Corruption of Pharmaceutical Companies in Canada Term Paper



by Susan

25 July 2018

The pharmaceutical industry is very essential in the health care system. The health sector forms one of the major responsibilities bestowed upon the government of Canada. The healthcare sector comprises of several departments, the most complex one being the drugs department. Pharmaceuticals match other types of health care services to reduce indisposition and impermanence rates and improve superiority of many patients’ lives. Since drugs have remedial and healing qualities, they are not exposed to the group of unoriginal commodities. Access to these medicines mostly is a matter of life and death. Most people in the world have serious illnesses, which require medication and yet lack access. In this regard, access to essential medicines has become a central topic in Canada. Availability of pharmaceuticals is a fundamental right in Canada; hence, the constant requires from the state to deal with the matter.

Pharmaceutical Companies in Canada

The medical industry in Canada is large and on constant expansion to global networks. The industry consists of public and multinational corporations responsible for the production and provision of medical care products, supplies and services for profit. Some of the popular medical products include wheelchairs, walkers, artificial limbs, hospitals, and home care services in the hospital, food and laundry services. This also includes the pharmaceuticals industry, which is an imperative and powerful participant in the medical industry complex. There are various managerial sectors under the drug department, which oversee the proper functioning of the field. Currently, the pharmaceutical department experiences several issues regarding the regulation of its activities. The major one being Canada citizens lacking sufficient access to the available pharmaceuticals. A good population of Canada lacks regular access to essential medicines. The government needs to ensure that people can easily get these medications without facing major difficulties. Another source of the issue is the body responsible for regulating pharmaceutical business and activities in Canada. Therefore, the government’s duties include ensuring access to pharmaceuticals and that the pharmaceutical systems are institutionally sound and transparent. The government is also responsible for establishing suitable mechanisms to moderate the probability of corruption, which can deny medicines to those in need.

Health reports on pharmaceuticals indicate the disparity in access to medicines and drug availability. Several factors contribute to these issues, including corruption. The pharmaceutical department in Canada is powerful, and it influences the regulation of drugs in the country. Pharmaceuticals are divided into various categories, which are both illicit and good drugs. The concerned parties use different factors to categorize the drugs. Majorly licit and illicit drugs are determined through the moral and economic-political process. Pharmaceuticals have a number of purposes in the healthcare industry. Drugs mainly help to manage symptoms and cure illness, alter psychic states and consciousness, have religious and spiritual meanings and functions. It is worth noting that pharmaceutical companies are responsible for the manufacturing of the illicit drugs under the assumption that they are safe to the user and environment. The companies also consider drugs safe since they have met the government’s standards as well as undergone proper and thorough tests. However, the provided reports indicate that these companies rarely meet these set standards neither do they conduct necessary tests. The major notable challenge for the regulatory bodies is that drugs and biomedical industries majorly focus on profits.

Corruption of pharmaceutical companies have adverse effects on the entire population, especially the poor one. The burden of corruption mainly affects poor people due to their limited access to the resources. Some of the people vulnerable to corruption in pharmaceuticals include women and children. For example, there high rates of deaths amongst pregnant women due to limited access to drugs and maternity facilities. On the other hand, bribery lowers the vaccination rate of children and dejects the use of free clinics. Corruption in Canada’s pharmaceutical companies hinders improvement in health outcomes.

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Reasons for Significant Profits in Pharmaceutical Companies in Canada

According to recent reports, the pharmaceutical industry is a profitable one. Various reasons contribute to this profitable aspect of the industry. There is a limited link between manufacturing costs and price due to lack of price competition. In most cases, the existing pharmaceutical invention are profit-oriented and have the minimal emphasis on the medical value. For example, in Canada, around 46% of new pharmaceuticals in the market served as extensions of the existing products. Another major reason is patent protection, which limits competition. The current laws allow a company to have exclusive rights to manufacture and distribute any drug it invents. This limits development of the drugs and enhances corruption activities. The patent period in Canada ranges from seven to ten years, under which the responsible company can produce generic drugs. Another major reason for the high profits in the pharmaceutical industry is that the companies rarely research or develop medications. This practice is paramount, especially when the invented drugs cure uncommon illnesses, and materials for the drugs are not subject to patents. There are actually no new drugs in the market. The pharmaceutical companies mainly produce new drugs based on the existing similar drugs hence less funds spent on research and manufacture. Moreover, generic drugs have less production costs compared to the original ones. Considering this aspect, corruption can occur under many circumstances. For example, medical practitioners and the manufacturing companies usually have the agreement not to prescribe generic drugs.

