̽��ֱ�� of Cambridge - Lawrence King

IMF lending conditions curb healthcare investment in West Africa, study finds

fpjl2 — Wed, 11 Jan 2017 09:47:23 +0000

A new study suggests that lending conditions imposed by the International Monetary Fund in West Africa squeeze “fiscal space” in nations such as Sierra Leone – preventing government investment in health systems and, in some cases, contributing to an exodus of medical talent from countries that need it most.

Researchers from the Universities of Cambridge, Oxford and the London School of Hygiene & Tropical Medicine analysed the IMF’s own primary documents to evaluate the relationship between IMF-mandated policy reforms – the conditions of loans – and government health spending in West African countries.

̽��ֱ��team collected archival material, including IMF staff reports and government policy memoranda, to identify policy reforms in loan agreements between 1995 and 2014, extracting 8,344 reforms across 16 countries.

They found that for every additional IMF condition that is ‘binding’ – i.e. failure to implement means automatic loan suspension – government health expenditure per capita in the region is reduced by around 0.25%.

A typical IMF programme contains 25 such reforms per year, amounting to a 6.2% reduction in health spending for the average West African country annually.

̽��ֱ��researchers say that this is often the result of a policy focus on budget deficit reduction over healthcare, or the funnelling of finance back into international reserves – all macroeconomic targets set by IMF conditions.

̽��ֱ��authors of the new study, published in the journal Social Science and Medicine, say their findings show that the IMF “impedes progress toward the attainment of universal health coverage”, and that – under direct IMF tutelage – West African countries underfunded their health systems.

“ ̽��ֱ��IMF proclaims it strengthens health systems as part of its lending programs,” said lead author Thomas Stubbs, from Cambridge’s Department of Sociology, who conducted the study with Prof Lawrence King. “Yet, inappropriate policy design in IMF programmes has impeded the development of public health systems in the region over the past two decades.”

A growing number of IMF loans to West Africa now include social spending targets to ensure that spending on health, education and other priorities are protected. These are not binding, however, and the study found that fewer than half are actually met.

“Stringent IMF-mandated austerity measures explain part of this trend,” said Stubbs. “As countries engage in fiscal belt-tightening to meet the IMF’s macroeconomic targets, few funds are left for maintaining health spending at adequate levels.”

̽��ֱ��study also shows that the 16 West African countries experienced a combined total of 211 years with IMF conditions between 1995 and 2014. Some 45% of these included conditions stipulating layoffs or caps on public-sector recruitment and limits to the wage bill.

̽��ֱ��researchers uncovered correspondence from national governments to the IMF arguing that imposed conditions are hindering recruitment of healthcare staff, something they found was often borne out by World Health Organisation (WHO) data. For example:

In 2004, Cabo Verde told the IMF that meeting their fiscal targets would interrupt recruitment of new doctors. ̽��ֱ��country later reported to the WHO a 48% reduction in physician numbers between 2004 and 2006.
In 2005, a series of IMF conditions aimed to reduce Ghana’s public sector wage bill. ̽��ֱ��Ghanaian Minister of Finance wrote to the IMF that “at the current level of remuneration, the civil service is losing highly productive employees, particularly in the health sector”. Wage ceilings remained until late-2006, and the number of physicians in Ghana halved.

“IMF-supported reforms have stopped many African countries hiring, retaining or paying healthcare staff properly,” said co-author Alexander Kentikelenis, based at the ̽��ֱ�� of Oxford.

“Macroeconomic targets set by the IMF – for example, on budget deficit reduction – crowd out health concerns, so governments do not adequately invest in health.”

̽��ֱ��IMF’s extended presence in West Africa – on average 13 out of 20 years per country – has caused considerable controversy among public health practitioners, say the researchers.

“While critics stress inappropriate or dogmatic policy design that undermines health system development, the IMF has argued its reforms bolster health policy,” said Stubbs.

“We show that the IMF has undermined health systems – a legacy of neglect that affects West Africa’s progress towards achieving universal health coverage, a key objective of the United Nation’s Sustainable Development Goals.”

Research shows budget reduction targets and public sector caps, insisted on by the IMF as loan conditions, result in reduced health spending and medical ‘brain drain’ in developing West African nations.

We show that the IMF has undermined health systems – a legacy of neglect that affects West Africa’s progress towards achieving universal health coverage

Thomas Stubbs

DFID

Sierra Leonean Junior Doctor, Marina Kamara, follows up on a suspected kidney infection.

