CORRUPTION IN THE CORRUPTION IN THE HEALTH SECTORHEALTH SECTOR

Based on Executive Summary and Foreword by Mary Robison, Based on Executive Summary and Foreword by Mary Robison, Corruption and Corruption and Health: Global Corruption Report, 2006Health: Global Corruption Report, 2006Transparency International, Feb.2006Transparency International, Feb.2006

ContentsContents

Introduction

Why is the health sector so prone to corruption?

RecommendationsConclusion

Highlightsfrom thePress Kit

INTRODUCTIONINTRODUCTION

CorruptionCorruption

‘‘The abuse of entrusted power for The abuse of entrusted power for private gain’private gain’

Transparency InternationalTransparency International

Corruption in the Corruption in the health sectorhealth sector

EncompassesEncompassesBribery of regulators and health Bribery of regulators and health professionalsprofessionalsManipulation of information on drug trialsManipulation of information on drug trialsDiversion of medicines and suppliesDiversion of medicines and suppliesProcurementProcurementOverOver--billing of insurance billing of insurance Not limited to public officials Not limited to public officials

Health ExpendituresHealth Expenditures

Globally US$3 trillion a yearGlobally US$3 trillion a yearAn attractive target for abuseAn attractive target for abuseStakes high and resources preciousStakes high and resources preciousMoney lost to corruption can be used Money lost to corruption can be used to buy medicines, equip hospitals and to buy medicines, equip hospitals and clinics and hire badly needed health clinics and hire badly needed health staffstaff

Scale of corruption Scale of corruption in health in health

Difficult to determineDifficult to determineVast in both developed and developing countriesVast in both developed and developing countriesUSA:USA: Spends more on health care than any other Spends more on health care than any other industrialized country industrialized country –– 15.3% of GDP; in 15.3% of GDP; in Medicare and Medicaid 5Medicare and Medicaid 5--10% of budget lost to 10% of budget lost to “overpayment”“overpayment”Cambodia:Cambodia: More than 5% of health budget lost More than 5% of health budget lost to corruption before it leaves central government to corruption before it leaves central government

CorruptionCorruption

Deprives people of access to health Deprives people of access to health carecareCan lead to wrong treatmentsCan lead to wrong treatmentsIn the pharmaceutical chain can be In the pharmaceutical chain can be deadlydeadly

Drug CounterfeitingDrug Counterfeiting

““Facilitated by corruption kills en masse Facilitated by corruption kills en masse and anyone can be a victim”and anyone can be a victim” –– Dora Dora Akunyili head of Nigeria’s FDAAkunyili head of Nigeria’s FDAFound water substituted for adrenaline and Found water substituted for adrenaline and active ingredients substituted by active ingredients substituted by counterfeitscounterfeitsTrigger drugTrigger drug--resistant strains of malaria, resistant strains of malaria, TB, HIVTB, HIV

The PoorThe Poor

Disproportionately affected by corruption in the Disproportionately affected by corruption in the health sectorhealth sectorLess able to offer small bribes for fee servicesLess able to offer small bribes for fee servicesUnable to pay for private alternatives where Unable to pay for private alternatives where corruption depleted public health servicescorruption depleted public health servicesPhilippines: Poor and middlePhilippines: Poor and middle--income municipalities income municipalities waited longer at public clinics than rich ones; waited longer at public clinics than rich ones; higher frequency of denied vaccineshigher frequency of denied vaccines

Corruption affects public policies Corruption affects public policies & spending priorities& spending priorities

Public officials in Kenya and the Philippines abuse Public officials in Kenya and the Philippines abuse their power to divert funds to ‘pet’ projects their power to divert funds to ‘pet’ projects irrespective of whether they are in line with irrespective of whether they are in line with agreed policiesagreed policiesWhen “feeWhen “fee--forfor--service” is applied, careservice” is applied, care--givers givers have incentives to provide unnecessary services have incentives to provide unnecessary services to maximize revenues; if they are paid ‘per to maximize revenues; if they are paid ‘per patient’, they can profit by not providing the patient’, they can profit by not providing the needed servicesneeded services

Reducing CorruptionReducing Corruption

Can inject revenues back into the health Can inject revenues back into the health sectorsectorUK: In the NHS, stopped corruption UK: In the NHS, stopped corruption totaling more than US$300 million since totaling more than US$300 million since 1999; total financial benefits equals US$1.2 1999; total financial benefits equals US$1.2 billion, enough to build 10 new hospitalsbillion, enough to build 10 new hospitals

WHY IS THE HEALTH WHY IS THE HEALTH SECTOR SO PRONE TO SECTOR SO PRONE TO

CORRUPTION?CORRUPTION?

