Need for stronger penalties?
August 6, 2012
THE Australian Competition &
Consumer Commission (ACCC) should
explore the scope for ‘meaningful
penalties’ which could be included
in the Medicines Australia Code of
Conduct, 17th edition.
The comments come as part of a
submission to the ACCC regarding
the updated Code from Bruce
Arnold, Lecturer at the University
of Canberra’s School of Law.
“It is clear that leading
corporations that are expected to
participate in the Code have
engaged in egregious bad practice
(signalled for example by the recent
multi-billion dollar settlement in
the US
involving GlaxoSmithKline),” he said,
adding that a token financial penalty
is not a meaningful deterrent.
“Some entities are clearly
unfussed by notions of corporate
reputational damage, particularly
when small-scale financial penalties
signal to the mass media that the
offence was insignificant,” he said.
“A US$3 billion settlement grabs
attention and shapes behaviour.
“Token penalties under the
current regime do not,” he added.
Arnold goes further to say that the
Code does not provide a “substantive
and adequate response to what are
fundamental issues involving a
range of actors in the health sector”.
“If industry and individuals are to
enjoy self-regulation that
regulation must be meaningful,
with effective enforcement of a
Code that represents best practice
rather than embodying a Potemkin
Village approach to industry
responsibility,” he said.
“The history of health sector
regulation in Australia and overseas
demonstrates that we cannot
expect meaningful change – in
essence an abandonment of what I
recently described as
pharmaceutical payola – unless the
Code reflects the commercial
imperatives of service delivery in
Australia and the weakness of
professional ethics regimes, evident
through the willingness of
practitioners to accept benefits
that have a tangible financial value
and raise legitimate concerns about
probity frameworks,” he added.
MEANWHILE Arnold also used his
submission to press for full
disclosure of payments to
individual practitioners and health
service groups, saying that there is
no compelling reason for Medicines
Australia not to establish “a more
granular disclosure”.
Arnold also argued that value of
the Code is eroded by the
Medicines Australia’s membership
structure, “which does not
encompass all major actors in the
sector”, saying that it would be
desirable to include substantial
entities such as Ranbaxy Australia
that offer substantial inducements
but fall outside the Medicines
Australia and GMiA codes.
Arnold also pushed for a greater
degree of engagement by industry
with other stakeholders – in
particular consumer associations
and other civil society bodies,
saying this would enhance the
legitimacy of the Code
development process and enable
industry to better address potential
misconceptions.
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