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Financial cycles of acquisitions and ‘buybacks’ threaten public access to breakthrough drugs

fpjl2 — Thu, 28 Jul 2016 10:10:12 +0000

New research on the financial practices surrounding a ‘wonder drug’ with a more than 90% cure rate for hepatitis C – a blood-borne infection that damages the liver over many years – shows how this medical breakthrough, developed with the help of public funding, was acquired by a major pharmaceutical company following a late-stage bidding war.

̽��ֱ��research shows how that company more than doubled the drug’s price over original pricing estimates, calculating “how much health systems could bear” according to researchers, and channelled billions of dollars in profits into buying its own shares rather than funding further research.

In this way, the company, Gilead Sciences, passed significant rewards on to shareholders while charging public health services in the US up to $86k per patient, and NHS England almost £35k per patient, for a three month course of the drug.

̽��ֱ��high prices have contributed to a rationing effect: many public systems across the US and Europe treat only the sickest patients with the new drug, despite its extraordinary cure rate, and the fact that earlier treatment of an infectious disease gives it less opportunity to spread.

Gilead’s strategy of acquisitions and buybacks is an example of an industry-wide pattern, say the researchers. Many big pharmaceutical companies now rely on innovation emerging from public institutes, universities, and venture-capital supported start-ups – acquiring the most promising drug compounds once there is a level of “certainty”, rather than investing in their own internal research and development.

̽��ֱ��researchers, from Cambridge ̽��ֱ��’s Department of Sociology, say this effectively leaves the public “paying twice”: firstly for the initial research, and then for patent-protected high priced medications. A summary of their research has been commissioned by the British Medical Journal (BMJ) and is published today.

“Large pharmaceutical companies rarely take a drug from early stage research all the way to patients. They often operate as regulatory and acquisition specialists, returning most of the subsequent profits to shareholders and keeping some to make further acquisitions,” said lead researcher Victor Roy, a Cambridge Gates Scholar.

̽��ֱ��study’s senior author, Prof Lawrence King, said: “Drug research involves trial and error, and can take years to bear fruit – too long for companies that need to show the promise of annual growth to investors, so acquisitions are often the best way to generate this growth.”

There are an estimated 150 million people worldwide chronically infected with hepatitis C. It disproportionately affects vulnerable groups such as drug users and HIV sufferers, and can ultimately lead to liver failure through cirrhosis if left untreated.

Roy and King’s article tells the story of the curative drug Sofosbuvir. ̽��ֱ��compound was developed by a start-up that emerged from an Emory-based laboratory that received funding from the US National Institutes of Health and the US Veterans Administration.

̽��ֱ��start-up, Pharmasset, eventually raised private funding to develop sofosbuvir. When Phase II trials proved more promising than Gilead’s in-house hepatitis C prospects, it acquired Pharmasset for $11bn following a bidding war – the final weeks of which saw Pharmasset’s valuation rocket by nearly 40%.

“ ̽��ֱ��cost of this late stage arms race for revenues has become part of the industry justification for high drug prices,” write Roy and King.

Once Sofosbuvir was market-ready in 2013, Gilead set a price of $84k. A US Senate investigation later revealed that Pharmasset had initially considered a price of $36k.

By the first quarter of 2016, Gilead had accumulated over $35bn in revenue from hepatitis C medicines in a little over two years – nearly 40 times Gilead and Pharmasset’s combined reported costs for developing the medicines.

Last year, Gilead announced that a lion’s share of those profits – some $27bn – will go towards ‘share buybacks’: purchasing its own shares to increase the value of the remaining ones for shareholders. By contrast, between 2013 and 2015 Gilead increased research investment by $0.9bn to $3bn total.

“Share buybacks are a financial manoeuvre that emerged during the early 1980s due to a change in rules for corporations by the Reagan administration. ̽��ֱ��financial community now expects companies to reward shareholders with buybacks, but directing profit into buybacks can mean cannibalising innovation,” said Roy.

A further example they cite is that of Merck, who spent $8.4bn in 2014 to acquire a drug developer specialising in staph infections. ̽��ֱ��next year they closed the developer’s early stage research unit, laying off 120 staff. Three weeks after that, Merck announced an extra $10bn in share buybacks.

In the BMJ article, the researchers set out a number of suggestions to counter the consequences of the current financial model. These include giving health systems greater bargaining power to negotiate deals for breakthrough treatments, and limiting share buybacks.

Roy and King also highlight a possible future model that uses a mix of grants and major milestone prizes to “push” and “pull” promising therapies into wider application, and, crucially, uncouples drug prices from supposed development costs, including those added by shareholder expectations. They write that this approach may be attempted for areas of major public health concern.

