Fraud and abuse in healthcare costs individual governments as much as $23 billion a year, according to estimates from the World Health Organization (WHO). In a fact sheet on its website, the WHO explains that corruption occurs throughout all stages of the medicines chain, from R&D to dispensing and promotion, and results in the loss of enormous amounts of public health resources. An estimated 10–25% of public procurement spending, including on pharmaceuticals, is lost to corruption. In developing countries, however, up to 89% leakage of procurement and operational costs has been observed.
"Unethical practices along the chain can take many forms such a falsification of evidence, mismanagement of conflict of interest or bribery," says the fact sheet. Examples include conducting clinical trials without regulatory approval, selecting a non-essential medicine for the essential medicines list and promoting the excessive use of medicine to increase profits.
Although some cases are highlighted by the media and regulatory authorities, many unethical practices go unreported. "This is due to fear of victimization and retaliation towards whistle-blowers, and a lack of incentives to come forward," says the fact sheet. "Some forms of corruption have become institutionalized to the point where people feel powerless to influence change in their countries."
According to the WHO, countries with weak governance within the medicines chain are more susceptible to being exploited by corruption as they lack appropriate medicines regulation, enforcement mechanisms and conflict of interest management. Countries with a higher incidence of corruption also have higher child mortality rates, even after statistically controlling the quality for healthcare provision.
To reduce corruption, the WHO believes that thorough checks are required at each step of the medicines chain. "Good governance, transparency, accountability, promoting institutional integrity and moral leadership are also essential," explains the fact sheet.