Health System Regulation

The healthcare sector is one of the most heavily regulated sectors in many countries. Following a number of major scandals in the twentieth century such as the thalidomide disaster in the 1960s, wide-ranging regulation has been implemented in health systems to ensure that medicines are safe to use, healthcare professionals are adequately trained, and health facilities meet certain standards. For this reason, corruption in healthcare regulation is a serious issue and recognised as such – failures or breaches of regulation put patients in danger.

Corruption in regulation can involve officials demanding or accepting gifts and favours in return for providing approval or accreditation of a product, healthcare professional, health facility or college.

Alternatively, a conflict of interest may result in the official unduly awarding certification. For example, those being regulated may have to pay for the regulatory processes that apply to their product.

In Europe, medical device manufacturers have to pay one of dozens of companies, called notified bodies, to assess scientific information that shows a product is safe and in some instances effective. If the notified body deems the product to be safe then they will grant them a CE certificate to allow the company to sell their product.

However, there are risks of corruption with this process. Manufacturers can ‘shop around’ to find a notified body who will approve the device, with notified bodies competing with each other to provide the service. Since many notified bodies are ‘for profit’ they rely on manufacturers for custom, both then and in the future. Moreover, notified bodies have to conduct regular audits of the product once it’s on the market. These again are paid for by the manufacturer and there is a risk that a notified body will fail to act on concerns about a product.

These types of corruption are not constrained to individual cases. Entire sections of healthcare regulation can be captured by select groups, termed regulatory capture, and as a result serve their personal interests. In these situations powerful individuals and companies will ensure that they benefit most from the regulatory process and can dominate the healthcare sector.

To ensure regulation is successful and corruption risks minimised, regulatory agencies must be sufficiently resourced, independent from outside influence and have policies that ensure transparency and accountability for key procedures.

For example, guidelines outlining the criteria for inspecting a manufacturing site may necessitate inspectors with rotating schedules to ensure no close relationships develop with manufacturers. Adequate resources and independence for regulatory authorities depends on sufficient political support.

When people with vested interests sit on panels that approve new medicines, it is possible that the approval process for such medicines may be flawed.

— Igho Onakpoya - Research Fellow in Evidence-Based Practice and Pharmacovigilance, Centre for Evidence-Based Medicine, University of Oxford

Corruption Types

  • Inappropriate approval of products
    Officials approve or expedite the approval process due to personal or political connections with the supplier or the receipt of improper inducements.
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    Product approval is carried out to determine the quality, effectiveness and safety of a product. For drugs this will usually be carried out by a national or transnational drug regulatory agency.

    When approving products there are several specific risks. A supplier or manufacturer may bribe officials to register a product without the necessary documentation, such as clinical trial or study results demonstrating the safety of the product. Officials may deliberately slow down the product approval process to solicit a payment from the supplier. For example, officials may slow down the approval process for all suppliers, except for the one supplier from which they have extracted payments.

    Alternatively, officials sitting on the approval process panel may have a conflict of interest through holding a financial interest in the supplier seeking approval for a product, clearly compromising the integrity of the product approval process, and potentially resulting in unsafe or poor quality products entering the health system.

  • Improper product quality inspection and GMP certification
    Officials approve the quality of the manufacturing process or of the product itself due to personal or political connections with the manufacturer or the receipt of inducements.
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    A manufacturer may bribe an inspector to amend the evidence from a failed inspection so they maintain their manufacturing license. In an attempt to maximise profit, a manufacturer may use: a lower quantity of the active ingredient; poorer quality components; or cut other corners in the manufacturing process, making a product less effective.

    In particular, the Good Manufacturing Practices (GMP) are international guidelines that apply to manufacturers and related groups, to ensure the production of safe and high-quality products. If these practices are subverted through conflicts of interest or bribery there is a risk that products may harm patients. In order for countries to be able to export their medicines GMP standards must be met.

    Weaknesses and opportunities for corruption in this area of the regulatory system increase the risk of falsified and substandard products entering the health system.

  • Inappropriate product selection
    Individuals or groups select a product for a national product list due to personal or political connections with an official or the receipt of improper inducements.
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    Getting a product on a national or health facility product list is extremely lucrative for suppliers as they are more likely to be assured a certain volume of sales. The product selection processes could be compromised by an official with a personal connection, such as a financial stake, in a supplier offering their product for selection. Alternatively, a supplier may offer a gift to an official on a committee for selecting products.

  • Improper healthcare professional accreditation
    Individuals or groups approve a healthcare professional’s qualifications due to personal or political connections with the professional or the receipt of improper inducements.
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    Medical licensing bodies accredit health professionals in different ways. It may be exam-based or require skills to be signed off by a more senior colleague or overseeing body. This corruption type may be at risk of bribery and cronyism to accredit a health professional.

    In some countries, continued accreditation of a health professional requires them to demonstrate their competence throughout their working life, by a series of appraisals or tests by an appointed body or person. There is a risk of cronyism, as friends or acquaintances may approve the continued licensing of a health professional despite evidence they fall short of the required standards.

  • Inappropriate health facility certification
    Officials provide unwarranted certification to a health facility due to personal or political connections with the facility operators or the receipt of improper inducements.
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    Inspectors may seek improper inducements from health facility operators by creating unnecessary delays or simply refusing certification. In contrast, facility operators may offer bribes to inspectors in order to pass an inspection without having the required equipment or staff levels.

  • Inappropriate health college certification
    Officials provide unwarranted certification to a health college due to personal or political connections with the college owners or the receipt of improper inducements.
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    Inducements may include payments demanded or received by officials responsible for regulating health colleges. In contrast, politicians may put pressure on officials to provide certification for health colleges owned by friends or family.

    Health colleges that receive unwarranted certification may not have a sufficient number of staff or patients for students to learn techniques and procedures. This will limit the quality and quantity of education that healthcare professionals receive, putting patients’ lives in danger when they provide care and services. In some cases, health colleges may pay local residents to pretend to be patients in order to obscure the lack of real patients.

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