drugs by the doctors that are highly expensive and sometimes are not associated with proper approvals by the FDA (Choi, 2015). This affects the patients monetarily as well as unapproved drugs may cause harm to the patients in the long run. Moreover, a non-disclosure of such payments is considered unethical and also prevents the involvements of patients in clinical trials.


There are a number of evidences that can be unearthed from the past regarding physician payments that are not disclosed by pharmaceutical companies. Both companies as well as medical practitioners believe that development of relationship between the medical professionals and pharmaceutical companies will help in the development of academic research. These academic research can later be translated into drug development (Board, 2012). However, various malpractices are carried out, where the drug companies pay the medical professionals like doctors but do not disclose these payments to the government and the public in general. A certain level of transparency is to be maintained so that the public also come to know about the dealings between these organizations. Previously, such events have taken place and are described here. In 1976, in Canada, there were reports of high costs related to pharmaceutical industry. Moreover, there were reports of pharmaceutical companies spending large amounts of money not only on research but also on promotional activities, which included undisclosed payments to physicians. Various Canadian pharmaceutical companies who had provided payments to doctors included AbbVie Corp, GSK Canada, Merck Canada, Novartis Pharmaceutical Canada, Eli Lilly Canada, among others (A Almeman, 2017).

Non-Disclosure of Payments to Doctors by Pharmaceutical Companies

 Various psychiatrists like Charles Nemeroff and Alan Scatzberg were charged for taking undisclosed payments from various pharmaceutical companies. In April, 2011, Johnson and Johnson were charged of bribing doctors in Poland, Greece and Romania to buy the drugs manufactured by them. They spent 7.6 million dollars on providing travel grants for doctors. The company earned 3.5 million dollars profit from product sales through bribery (Www.sec.gov, 2017). Other incidents that occurred in the past include Eli Lilly, who was charged in 2012 of paying government officials in order to increase sales in China, Poland, Brazil and Russia. Others include Pfizer, charged for carrying out illegal payments in various Asian and European countries. In 2014, Endo Pharmaceuticals were charged for mis-promotion of Lidoderm, which is a local anesthetic. GlaxoSmithKline was also charged for selling drugs not approved by the FDA (Www.ipsen.com, 2017)

Past approaches that were carried out to rectify the challenge faced in the health sectors included restriction of interactions between doctors and representatives of the pharmaceutical companies. Moreover, payments if made would have to be disclosed to the Government and reported. The aim of the approach was to prevent the pharmaceutical industry to modulate the prescribing behaviors of the doctors. In the 1960s, there were various debates regarding the appropriateness in the relationships of the pharmaceutical companies and doctors. In 1991, American Medical Association (AMA) issued various rules and guidelines regarding undisclosed payments and gifts that are given to clinicians, physicians and doctors by the pharmaceutical companies (Breault, Shenson & Dugdale, 2015). From that time onwards, attention was paid to pharmaceutical marketing methods as a result of the rise of marketing strategies and increased drug prices. According to the AMA, gifts valued below 100 dollars are allowed if they provide patient benefit and associated with a doctor’s practice. Moreover, meals can be funded to doctors by  pharmaceutical companies if it is modest and is carried out in association with an educational or academic component (DuBois et al., 2012).  The guidelines effective from 2009, also prevent non-educational or practice associated gifts like pens to be given to clinicians, physicians and doctors. However, the guidelines permitted the pharmaceutical companies to provide meals, educational gifts and drug samples which are less than 100 dollars to the doctors. The Association of American Medical Colleges (AAMC) endorsed policies that describe the public disclosure of relationships between pharmaceutical companies and doctors (Reddi, 2013). However, the limitations associated with these policies are that the AMA ethics guidelines are not followed by majority of the doctors. Moreover, according to the guidelines, the physicians can receive gifts that are worth less than 100 dollars. However, small value gifts can also influence the behavior practice of the physicians. Thus, the Government has to play an essential role in reducing such promotional marketing strategies used by the pharmaceutical companies.

