GSK cops $3 bn fine for largest health care fraud in US; 17th Edition of Medicines Australia Code released

Not surprisingly, these two news items led to a discussion on Australian television (and elsewhere) of whether the promotional activities of the pharmaceutical industry should be governed by self-regulatory industry codes of conduct or by co-regulation involving the government and other stakeholders.

The latest edition of Medicines Australia (MA) Code contains a number of incremental improvements, for example requiring member companies to report in aggregate amounts:

  •  All payments made to healthcare professionals for advisory boards and consultancy arrangements.
  • All sponsorships of healthcare professionals to attend medical conferences and educational events.
  • All payments made to speakers at educational events.
  • All sponsorships of all individual consumer organizations for each financial year, including the value of non-monetary support.

More information is available here

However, the above changes fall far short of the full disclosure of individual payments made to healthcare professionals which many consumer and health professional groups have argued for both in the 16th Edition (2009) Code revision and again in the 17th Edition (2012) Code revision. Over this time, a number of Australian pharmaceutical companies had also become comfortable with full individual disclosure of payments to healthcare professionals along the lines of the U.S. Physicians Sunshine Act;  however this was not incorporated in the latest MA code.

This illustrates one of the problems of self-regulation, codes often lag behind consumer and health professional views due to the absence of these stakeholders from code revision committees. Codes also lag behind the views of progressive pharmaceutical companies because of the need for revisions to be approved by a majority of member companies.

In addition, in Australia a plethora of therapeutic industry associations results in a variety of self-regulatory codes with code content, monitoring, complaint procedures and transparency varying greatly (“not a level playing field”).

Another problem of self-regulation is relatively weak sanctions. MA’s maximum fine of  $300,000 (with an average fine of $50,000) stands in stark contrast to the recent GSK fine of $3 billion by the U.S. Justice Department.  The U.S. False Claims Act also encourages whistle-blowers to provide crucial “insider” evidence about corporate fraud as they are rewarded with between 15% and 30% of whatever proceeds the government recovers from a successful  civil suit. There are no such incentives in Australia.

A further problem with self-regulatory codes is that they don’t apply to non-members; a major problem in certain areas of the Australian therapeutic goods industry. For example, earlier this year Ranbaxy Australia offered pharmacists A$14,648 of free Trovas (generic atorvastatin) stock; an offer that  would appear to breach the codes of both the Generic Medicines Industry Association (GMiA) and Medicines Australia. However, as Ranbaxy Australia Pty Ltd was not a member of any self-regulatory industry association no complaint could be heard!

The latest MA Code has now passed to the Australian Competition and Consumer Commission (ACCC)  for authorization. This will provide another opportunity for health professional and consumer input. In the past, the ACCC has imposed “conditions” when authorizing MA’s Code which have strengthened its provisions; it is hoped the same may occur with respect to individual disclosure of payments to healthcare professionals.

The ACCC request for input can be found here.

For more debate about the Code, see:


linkedinrsslinkedinrssby feather

About Dr Ken Harvey

Public Health Physician, Medical activitist
This entry was posted in Pharmaceutical Promotion and tagged , , , , , , , . Bookmark the permalink.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.