“ ̽��ֱ��treatments for Hepatitis C may portend a future of expensive therapies for Alzheimer’s to many cancers to HIV/AIDS. Health systems and patients could face growing financial challenges,” said King.

“We need to recognise what current business models around drug development might mean for this future.”

An analysis of a new drug’s journey to market, published today in the BMJ, shines a light on financial practices that see some major pharmaceutical companies relying on a cycle of acquisitions, profits from high prices, and shareholder-driven manoeuvres that threatens access to medicines for current and future patients.

̽��ֱ��treatments for Hepatitis C may portend a future of expensive therapies for Alzheimer’s to many cancers to HIV/AIDS. Health systems and patients could face growing financial challenges

Lawrence King

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Study finds little change in the IMF’s policy advice, despite rhetoric of reform

fpjl2 — Tue, 24 May 2016 07:43:18 +0000

A new study, the largest of its kind, has systematically examined International Monetary Fund (IMF) policies over the past three decades. It found that – despite claims to have reformed their practices following the global financial crisis – the IMF has in fact ramped up the number of conditions imposed on borrower nations to pre-crisis levels.

̽��ֱ��crisis revived a flagging IMF in 2009, and the organisation has since approved some of its largest loans to countries in economic trouble. At the same time, IMF rhetoric changed dramatically. ̽��ֱ��‘structural adjustment programs’ of austerity and privatisation were seemingly replaced with talk of the perils of inequality and the importance of social protection.

Researchers from the ̽��ֱ�� of Cambridge’s Department of Sociology collected archival material on the IMF’s lending operations and identified all policy conditions in loan agreements between 1985 and 2014 – extracting 55,465 conditions across 131 countries in total.

They found that structural adjustment conditions increased by 61% between 2008 and 2014, and reached a level similar to the pre-crisis period.

̽��ֱ��authors of the study, which used newly-available data and is published today in the Review of International Political Economy, say their findings show that the IMF has surreptitiously returned to the practices it claims it has abandoned: encroaching on the policy space of elected governments by enforcing free market reforms as conditions of lending. This is despite the IMF Managing Director Christine Lagarde rejecting concerns over the return of structural adjustment: “We do not do that anymore”*.

“ ̽��ֱ��IMF has publicly acknowledged their objectives to include creating breathing space for borrowing countries, and economic stability combined with social protection,” said lead author Alexander Kentikelenis. “Yet, we show the IMF has in fact increased its push for market-oriented reforms in recent years – reforms that can be detrimental to vital public services in borrowing countries.”

Although the IMF claims its programs can “create policy space” for governments, structural adjustment conditions can reduce this space as they are often aimed at an economy’s underlying structure: privatising state-owned enterprises and deregulating labour markets, for example.

“Our research suggests that structural adjustment is not a policy fad of the past,” said co-author Thomas Stubbs. “ ̽��ֱ��emphatic return of structural conditionality in recent years calls into question the IMF’s ‘we don’t do that anymore’ rhetoric. These reforms at the IMF are basically just hot air.”

Many of these conditions continue to intrude on policy areas such as the labour market, despite claims to the contrary. Post-crisis, examples have included:

̽��ֱ��elimination of 4,000 civil service positions in Moldova in 2010.
A 15% cut in pensions and raising of the retirement age in Romania, re-introduced as a ‘binding’ condition after it was struck down by the country’s constitutional court in 2010.
Extensive labour market liberalisation in Greece, including: the precedence of firm-level over sector-wide pay agreements to reduce the power of collective bargaining; the reduction of minimum wages and employee dismissal costs.
An increased retirement age in Portugal in 2012, followed by a realignment of public sector worker rights to “private sector rules”, including job termination.

In recent years, the IMF emphasised its attention to poverty reduction and social protection, with increasing use of conditions that specify minimum expenditures on health, education and other social policies.

̽��ֱ��researchers found that inclusion of social spending conditions had indeed jumped since 2012, mostly applicable to sub-Saharan African countries. However, after detailed analysis, the authors found that nearly half such conditions were not implemented. Yet those African nations with the weakest adherence to social spending conditions still consistently met, and often far-exceeded, the IMF’s fiscal deficit targets.

“ ̽��ֱ��IMF’s well-advertised ‘pro-poor’ measures are only superficially incorporated into programme design, and are, at best, of secondary importance to stringent macroeconomic targets,” said co-author Lawrence King.

Added Kentikelenis: “We have shown that the IMF has been particularly adept at introducing layers of ceremonial pretences of reform designed to obscure the actual content of its adjustment programmes. These gaps between rhetoric and practice in the IMF’s lending activities reveal an escalating commitment to hypocrisy.”