Past Approaches to Rectify the Challenge


Improvements of payment transparency between clinicians and pharmaceutical companies have been a focus for the Government. The approaches used can be defined as “disclosure of physician payments and gifts”, “ban on physician gifts”, “Limiting the sale of prescribing data for marketing purpose”, “licensing of pharmaceutical sales representatives” and “public funding of academic detailing programs”(Patwardhan, 2016). Various state lawmakers have proposed numerous laws, which can be applied for reducing the effects of gifts or payments made by pharmaceutical organizations in the physician’s practices. Thus, Government regulations provide a legal enforcement credibility that forces the pharmaceutical companies to comply with the Government regulations. However, there are limitations like the regulated organizations can find loopholes in the law and can flout them by challenging the validity of such enforcements.

Current approaches that were carried out to rectify the challenge includes the involvement of the Securities and Exchange Commission, where the pharmaceutical companies involved in bribing doctors were asked to give detailed accounts of the payments made to the respective doctors. This information was asked to be provided in the company website. This will enable the public to view the dealings made between the pharmaceutical companies and the healthcare members like doctors, general practitioners, among others. In 2012, the Australian Competition and Consumer Commission (ACCC) demanded Medicines Australia to include payment disclosures involving doctors and pharmaceutical companies (Www.accc.gov.au, 2017). The respective transparency principle was applicable to all the therapeutic companies. Moreover, it also included the health professionals like clinicians, doctors, among others. Other approaches involve those made by the United States, like the US Physician Payment Sunshine Act, which requires various pharmaceutical companies to provide details of all the payments to the Centre for Medicare and Medical Services (CMS) (Www.ama-assn.org, 2017). Moreover, apart from payments, other transfers of high value like gifts or travel grants were also included. All the data collected were eventually be reported to the public to maintain transparency in the dealings of the pharmaceutical world. In Ontario Canada, the Government is planning to enforce rules and regulations that would force the pharmaceutical companies to disclose the payments made by them to the doctors. Other approaches of the current world include fines and criminal penalties, inclusion of tax policies, among others (Www.cbc.ca, 2017). Such a proposed legislation will enable the public including the patients to get proper information that would empower them to make better decisions regarding healthcare. It also enables patients to either accept or reject a prescribed drug and also change doctors if needed. Moreover, a central online database will enable any person to view the dealings between medical organizations and pharmaceutical companies.

Current Approaches to Rectify the Challenge

Some regulatory strategies towards undisclosed payments involve command and control, self regulation, market enhancing and incentives control, disclosures and liabilities and rights laws. These help to either determine the offenders or impose penalties one caught. Command and control implies to criminal sanctions and states that such unofficial payments by pharmaceutical organizations to doctors and other healthcare facilities, are not acceptable and severe penalties are liable to be enforced if discovered. The relevance of the strategy towards healthcare sector involves standards of behaviour and other codes of conduct, which is to be followed to avoid criminal penalties. However, the limitation of this strategy is that the penalties function only when the incentives are sufficient and the enforcing of such strategy depends on the independence of the regulator. The next strategy is self-regulation, which involves regulations by professional medical associations. The relevance of this strategy is that the medical association itself designs some standards or codes of conduct which is to be followed by all members of that medical association. However, the limitations involve that the incentive should be high enough to implement possible penalties (Www.researchgate.net, 2017).


Another strategy is the market enhancing and incentives controls, which provide appreciation and inducements when regulations and general codes of conducts are followed. are followed. This helps to legalize private practice by doctors. Legalization of private practice is one way of increasing competition in the health sectors as it provides a wide range of options for the patients to choose from. Moreover, it also opens up new income sources for the practitioners. This practice in turn will increase the benefits of the doctors and thereby prevent acceptance of unofficial payments. This strategy, however, has limited scope because the attention of the doctors will be shifted from the benefits of the public health sector to private practices for their own benefits. However, such a strategy can be applied to those health facilities, where the competitions are very weak (Mahmoud & Mahmoud, 2016).

The most important strategy is disclosure, which involves identifying the offenders involved in carrying out undisclosed payments. This puts pressure on the offenders as it affects the reputations of both the pharmaceutical companies and the doctors. Policy makers if disclose the names of the hospitals that are the best and worst with respect to following a code of conduct, those who are the worst will feel the pressure to improve their standards. It will also help to generate list of healthcare facilities like hospitals taking undisclosed payments. The importance of this approach is that public surveys can help to determine the amount of money paid and to whom and the necessary reasons for the payment. However, there are limitations of this strategy, which includes the acceptance of the public that payments are not beneficial. The public may think that good payments may increase their access to better doctors, or chance of getting good health facilities, which in turn can give rise to unofficial payments to doctors by patients themselves (Loewenstein, Sah & Cain, 2012).