Finally, the industry rarely has wastes. In the event of Canada, having out of date drugs, they always find a place to dispose of, especially in Third World countries. Therefore, the companies aim to recover any manufacturing costs incurred; hence, there are no loses. This is also an avenue for corrupt activities. There are no strict laws and regulations governing the pharmaceutical companies and, therefore, they can engage in such activities without facing any penalties. In addition, recent times have seen changes in drug availability. The rule of people obtaining drugs only with prescriptions is currently not applied. The sale of drugs over the counter, such as emergency contraceptives, is increasing. Therefore, corruption thrives in the industry since nobody monitors the drugs in the market. The drug companies are responsible for their activities; hence, there is no proper standards. On the other hand, these companies rarely provide sufficient information regarding drugs to the consumers. This information is usually limited, and the consumers have to pay more to understand products are the best to satisfy their needs.

One of the popular theories, which best explains the corrupt activities in the pharmaceutical industries is institutional corruption. According to this theory, these activities are performed under responsibility of a single institution rather than individuals. From the above argument, it is apparent that corruption of pharmaceutical companies rarely occurs at the individual or personal level. According to this approach, the established congressional ethical laws and regulations fail to place any effect. In this case, the few rules set by the pharmaceutical companies serve the minimal purpose in the regulation of the industry. Institutional corruption theory works under four major categories applicable to the pharmaceutical companies. The provided information on the corruption of corresponding pharmaceutical companies explains the role of the institutions in breaching their fiduciary duty. Pharmaceutical companies have trust responsibilities to all Canadian citizens in the manufacture, distribution, and marketing of their products. The people trust that the products will meet the established standards and will serve the expected purpose. Nevertheless, from the above conversation, it is apparent that the companies rarely follow this ideology since there are various fake drugs in the market. Some of the pharmaceutical products are substandard and still find their way to the market. Another category of institutional corruption is fraud or otherwise unfair commercial practices. Pharmaceutical products are delicate products since they directly affect the users’ body and health. However, when the companies make advertisement of these products, they rarely provide full information in regards to the effects, constituent, and costs. The consumers rely on the little information provided to make medical decisions, which is very unfair.

Destructive behavior of the firm is a constituent of institutional corruption theory. According to this category, the firms need to abide by the set rules and regulations. This should include the whole process, from the initial step of raw materials acquisition to the production of the final product. In addition, the companies need to understand and implement the human resource ideologies in the company, install proper procurement procedures and any other relevant functions, which govern the operation of the companies. These implementations and guidelines will be beneficial in the fight against corruption. Finally, institutional corruption theory entails mistakes, inefficiency, or incompetence. The key points in any pharmaceutical company include registration, selection, procurement, distribution, and service delivery. Example of unethical practices under procurement level occurs when the suppliers may bribe public officials to gain monopoly positions in the tender process. To minimize these practices, pharmaceutical companies need to be transparent, especially in written procedures, which describe obtaining processes and benchmarks to reward contracts that are accessible for community inspection. All these points have major loopholes for corruption. Weak pharmaceutical companies are unable to regulate the sector properly and increase the chances for corruption. Moreover, the companies engage in the production of counterfeit drugs, a problem that precedes the first decision point in the pharmaceutical chain.

Institutional corruption is a normative perception of rising connotation, which personifies the methodical reliance and casual practices that misrepresent the companies’ societal mission. Studies on the corruption of pharmaceutical companies in Canada report that the companies hide, ignore, or misrepresent evidence concerning new drug inventions, distort the medical literature, and misrepresent products to prescribing physicians. Instances of potential unprincipled rehearse in the choice of medicines are diverse. Some companies have manufacturers, and importers agree to inducements to communal representatives to include the particular medicine in the indispensable medicines list. This will, in turn, increase the sales of the companies, and sometimes these medicines are substandard. In case of conflicts, group members with a clash of concern can affect final decisions, which may be biased.  Finally, sometimes there exist bad products to use indication by the selection committee. Curbing of these potential susceptibilities to venality is best through the rigorous application of the procedures and ethical principles stipulated. Institutional corruption theory explains the source of corruption in this state since the industry has commercialized the role of physicians and weakened their position as self-governing, confidential advisers to patients.