Researchers describe IMF as having an “escalating commitment to hypocrisy”, as study reveals that strict lending conditions have returned to pre-crisis levels, while ‘pro-poor’ targets frequently go unmet.

These gaps between rhetoric and practice in the IMF’s lending activities reveal an escalating commitment to hypocrisy

Alexander Kentikelenis

Mikhail Klimentyev

Russian President Medvedev meets with Christine Lagarde, Managing Director of International Monetary Fund

Reference

* “We provide lending, and, by the way, structural adjustments? That was before my time. I have no idea what it is. We do not do that anymore. No, seriously, you have to realize that we have changed the way in which we offer our financial support.” - Christine Lagarde, International Monetary and Financial Committee (IMFC) Press Briefing, Washington, D.C, April 12, 2014

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Opinion: More accountability needed in how drugs are priced and reimbursed

Anonymous — Mon, 23 May 2016 09:05:53 +0000

Approving new medicines that hit the market is the responsibility of the EU, but it is left up to individual member states to decide which ones they wish to subsidise. New prescription medicines can be very expensive and few patients could afford novel drugs for cancer and especially rare conditions if they had to pay out of their own pockets. But, thanks to state subsides, what most EU patients pay is only a fraction of the original price, be it in the form of a flat prescription fee (as happens in England) or various levels of patient co-payment depending on the patient and the medicine (as happens in Poland).

̽��ֱ��case of Poland is interesting. In recent years, it has adopted many institutional innovations that seek to ensure it makes sound pricing and reimbursement decisions. However, in new research we’ve published in the British Journal of Sociology we found that Poland’s pricing and reimbursement system (P&R) still lacks transparency and accountability, which allows informal social actors to evade regulations that govern conflicts of interest.

EU member states use complex policy instruments to determine how much they are willing to pay the pharmaceutical industry for its products (pricing) and which medicines are to be prioritised and made accessible to patients (reimbursement). Given the steeply increasing prices of new medicines, P&R has a considerable impact on budgets. In combination with finite health budgets (and often decreasing in real terms), P&R is associated with important “opportunity costs” and ethical dilemmas, as brilliantly portrayed in Andrew Wishard’s documentary, ̽��ֱ��Price of Life.

It has long been recognised that P&R decisions need to be based on sound evidence about drug efficacy, safety, cost-effectiveness and likely impact on health budgets. This has resulted in the increasing role of expert advisory bodies such as the National Institute of Health and Care Excellence (NICE) in the UK, carrying out scientific evaluations of medical, economic and ethical considerations associated with the public funding of new drugs. Politicians and civil servants involved in the process must also use clear criteria for making their decisions.

̽��ֱ��Polish paradox

Poland has been at the forefront of central European countries in embedding the principles of these scientific assessments into its P&R system. For example, Poland was quick to establish its Agency for Health Technology Assessment and Tariff System, while no equivalent body exists in the neighbouring, and more economically advanced, Czech Republic.

Nevertheless, Poland’s P&R has suffered from persistent irregularities, including lobbying scandals as well as strong corporate and political pressures on the agency it set up. These seem to be part of a general pattern of informal dealings in the healthcare sector, including the cherry-picking of winners in public tenders, nepotism and informal payments to doctors. Importantly, those involved in these dealings typically remain unaccountable.

Mechanisms of ‘deniability’

Drawing on more than 100 interviews with insiders in Poland’s system, we identified four mechanisms that amount to what political anthropologist Janine Wedel calls “deniability”.

• We found evidence of blurred boundaries between institutions involved in the policy process. This allowed policymakers, for example, to shift blame for controversial reimbursement decisions to bureaucratic or expert advisory bodies.

• Some of the key stakeholders played roles in different sectors – public institutions, the pharmaceutical sector or civil society organisations, and sometimes all at the same time. While these “coincidences of interest”, to use another term coined by Wedel, could reasonably be seen as controversial, they tended to escape the definitions of “conflict of interest” included in formal regulations.

• Playing multiple roles allowed stakeholders to maximise their influence by choosing the most convenient hat depending on the situation. For example, some legal advisers acted as “objective” commentators of reimbursement policy while representing pharmaceutical companies in the process.

• We identified evidence of activity of elite cliques. Members of these informal groups were able to coordinate their resources and influence while officially representing different organisations.