Regulatory Strategies towards Undisclosed Payments

Lastly, the right and liabilities law provides a standard code of law protected consumer or patient rights. This may in turn help to limit the requirements of unofficial payments. Thus, customer rights can be maintained by imposing civil action or criminal prosecution against those who do not follow the legal system. However, limitations of such a strategy involves that such a strategy places the responsibility of the regulation on an individual and not the organization in general. Moreover, in order to avoid getting criminally prosecuted, private settlements of unofficial payments will be more attractive (Jahangiri & Aryankhesal, 2017).

There are various means to obtain data regarding the pharmaceutical policy issues. The data was gathered by traditional means, which included interviews with patients, healthcare facility members like general practitioners, doctors, clinicians and also the pharmaceutical company representatives. Moreover, other means include government websites, which provide information about the amount of money paid by pharmaceutical organizations to healthcare workers like doctors. The pharmaceutical company websites also give information about how much money they have paid to the doctors. Moreover, by searching a doctor’s name, the websites provide information about the nature of the payments. The websites break down the payments into consulting fees, travel and stay expenses, research fees, foods, beverages and grants. Moreover, data can be obtained from government reports, news articles, literature reviews, and journal articles.


Proper analysis of the data obtained from various resources revealed that a close relationship exists between doctors and pharmaceutical industries. These relationships are mainly based on finances. However, such payments are usually not official and are not disclosed. However, in the recent times, disclosures of these payments are carried out. These financial collaborations encompass research funding to personal investments, direct physician payments like travel grants, gifts, meals, among others. The organizations should remain transparent in order to provide the information about such dealings to the general public. Moreover, such malpractices reduce the credibility of both the medical organizations as well as that of the pharmaceutical companies. Various strategies have been implied by the Government, however, the companies find out various loop holes in the policies and guidelines thereby protecting themselves from criminal prosecutions. In the current age, drug companies who are found to be involved in such activities were charged. Moreover, recent reforms force the drug companies to disclose the payments in their annual reports or the websites.

Such undisclosed payments are a type of marketing strategy that the companies adapt in order to make the physicians favor the prescription of the drugs made by the company. However, this may cause the patients to buy certain drugs, which are very expensive even though other cheaper and effective options are available in the market (Kalotra, 2014). Moreover, some companies try to promote the drugs, which have not been clinically approved by organizations like the FDA. These may have serious implications as use of such drugs may lead to serious health consequences concerning the health of patients. Such mal practices when discovered not only tarnishes the reputations of the companies and the medical organization but also the doctors in general. It also decreases the faith of the public including the patients in the healthcare system. The patients pay a huge amount of money, in not only doctor consultations and treatments but also to buy medicines, which are prescribed by doctors. It is necessary for bringing about new policies by the Governments as well as the medical organizations that define a series of code of conducts to be followed by the companies and the hospitals. A breach of such conduct should entitle to criminal prosecutions and legal actions. The Ontario Government has taken such a drastic step, where they have said that a bill will be generated that will require public disclosure of unofficial payments made to healthcare employees like doctors by the pharmaceutical companies. Thus, it can be concluded that curbing of financial dealings between companies and healthcare sectors are essential in order to prevent wastage of large amounts of money in promotional strategies. Such reforms may also help to decrease the costs of drugs in the future, which are at an ever-rising stage.

References

A Almeman, A. (2017). Direct-To-Physician Advertising and Antibiotic Utilization in Upper Respiratory Tract Infection: A Critical Analysis. Retrieved 2 November 2017, from https://www.omicsonline.org/direct-to-physician-advertising-and-antibiotic-utilization-in-upper-respiratory-tract-infection-a-critical-analysis-2153-2435.php?aid=16347&view=mobile

Bending, Z. J. (2015). Reconceptualising the doctor–patient relationship: Recognising the role of trust in contemporary health care. Journal of bioethical inquiry, 12(2), 189-202.