Certain characteristics make all health Certain characteristics make all health systems vulnerable to corruptionsystems vulnerable to corruption

Imbalance of information Imbalance of information –– health professionals health professionals have more information than patients; have more information than patients; pharmaceutical companies know more about their pharmaceutical companies know more about their products than public officialsproducts than public officialsUncertainty in health markets Uncertainty in health markets –– not knowing who not knowing who will fall ill, when illness will occur, what kind of will fall ill, when illness will occur, what kind of illness people get, how effective the treatment isillness people get, how effective the treatment isComplexity of the health system Complexity of the health system –– large number of large number of parties involved; relationships between medical parties involved; relationships between medical suppliers, health care providers and policy makerssuppliers, health care providers and policy makers

Types of corruption in the Types of corruption in the health sectorhealth sector

Embezzlement and theftEmbezzlement and theftCorruption in procurementCorruption in procurementCorruption in payment systemsCorruption in payment systemsCorruption in the pharmaceutical supply Corruption in the pharmaceutical supply chainchainCorruption at the point of health service Corruption at the point of health service deliverydelivery

Recommendations for the Recommendations for the health sectorhealth sector

Recommendations for the Recommendations for the health sectorhealth sector

Anticorruption measures must be tailored Anticorruption measures must be tailored to fit the particular context of a country’s to fit the particular context of a country’s health systemhealth systemCorruption less likely on societies where Corruption less likely on societies where there is rule of law, transparency, trust, there is rule of law, transparency, trust, effective civil service codes and strong effective civil service codes and strong accountability mechanismsaccountability mechanismsPreventive measures Preventive measures –– procurement procurement guidelines; codes of conduct for operators guidelines; codes of conduct for operators in the health sector in the health sector –– both individual and both individual and institutional; and transparency and institutional; and transparency and monitoring procedures are helpfulmonitoring procedures are helpful

TransparencyTransparency

Governments and health Governments and health authorities publish regularly authorities publish regularly updated information on health updated information on health budgets and performance at budgets and performance at national, local and health national, local and health delivery centre levelsdelivery centre levelsHealth funds are subject to Health funds are subject to independent auditsindependent auditsInformation about tender Information about tender process publicly availableprocess publicly availableImplementing an effective Implementing an effective nationwide systems for nationwide systems for reporting adverse drug effectsreporting adverse drug effects

Develop a public database Develop a public database listing the protocols and listing the protocols and results of all clinical drug trialsresults of all clinical drug trialsDonors be open and explicit Donors be open and explicit about what they are giving, about what they are giving, when and to whom and when and to whom and should evaluate their should evaluate their programmes in terms of programmes in terms of health outcomes and not health outcomes and not level or speed of level or speed of disbursementdisbursementDonors coordinate their Donors coordinate their support to the health sectorsupport to the health sector

Codes of ConductCodes of Conduct

Introducing and promoting codes of conduct through Introducing and promoting codes of conduct through continued trainingcontinued trainingCodes should make explicit reference to preventing Codes should make explicit reference to preventing corruption and conflicts of interestcorruption and conflicts of interestPharmaceutical, biotech and medical device companied Pharmaceutical, biotech and medical device companied adopt the Business Principles for Countering Briberyadopt the Business Principles for Countering Bribery

Civil society participation Civil society participation and oversightand oversight

Health authorities introduce avenues for public oversight, Health authorities introduce avenues for public oversight, which should oversee procurement and rugs selection at which should oversee procurement and rugs selection at facility level and health delivery at community and local facility level and health delivery at community and local health board levelhealth board levelPublic policies, practices and expenditures open to public Public policies, practices and expenditures open to public and legislative scrutinyand legislative scrutiny

Whistleblower protectionWhistleblower protection

Governments introduce whistleblower protection for Governments introduce whistleblower protection for individuals working in procurement bodies, health individuals working in procurement bodies, health authorities, health service providers and suppliers of authorities, health service providers and suppliers of medicines and equipmentmedicines and equipmentPharmaceutical companies introduce whistleblower Pharmaceutical companies introduce whistleblower mechanisms and protectionmechanisms and protection

Reducing Incentives for corruptionReducing Incentives for corruption

Governments continuously monitor payment mechanismsGovernments continuously monitor payment mechanismsDoctors, nurses and other health professionals paid a decent Doctors, nurses and other health professionals paid a decent wage, commensurate with their education, skills and trainingwage, commensurate with their education, skills and training