̽��ֱ��last few years have seen the introduction of more comprehensive rules governing conflicts of interest. This includes publishing increasingly detailed protocols from sessions of the Polish agency’s main expert advisory body and introducing toughened conflict of interest requirements for top ministerial medical advisers. Whether these improvements address the problem of limited accountability depends on whether policymakers are willing to act on the spirit rather than the letter of regulations, among other things.

Revolving door in other countries. Dan4th Nicholas, CC BY

These problems are clearly not limited to Poland. For example, in the US and the EU alike, concerns have been expressed over the revolving door between drug regulators and the pharmaceutical sector as well as some senior clinicians acting as seemingly independent third parties on the industry’s behalf. There have also been criticisms of the activity of some contract research organisations playing roles in multiple arenas ranging from organising clinical trials to delivering public relations services to drug companies.

What can be improved?

There are no easy solutions to the issues we have identified. One important way of addressing “coincidences of interest” is by introducing a comprehensive cooling off period for public officials leaving state institutions. This issue can also be addressed by continually reviewing conflict of interest policies, especially declarations submitted by those consulted in the drug evaluation process, to make sure they reflect emerging forms of collaboration with the pharmaceutical industry.

High ranking officials should also commit to building a culture of transparency by following conflict of interest disclosure declarations. There is also a big role to be played by journalists in the context of holding policymakers, civil servants and other stakeholders to account. And there is much for others in the EU to learn about what – and what not – to do, from Poland.

Piotr Ozieranski, Lecturer, ̽��ֱ�� of Bath and Lawrence King, Professor of Sociology, ̽��ֱ�� of Cambridge

This article was originally published on ̽��ֱ��Conversation. Read the original article.

̽��ֱ��opinions expressed in this article are those of the individual author(s) and do not represent the views of the ̽��ֱ�� of Cambridge.

Lawrence King (Department of Sociology) and Piotr Ozieranski ( ̽��ֱ�� of Bath) discuss how EU member states use complex policy instruments to determine how much they are willing to pay the pharmaceutical industry for its products.

Jamie

Pills

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Mining for Corruption

fpjl2 — Mon, 15 Jun 2015 10:00:26 +0000

̽��ֱ��American economist Alan Greenspan once described corruption as “the way human nature functions”, it’s just that successful economies manage to keep it to a minimum. ̽��ֱ��question, of course, is how.

In the digital age, with its ‘freedom of information’, corrupt uses of public finance for political and corporate cronyism should have fewer dark corners to hide in.

Since the late 2000s, virtually all developed countries digitised and made available public procurement data. However, this data deluge can create the illusion of transparency, with a fog of information so vast as to seem impenetrable.

Previously, exposing corruption often relied on the diligence of journalists and campaigners to sift through data and make connections. Such investigations require time and luck, and can be biased.

But now a team of data-driven sociologists have created a new measurement system for detecting exploitation of public finance, designed to take advantage of the new data avalanche. It’s a system that is likely to rattle those profiting corruptly at the public’s expense (and give activists good cause to salivate).

̽��ֱ��team defined key ‘red flags’: contractual situations that suggest high risks of corrupt behaviour. By unleashing ‘creeper’ algorithms and sophisticated text-mining programs on public procurement data to sniff these flags out, the team can map levels of corruption risk at regional and national scale, track corrupt behaviour in tendering organisations, and pinpoint suppliers and even individual contracts that look fishy.

̽��ֱ��Corruption Risk Index (CRI) mines available information about expenditure of public finances for political collusion, competition rigging and crony capitalism, all with unrivalled speed and accuracy. Developed by Dr Mihály Fazekas and Professor Lawrence King from the Department of Sociology, it forms the basis of the Digital Whistleblower, or ‘DigiWhist’, led by Cambridge with a consortium of European institutes, and which has just secured €3 million of European Union (EU) Horizon 2020 funding.

“Corruption is probably the number one complaint about people in power, but there were no really objective ways to measure corruption,” explains King.

“Using our methodology, institutionalised corruption can be measured right down to the level of individual contracts and tenders in about 50 countries around the globe since 2008 to 2009 – opening up a whole universe of scientific and policy applications. We aim to make CRI available to citizens, civil society groups and journalists, to hold politicians and political parties accountable for corrupt behaviour.”

̽��ֱ��project began when Fazekas had a brainwave while working on his PhD with King. In many developed nations since 2007, whenever the government purchased something over around €20,000 (or equivalent), the contract and tender data were made digitally available. In many countries, this is around 7% of the GDP – a big chunk of the economy.

Fazekas spoke to experts on public procurement to uncover the box of tricks often employed to fleece the public purse. Cannily, he also talked to companies who had fallen out of favour since their country’s government changed, “so they were happy to tell me how it was back in the day”. This work eventually led to the CRI’s 13 ‘red flags’ of corruption.