Board, E. S. C. (2012). Relations between professional medical associations and healthcare industry, concerning scientific communication and continuing medical education: a policy statement from the European Society of Cardiology. Revista Portuguesa de Cardiologia (English Edition), 31(7), 529-538.

Breault, J. L., Shenson, D., & Dugdale, L. S. (2015). Ethics of physician relationships with industry. Hospital Medicine Clinics, 4(4), 565-580.

Choi, R. (2015). Increasing Transparency of Clinical Trial Data in the United States and the European Union. Wash. U. Global Stud. L. Rev., 14, 521.

Daw, J. R., & Morgan, S. G. (2012). Stitching the gaps in the Canadian public drug coverage patchwork? A review of provincial pharmacare policy changes from 2000 to 2010. Health Policy, 104(1), 19-26.

DuBois, J. M., Anderson, E. E., Carroll, K., Gibb, T., Kraus, E., Rubbelke, T., & Vasher, M. (2012). Environmental factors contributing to wrongdoing in medicine: A criterion-based review of studies and cases. Ethics & behavior, 22(3), 163-188.

Jahangiri, R., & Aryankhesal, A. (2017). Factors Influencing on Informal Payments in Healthcare Systems: A Systematic Review. Medical Ethics Journal, 11(40), 73-92.

Kalotra, A. (2014). MARKETING STRATEGIES OF DIFFERENT PHARMACEUTICAL COMPANIES. Journal of Drug Delivery and Therapeutics, 4(2), 64-71.

Loewenstein, G., Sah, S., & Cain, D. M. (2012). The unintended consequences of conflict of interest disclosure. Jama, 307(7), 669-670.

Mackey, T. K., & Liang, B. A. (2012). Transparency in Physician-Industry Relationships: State and Federal Efforts. AJSP: Reviews & Reports, 17(4), 144-147.

Mahmoud, M. A., & Mahmoud, M. A. (2016). Consumer trust and physician prescription of branded medicines: an exploratory study. International Journal of Pharmaceutical and Healthcare Marketing, 10(3), 285-301.

Patwardhan, A. R. (2016). Physicians-Pharmaceutical Sales Representatives Interactions and Conflict of Interest: Challenges and Solutions. INQUIRY: The Journal of Health Care Organization, Provision, and Financing, 53, 0046958016667597.

Reddi, A. (2013). New guidelines for the disclosure of academic-industry financial ties and modeling professionalism during medical education. JAMA pediatrics, 167(12), 1091-1092.

Ridic, G., Gleason, S., & Ridic, O. (2012). Comparisons of health care systems in the United States, Germany and Canada. Materia socio-medica, 24(2), 112.

Stamatakis, E., Weiler, R., & Ioannidis, J. (2013). Undue industry influences that distort healthcare research, strategy, expenditure and practice: a review. European journal of clinical investigation, 43(5), 469-475.

Www.accc.gov.au. (2017). ACCC proposes to strengthen new individual reporting in pharmaceutical code. Australian Competition and Consumer Commission. Retrieved 2 November 2017, from https://www.accc.gov.au/media-release/accc-proposes-to-strengthen-new-individual-reporting-in-pharmaceutical-code

Www.ama-assn.org. (2017). Physician Financial Transparency Reports | Sunshine Act | AMA. Ama-assn.org. Retrieved 2 November 2017, from https://www.ama-assn.org/practice-management/physician-financial-transparency-reports-sunshine-act

Www.cbc.ca. (2017). Ontario bill would require disclosure of pharmaceutical payments to health professionals. CBC News. Retrieved 2 November 2017, from https://www.cbc.ca/news/canada/toronto/ontario-bill-would-require-disclosure-of-pharmaceutical-payments-to-health-professionals-1.4308278

Www.ipsen.com. (2017). Cite a Website - Cite This For Me. Ipsen.com. Retrieved 2 November 2017, from https://www.ipsen.com/wp-content/uploads/2016/04/IPSEN_DDR_2015_VA.pdf

Www.researchgate.net. (2017). Retrieved 2 November 2017, from https://www.researchgate.net/publication/286517835

Www.sec.gov. (2017). SEC Charges Johnson & Johnson With Foreign Bribery. Sec.gov. Retrieved 2 November 2017, from https://www.sec.gov/news/press/2011/2011-87.htm

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