Conflict of interest rulesConflict of interest rules

Regulators adopt conflict of interest rules that disqualify Regulators adopt conflict of interest rules that disqualify individuals or groups with an interest in the manufacturer individuals or groups with an interest in the manufacturer from participating in clinical trialsfrom participating in clinical trialsGovernments push for transparency in drug regulation Governments push for transparency in drug regulation processes, reduction in the excessive promotion of processes, reduction in the excessive promotion of medicines, tougher restrictions on doctors over prescribing medicines, tougher restrictions on doctors over prescribing drugsdrugsGovernments closely monitor relationships between the Governments closely monitor relationships between the health departments and the drug industryhealth departments and the drug industryMedicine licensing authorities define specific rules for Medicine licensing authorities define specific rules for physician behaviour regarding conflict of interestphysician behaviour regarding conflict of interest

Integrity and debarmentIntegrity and debarment

An Integrity Pact An Integrity Pact –– a binding agreement by both bidders and a binding agreement by both bidders and contracting agencies not to offer or accept bribes in public contracting agencies not to offer or accept bribes in public contracting appliedcontracting appliedCompanied found to have engaged in corrupt practices Companied found to have engaged in corrupt practices debarred by governments from participating in tender debarred by governments from participating in tender processesprocesses

Rigorous prosecutionRigorous prosecution

Authorities strengthen the message that corruption has Authorities strengthen the message that corruption has consequences by rigorously pursuing corrupt actsconsequences by rigorously pursuing corrupt actsProducers of counterfeit drugs and the public officials who Producers of counterfeit drugs and the public officials who collude with them prosecuted and duly sanctionedcollude with them prosecuted and duly sanctionedSpecial antiSpecial anti--corruption and fraud agencies detect corruption corruption and fraud agencies detect corruption and promote preventive measures equipped with necessary and promote preventive measures equipped with necessary expertise, resources and independenceexpertise, resources and independence

ConclusionConclusion

HealthHealth

A major global industryA major global industryA key responsibility and budget expense A key responsibility and budget expense for governments and businessesfor governments and businessesA global human rightA global human rightCorruption in heath deprives people of Corruption in heath deprives people of access to health care and to poor health access to health care and to poor health outcomesoutcomesRecommendations outlined could prevent Recommendations outlined could prevent and control corruptionand control corruption

ForewordForeword

by Mary Robisonby Mary Robison

CorruptionCorruption

The human rights community needs to pay more The human rights community needs to pay more attention to itattention to itAlongside poverty, inequity, civil conflict Alongside poverty, inequity, civil conflict discrimination and violence, it is a major issue that discrimination and violence, it is a major issue that has not been adequately addressedhas not been adequately addressedLeads to skewing of health spending priorities and Leads to skewing of health spending priorities and the leaching of health budgetsthe leaching of health budgetsPoor people decide against lifePoor people decide against life--saving treatmentsaving treatmentEffects people all over the worldEffects people all over the worldViolates human rightsViolates human rights

Most vulnerable populationMost vulnerable population

Africa Africa –– corruption and lack of corruption and lack of transparency are not addressed, HIV/AIDS transparency are not addressed, HIV/AIDS and other infectious diseases threaten to and other infectious diseases threaten to reverse the hardreverse the hard--won development gainswon development gainsWomen Women –– suffer most through suffer most through discrimination in service provisiondiscrimination in service provision

Human rights approach to Human rights approach to healthhealth

Ensuring that essential medicines are available, Ensuring that essential medicines are available, accessible and of good qualityaccessible and of good qualityAvailability: drugs on offer in sufficient quantity Availability: drugs on offer in sufficient quantity within countries where is the need for themwithin countries where is the need for themAccessibility: easily obtainable on a nonAccessibility: easily obtainable on a non--discriminatory basis to those who require themdiscriminatory basis to those who require themGood quality: drugs are scientifically and medically Good quality: drugs are scientifically and medically approvedapproved

Opportunities for corruptionOpportunities for corruption

Generated by unpredictability of disease, together Generated by unpredictability of disease, together with opaque spending decisions and aggressive with opaque spending decisions and aggressive marketing by medicine producers and suppliersmarketing by medicine producers and suppliersEffects the quality of medicines with far reaching Effects the quality of medicines with far reaching consequences such as stimulating drugconsequences such as stimulating drug--resistant resistant strains of killers such as malariastrains of killers such as malaria

The Global Corruption Report The Global Corruption Report 20062006

Unpacks the issues related to corruption and Unpacks the issues related to corruption and healthhealthThe immense challenge can only be tackled by The immense challenge can only be tackled by governments, international institutions, the private governments, international institutions, the private sector and the civil society working closely sector and the civil society working closely togethertogetherMake use of moral and legal arguments provided Make use of moral and legal arguments provided by the internal human rights framework and well by the internal human rights framework and well as the practical tools and strategies highlighted in as the practical tools and strategies highlighted in the reportthe report

Urgent NeedsUrgent Needs

Improving donor coherence, Improving donor coherence, transparency and willingness of transparency and willingness of developing countries to have rigorous developing countries to have rigorous systems of accountability to address systems of accountability to address corruptioncorruption

Press KitPress Kit

Theft, bribery and extortion Theft, bribery and extortion rob millions of proper rob millions of proper

healthcarehealthcare

Counterfeit drugs kill thousands each year and Counterfeit drugs kill thousands each year and accelerate spread of drugaccelerate spread of drug--resistant diseasesresistant diseases

““The price of corruption in The price of corruption in health care is paid in health care is paid in

human suffering.”human suffering.”