For example: very short tender periods (“if a tender is issued on a Friday and awarded on a Monday – red flag”); very specific or suspiciously complex tenders compared with the field (“like writing a job description for a role you want your friend to get”); tender modifications leading to bigger contracts; inaccessible tender documents; very few bidders in highly competitive markets. Different scales and combinations of flags allow researchers to create the risk rankings of the CRI.

Using an initial EU grant, the team conducted a proof of principle with data from Hungary, Slovakia and the Czech Republic. They found that firms with a higher CRI score made more money: the final contract value frequently came in much higher than the original estimate. These companies are also more likely to have politicians involved – either managing or owning them – and be registered in tax havens.

Over the next three years, the team aims to do this for procurement data across 34 European countries and the EU institutions, creating a corruption ranking that ranges from national to contract level. “Previous corruption indicators tended to be very blunt instruments. We can analyse regions and sectors but also individual organisations and loan officers. It’s an enormously powerful and fine-grained tool,” adds King.

̽��ֱ��DigiWhist project will encompass four different data labs across Europe to collect and ‘clean’ data, and build databases. While their current mechanism has manual elements, the next version – developed by Dr Eiko Yoneki’s team in Cambridge’s Computer Laboratory – will have self-learning algorithms that recognise errors and link to existing solutions from the database. “After an initial teaching phase, it will kind of run on its own,” says Fazekas.

All their findings will be made publicly available, with downloadable databases that can be interrogated by academics, journalists and, indeed, anyone with an interest in what happens to public money and in holding businesses and political parties accountable for corrupt behaviour.

Fazekas believes their results could be married with public crowdsourcing to build a more complete picture of the consequences of siphoning public funds.

“Imagine a mobile app containing local CRI data, and a street that’s in bad need of repair. You can find out when public funds were allocated, who to, how the contract was awarded, how the company ranks for corruption. Then you can take a photo of the damaged street and add it to the database, tagging contracts and companies,” says Fazekas, who is already working with DigiWhist advisors on prototypes.

“ ̽��ֱ��idea that the public are going to be able to interrogate this data on a very localised basis and contribute to it themselves through things like smartphone apps is a compelling one!” Fazekas adds.

For King, health will be a big focus. “One of the big debates is around deregulation and privatisation of health, and whether it increases efficiency. But does it increase corruption?

“There’s been a lot of talk of big data for a while now but not much has come out of it… By having researchers like Mihály, who straddle both tech and social science, I think we’ll start to see the potential for big data to turn into important findings that really do make the world better,” says King.

Inset images: Raised (CC: Att-NC-SA); Professor Lawrence King and Dr Mihály Fazekas ( ̽��ֱ�� of Cambridge).

Researchers have developed a new technique that trawls the enormous amounts of public procurement data now available across the EU to highlight unscrupulous uses of public funds: from national and regional levels to individual contracts, companies and politicians.

I think we’ll start to see the potential for big data to turn into important findings that really do make the world better

Lawrence King

Holly Occhipinti

Whistle while you work

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Drug pushing in the New Europe

ns480 — Fri, 23 Sep 2011 08:43:41 +0000

An investigation by academic researchers has revealed how backroom deals and discreet pressure by pharmaceutical corporations are determining which drugs are delivered to hospital patients in Poland.

̽��ֱ��study, which is described by one of its authors as a "warning for the New Europe", was led by sociologists at the ̽��ֱ�� of Cambridge, UK. It calls for an overhaul of Poland's drugs reimbursement system - the process by which government effectively signs off new drugs for use - and suggests that flaws in the system allow some treatments to be employed for therapeutic programmes even though their effectiveness is not guaranteed.

̽��ֱ��fact that pharmaceutical corporations lobby decision-makers in an effort to ensure that their products are taken up by national health programmes is well-documented in countries such as the UK. Less clear is how far this is happening in the former Eastern Bloc states which entered the European Union in 2004, and whether it is properly acknowledged and controlled.

̽��ֱ��new research, published in the journal, Health Economics, Policy and Law, identifies serious loopholes in the drugs reimbursement system used by the Polish government, arguing that it leaves companies with too much room to influence the final decisions taken by the Ministry of Health. Interviews the researchers conducted with industry insiders revealed that companies commonly try to buy the favour of key policy-makers, or “outflank” them by winning over expert advisors and pressure groups.

