The new standards — the Business Principles for Promoting Integrity in the Pharmaceutical Sector (“Pharma Integrity Principles“) — are a first step in an ambitious multi-stakeholder initiative to establish a uniform baseline for integrity practices across the region.
The Pharma Integrity Principles are here.
They are the product of an extensive consultation process, combining anti-bribery principles of general applicability developed by Transparency International with sector-specific guidelines for preventing conflicts of interest from the Mexico City Principles (APEC) and other voluntary industry codes of business ethics.
Pharmaceutical companies across Latin America face many of the same challenges as counterparts in other business sectors, in relation to government licensing, inspection and procurement activities. But they also have a special responsibility and challenge to ensure the integrity of patient and healthcare provider decisions about the use of prescription medicines.
The Pharma Integrity Principles, which build on substantial efforts over the past decade by key actors in the region, commit signatory companies to two fundamental actions: a leadership commitment to ethical business practices and to an effective “Program” of internal controls and procedures for implementing this policy. Operationally, this will mean either implementing anti-bribery and conflict of interest practices based on the Pharma Integrity Principles or, for companies with established programs, using them to benchmark existing practice.
The initiative has several notable features.
First and foremost is its regional scope. The Pharma Integrity Principles are designed to provide a framework for good business practice and integrity risk management that can be applied across Latin America and by companies of all sizes, whether doing business on a national, regional or multinational scale. Notably, this is a first regional — and also sectoral — application of longstanding TI Business Principles.
Second, like the TI Business Principles from which they derive, the Pharma Integrity Principles emphasize the central importance of a meaningful “program” to ensure substantive policy commitments are met — with an entire section devoted to the nuts and bolts of program design. In a region with only limited past experience with formal compliance programs, the practical guidance from these standards will be especially important.
Third, the initiative has a formal signatory process, requiring a public written commitment from participating companies at the highest levels. This innovation reflects the crucial role ahead for leaders in changing culture and tackling long-entrenched practices, particularly in organizations relatively new to formal compliance programs. While companies are a primary focus, other stakeholders (medical societies, patient advocacy organizations, payer agencies) also have an important role to play and this has been reflected in similar written leadership commitments.
Last but not least is the example provided by this initiative of the potential for voluntary private sector “collective action” to address common challenges, including a leveling of the economic playing field for ethical companies. Readers will be familiar with the concept of collective action from past FCPA Blog posts.
Publication of the Pharma Integrity Principles is a first step, designed to provide companies with practical guidance and a reference point for developing their own policies and procedures for promoting integrity, thereby strengthening industry-wide practice and contributing to the goals of good governance and global health. Future efforts will focus on securing commitment and sustainable adherence to the Principles across the region, developing practical tools and resources to support meaningful implementation, and to working with public and private sector institutions to take complementary steps, including through appropriate oversight mechanisms and an exploration of positive incentives that can encourage investments in quality compliance.
Michael Fine, Principal of NXG Global Law & Compliance PLLC (US), is lead consultant to the LatAm Pharma Integrity Initiative. He previously provided legal support for the WEF PACI Principles and helped to launch the World Bank Institute’s “Fighting Corruption through Collective Action” initiative. He can be contacted here.
Alma Balcazar of GRC Compliance (Colombia) is the Initiative’s regional consultant and has facilitated numerous past collective action initiatives for business associations in the Latin America region, and also been a technical advisor to the Government of Colombia on private sector anti-corruption initiatives. She can be contacted here.