Huguette Labelle, Huguette Labelle, Chair of Transparency InternationalChair of Transparency International

CorruptionCorruption

Permeates the provision of health care Permeates the provision of health care –– public or private, simple or public or private, simple or sophisticatedsophisticatedPublic health budgets become subverted by unethical officials foPublic health budgets become subverted by unethical officials for r private useprivate useHospitals function as selfHospitals function as self--service stores for illifcit enrichmentservice stores for illifcit enrichmentHealth workers demand fees for services that should be free Health workers demand fees for services that should be free –– In In Bulgaria doctors accept informal payments or gifts ranging from Bulgaria doctors accept informal payments or gifts ranging from US$10 to US%50, and in some cases rising up to US$1,100US$10 to US%50, and in some cases rising up to US$1,100In the Philippines, a 10% increase in the extortion of bribes byIn the Philippines, a 10% increase in the extortion of bribes bymdical personel reduced the rate of child immunization by up to mdical personel reduced the rate of child immunization by up to 20%20%In Cambodia certain health indicators worsened partly because ofIn Cambodia certain health indicators worsened partly because ofdirect embezzlement of publichealth funds direct embezzlement of publichealth funds In the UK, tighter control mechanisms reduced losses to corruptiIn the UK, tighter control mechanisms reduced losses to corruption on by US$300 million since 1999by US$300 million since 1999In Costa Rica, nearly 20% of a US$40 million international loan In Costa Rica, nearly 20% of a US$40 million international loan for for =health equipment ended up in private hands=health equipment ended up in private hands

Market Distortions and counterfeit Market Distortions and counterfeit drugsdrugs

Aggressive marketing techniques buy doctors’ Aggressive marketing techniques buy doctors’ support for specific drugssupport for specific drugsMarketing and lobby budgets outpaced R&D Marketing and lobby budgets outpaced R&D outlaysoutlaysCorruption underpins a lucrative counterfeit drugs Corruption underpins a lucrative counterfeit drugs tradetradeCorruption in the pharmaceutical sector has a Corruption in the pharmaceutical sector has a direct and painful impact on people struggling for direct and painful impact on people struggling for survivalsurvival

Undermining the fight against Undermining the fight against HIV/AIDSHIV/AIDS

Corruption hampered the success of global efforts Corruption hampered the success of global efforts to reign in the HIV/AIDS pandemicto reign in the HIV/AIDS pandemicTheft by ministries and national AIDS Council of Theft by ministries and national AIDS Council of funds allocated for treatment leave sufferers with funds allocated for treatment leave sufferers with critical care critical care –– In Kenya National AIDS Council was In Kenya National AIDS Council was hijacked by a few highhijacked by a few high--level civil servantslevel civil servantsCorruption contribute directly to infection when Corruption contribute directly to infection when lowlow--costs measures cannot be carried out because costs measures cannot be carried out because of corrupt procurement and distribution processof corrupt procurement and distribution process

MDGs under threatMDGs under threat

Corruption undermined progress towards the Corruption undermined progress towards the MDGS in particular the three directly related to MDGS in particular the three directly related to health health –– child mortality; improved maternal health child mortality; improved maternal health and the fight against AIDS, malaria and other and the fight against AIDS, malaria and other diseasesdiseasesThe global community is already off target to meet The global community is already off target to meet them them –– and corruption is one of the causesand corruption is one of the causes

TI recommendsTI recommends

The cure for corruption starts with transparencyThe cure for corruption starts with transparencyDonors and recipient governments grant easy access to Donors and recipient governments grant easy access to information on key aspects of health,information on key aspects of health,--related projects, related projects, budgets and policiesbudgets and policiesAdopt and enforce codes of conduct for heath workers and Adopt and enforce codes of conduct for heath workers and private sector companiesprivate sector companiesProvide on going trainingProvide on going trainingIncorporate conflict of interest rules in drug regulation and Incorporate conflict of interest rules in drug regulation and drug licensing proceduresdrug licensing proceduresIndependently monitor public health policies and projectsIndependently monitor public health policies and projectsProcurement processes be competitive. Pen and transparentProcurement processes be competitive. Pen and transparentTI’s Integrity Pact adoptedTI’s Integrity Pact adoptedRigorous prosecution Rigorous prosecution Robust whistle blower protectionRobust whistle blower protection