Dr. Lawrence King, from the Department of Sociology, ̽��ֱ�� of Cambridge, said: "This may be part of a broader syndrome of the prominence of informal institutions in post-communist policy-making, rather than something which is unique to Poland. For the New Europe, this could be a warning."

Reimbursement is usually the final hurdle for a company trying to get its drug on to the market and is typically determined by government. Final checks about the product's cost-effectiveness and efficacy are made before a decision is taken about how the manufacturer will be paid. This means that flawed reimbursement systems can lead to the wrong drugs being sanctioned for use by health service providers, resources being wasted and, potentially, patients not getting access to the treatments they need.

Poland was chosen for the study because it is the largest pharmaceutical market in Central and Eastern Europe and an important player in influencing the balance of power in the pharmaceutical sector. ̽��ֱ��researchers focused on a major state reimbursement schemes that funds free therapies, used by hospitals to treat rare diseases and certain types of cancer. Typically it means funding innovative and emerging drugs rather than generic treatments.

Between February 2009 and April 2010, the team carried out 109 in-depth interviews with people involved with this policy - among them government officials, drug company representatives, national consultants and representatives from patient groups. They also reviewed existing legislation, policy documents, official reports and media articles. Two specific disease awareness campaigns in Poland were also tracked by the researchers.

They found a lack of regulation in Poland concerning the development of therapeutic drug reimbursement programmes, and of the way in which drug companies approach ministers. One lawyer they spoke to described reimbursement as "legal terra incognita", while others described the process of decision-making as akin to "black magic".

In addition, the study found that the Polish Agency for Health Technology Assessment (AHTA), which recommends drugs to the Minister of Health, rarely has conclusive data from the drugs companies about their products. One official told the team: "In half of research results, we deal with drugs whose effectiveness cannot be established."

These factors conspire to create loopholes which pharmaceutical companies can then exploit. While the Polish Ministry of Health does have a formal consultation procedure for receiving clients, those who use it described it less as a means of access, and more as a technique used to muzzle “unfriendly" manufacturers.

Meanwhile, informal deals are taking place outside the system, the study found. Companies build up relationships with key decision-makers by offering them mutual favours, such as support for sick relatives, or lucrative positions in the industry. In one case referred to in the paper, a cardiology drug was accepted for reimbursement even though the scientific evidence supporting it was doubtful. Later, the press discovered that the decision had been taken after the relative of a high-ranking ministerial official had a new flat "arranged" by the drug company.

Where pharmaceutical companies cannot access ministers directly, the researchers found that they attempt to reach expert national consultants instead. ̽��ֱ��state offers little renumeration for these expert scientists' work, which enables drug firms to offer their own financial support, or the consultants access to trials and medical knowledge that will help them to raise their academic profile.

Similarly, firms also help out patient groups whose cause matches the treatments they are trying to sell. In extreme cases, they even manufacture them. One former official in the AHTA told the researchers about a case in which a reimbursement application for a kidney cancer drug was submitted. Almost simultaneously, a patients' association lobbying for precisely this kind of treatment appeared on the scene. "It could not have been a coincidence," the interviewee is reported as having said.

Other informal lobbying methods are also identified in the paper. ̽��ֱ��researchers spoke to newspaper journalists who had been telephoned by drugs manufacturers wanting to "order an article" in the paper. They also encountered cases where firms had approached different ministers in an attempt to exert indirect pressure on the Ministry of Health, or, in the case of international pharmaceutical corporations, asked their own governments to exert diplomatic pressure on Polish decision-makers.

̽��ֱ��paper notes that while some of these methods resemble techniques long-since recognised in western Europe and the US, they are exaggerated in Poland by the imbalance between the economic resources of drug companies, and those of other players such as patient groups or consultants.

In response, the researchers recommend comprehensive reform of the current system in Poland, which would involve more effective regulation of consultations between the Ministry of Health and drug companies, and a beefing up of financial and organisational support for third parties, so that they can adopt a genuinely independent role. ̽��ֱ��authors also recommend strengthening the AHTA as a check and balance against the Ministry, and measures making the Ministry's own considerations more transparent, so as to decrease "the opacity of pressures from other ministries or states."

̽��ֱ��full paper, Pharmaceutical lobbying under postcommunism: universal or country-specific methods of securing state drug reimbursement in Poland? is published in the latest issue of Health Economics, Policy and Law.

A new study reveals how drug reimbursement policy in Poland is leaving gaping loopholes for pharmaceutical firms to exploit, raising questions about other, post-communist, EU member states.

This may be part of a broader syndrome of the prominence of informal institutions in post-communist policy-making. For the New Europe, this could be a warning.

