Is The Pharmaceutical Industry Really Trending To Transparency?
After decades of criticism from a number of public outlets and regulation by federal governments around the world, pharmaceutical trade groups in Europe and the United States have decided to change their policies regarding transparency in multiple aspects of their businesses. The European Federation of Pharmaceutical Industries and Associations and the Pharmaceutical Research and Manufacturers of America have decided that they would share their clinical trial data in addition to other research information that was formerly guarded tightly and protected on a regular basis. This change in policy is a significant one, and no doubt the industry trade groups were pressured to do it by a number of powerful institutions. But although transparency sounds good in theory, there are questions to whether or not it was actually the right decision in practice.
One of the biggest reasons that these companies were pushed to be more transparent were the allegations of bribery that many in the industry faced. A number of pharmaceutical companies have been accused of providing doctors with expensive gifts in exchange for buying and using their pharmaceutical drugs on patients. The allegations were dangerous ones for an industry that relies on the good reputations of doctors and the regulatory benefaction of governments. These transparency measures are meant to alleviate the bribery fears, but there is no indication that that’s actually the case.
Transparency sounds good on paper, but there are a number of problems that make it unattractive to businesses. The first is that it hurts their competitive advantage—even allowing other companies to know clinical trial results could have significant impacts on investment and other key cash flows. It also makes it more likely that new regulation would come down—such as the portions of the Affordable Care Act which mandate new transparency reporting in the pharmaceutical industry.