Another theory, which supports the correction of corruption in pharmaceutical companies in Canada, is advocacy through moral leadership. The government can encourage operative means of sponsoring the agreement and presentation of a fresh principled agenda as well as the code of conduct. Physicians and other medical practitioners need to apply the ethical framework and code of conduct in their qualified and individual lives set the principles for all to follow. Socialization of a principled framework and code of conduct is an important theory in the corruption of pharmaceutical companies. These codes are necessary for the field members to learn, internalize, and promote them.

Drugs Prescription

Pharmaceuticals are the existing commodities, which require direction and recommendation before use. In most cases, the patients who purchase drugs have recommendations from their doctors. The industry has competition, and this prescription aspect can greatly lead to corruption. In essence, it is easy for drug companies to collude with doctors and only prescribe drugs from the particular company. Sometimes, patients do not require drugs, but doctors feel they need to do something and prescribe them. The reports equally indicate that doctors’ prescriptions majorly rely on the social characteristics of the patients and their health conditions. For this reason, they prescribe expensive drugs to the rich and less expensive to the poor. Promotion of medical products also influences doctors’ prescriptions. Doctors overlook the actual use of the drug and recommend popular pharmaceuticals. They receive insufficient information from manufacturing companies hence will sometimes rely on advertised information of the given drugs. Corrupt activities in the industry arise from doctors’ prescribing drugs not needed by patients. This actually contradicts the honesty theory aligned to the medical field. In this case, patients fail to know the negative side effects of a drug and corresponding contradictions. Sometimes, the information on costs of drugs is not available to both doctors and patients.

Recommendations to Curb Corruption in Pharmaceutical Companies in Canada

Concerned health parties agree that the government should play a major role in the regulation of the drug industry. However, they are skeptical that the government’s role tends to be inadequate. For this reason, almost half of the manufactured drugs fail the modern tests of effectiveness and safety. Government authorities do not have stringent measures to curb the marketing and distribution of substandard drugs in the country. The monopoly idea of drug companies makes it difficult to have proper rules and regulations to investigate corrupt activities. The government needs to perform regular inspections on pharmaceutical companies to ensure they meet the set standards and implement necessary rules and regulations. It is clear that several companies conduct their business in the medical field without proper certification. Another measure includes licensing of companies. Pharmaceutical companies seeking to operate in the field will require licensing from the relevant authorities.

The government needs to formulate strict rules and laws, which will envisage the manufacturing, distribution and use of all pharmaceutical products. Once the laws are in place, any drug company engaging in corrupt activities, which go against the set laws, should face harsh penalties. Concerning efficiency, these responsibilities should not be borne by the drug companies, but by a separate body. The responsible person should be also responsible for testing drugs before they are distributed to the market. Currently, the Canadian government allows the pharmaceutical companies to test drugs manufactured. This contradicts the set rules whereby the manufacturer monitors its products. There will be high chances of uncouth behavior and reports on the standards of the manufactured drugs. The government needs to increase the drug-testing period. Initially, the drug-testing period was 36 months. The government reduced it to 18 months, which is insufficient for most drugs (Ensor & Antonio, 2002). In addition, the government needs to maintain a comprehensive list of unsafe drugs and publicize them to the country. Corruption is thriving from the pricing of the pharmaceuticals. The government should ensure the existence of standard prices for the drugs in order to avoid overpricing by pharmaceutical companies. As with any other commodity, the government has the responsibility to monitor prices for the different pharmaceutical products and services.


In order to curb corruption in pharmaceutical companies, it is necessary for the relevant bodies to implement strict regulations. More so, the Canadian government has a responsibility to ensure that these companies abide by the set laws regarding manufacture, distribution, and marketing of the pharmaceutical products. Such measures will ensure reduced cases of corruption.