Lawrence King

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Wealthier, but not necessarily healthier

bjb42 — Wed, 07 Jul 2010 00:00:00 +0000

One of the most famous and influential mantras of Barack Obama’s chief economic adviser – that wealthier nations are also healthier – has been called into question by a new study.

̽��ֱ��research, by a ̽��ֱ�� of Cambridge-led team of social scientists, examined data from 22 countries to test the widely-accepted principle that stimulating economic growth will automatically improve public health levels, particularly in the developing world.

̽��ֱ��"wealthier is healthier" theory has been a guiding formula for both individual health ministries and many of the global financial bodies that support international development for almost 15 years.

It was first coined in a highly influential 1996 paper co-authored by Lawrence Summers, now Director of the US National Economic Council and a key Presidential adviser. This drew convincing parallels between the poor health of people in the developing world and their countries' economic performance.

Writing in the July issue of the journal Social Science and Medicine, however, the new report's authors argue that the principle over-simplifies the question of how to improve living standards in developing nations.

Drawing on almost 50 years' worth of data, they identified cases where the health of a population had worsened, even as a country's national income was on the rise. These anomalies occurred, the study suggests, because underlying issues of poverty and inequality had been left unresolved by policy-makers more concerned with overall economic growth.

" ̽��ֱ��'wealthier is healthier' argument is the idea that if you have economic growth, you are acquiring the resources that will help society's health to improve as a whole," Dr. Larry King, from the ̽��ֱ�� of Cambridge's Department of Sociology and one of the report's lead authors, said.

"Our study found that wealth is not enough. If policy-makers want to improve health, they need to look more closely at the impact that they are having on individual living standards as well."

" ̽��ֱ��current economic crisis has led to great concern among politicians, central banks and international financial organisations for restoring high rates of growth. According to these results, focusing on growth rather than poverty reduction and reducing inequality may lead to substantial loss of life."

̽��ֱ��paper suggests that the more subtle relationship between poverty, inequality and health has been written out of the policies of many leading financial organisations in favour of the "wealthier is healthier" principle.

Summers' original thesis has, indeed, been backed up by a body of subsequent research which agrees that health will automatically improve as a by-product of economic growth.

Researchers claim that this is not just because wealthier countries have more to spend on public health services and other social programmes; but because people living there can afford a healthier lifestyle and better medical care.

While the theory has been hugely popular, Dr. King and colleagues could find no prior research examining whether the wealth-to-health cause and effect pattern changes in cases where there is serious social inequality or a widening rich-poor divide. Tellingly, they also found that most previous work had focused on developed countries over relatively short periods of time.

̽��ֱ��Cambridge-led study was unique in this regard, examining the effects of poverty and inequality in 22 Latin American countries from 1960 to 2007.

It tested three standard measures of public health - life expectancy, infant mortality rates and tuberculosis mortality rates - against GDP per capita as a measure of economic growth. In addition, however, the researchers also fed information about poverty rates and income inequality into a series of statistical models to test their impact on the "wealthier is healthier" pattern.

̽��ֱ��initial results appeared to vindicate the traditional theory. Consistent with previous studies, the team found that income per capita has a profound effect on health. Each 1% rise in GDP was associated with a 1.17% reduction in infant mortality and an overall increase in life expectancy of about 22 days.

When that relationship between wealth and health was tested across the entire time period, however, a subtly different pattern emerged. During periods when inequality widened, for example, the study found that a 1% rise in GDP led to a much lower decrease in infant mortality rates of just 0.92% and had no effect at all on tuberculosis mortality rates or life expectancy.

At times when inequality in the same countries was narrowing, a rise in wealth had a much more profound effect. During those periods, a 1% increase in GDP was associable with a 1.51% fall in child mortality and a 1.79% drop in TB mortality, while average life expectancy improved by 51 days.

Similarly, where the sample countries experienced a rise both in GDP and poverty levels, economic growth had no effect on life expectancy or TB mortality and only a modest impact on infant deaths. All sets of data improved dramatically, however, during periods of falling poverty.

"Does wealthier mean healthier? Our view is it very much depends," Dr. King added. " ̽��ֱ��implication here is that health depends on how rising income is distributed. Many of the poorest people in society would agree - perhaps it is time that those making the policies which affect their lives listened."

One of the most famous and influential mantras of Barack Obama’s chief economic adviser – that wealthier nations are also healthier – has been called into question by a new study.

̽��ֱ��'wealthier is healthier' argument is the idea that if you have economic growth, you are acquiring the resources that will help society's health to improve as a whole.

Dr. Larry King

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