Taking governance for granted

Living in Western Europe, largely free from corruption, it is difficult to imagine what happens to society if there is no good governance. Imagine that every time you need something from the government, you have to pay a bribe. Imagine if all jobs in governments, or in companies, are only given to relatives or to people that pay under the table. What if building permits are handed out right and left against a fee, and what if medicines get approvals without any data, and only if someone is bribed. This is unfortunately the case in many countries around the world. Think about how inefficient, and how irrational, everything becomes.

For a number of years I served as an advisor to the World Health Organization in Geneva, and their project on Good Governance in Medicine. In this project we tried (I am not sure it is still active) to map out governance issues in a number of countries, and to build stakeholder platforms to fix the problem. I still remember how one country expert told me how it worked in her country: It turned out that the Minister of Health, the Head of the Regulatory Authority (that approved medicines), the President of the Doctors’ Association, the President of the Pharmacists’ association, the owner of the only wholesaler, and the owner of the biggest national pharmaceutical company were all members of the same family. You will not be surprised when I tell you they were all very wealthy.

Recent developments in China have become a major focus in the media – and highlight the difficulties faced by healthcare systems operating under a lack of good governance. This Associated Press article highlighted “China’s dysfunctional health system” where “low salaries and skimpy budgets” make the acceptance of bribes presented in “hongbau” – the traditional red envelope commonly used for gifts – a common occurrence.

What should a law-abiding western company do in these markets? The only way is to do everything you can to stay clean: you send your best managers, your most suspicious auditors. But it is not fool-proof. If people are willing to sell fake milk, or counterfeit spare parts for aircraft, we have a problem. In a corrupt society people are very creative. The situation in China makes me very sad. It will take a long time to build good governance in the region, as a recent Economist article made clear. What the AP article makes clear is that the people who suffer most in such systems are patients – particularly those with less money. The Chinese Government decided a long time ago that hospitals should not make money from selling medicines. But they still do. Implementation has been slow. And while the Chinese Government has promised to increase health spending – in hopes of spreading the country’s riches more evenly to its less wealthy majority – this will undoubtedly be an expensive and time-consuming project: A company can try its best to do the right thing. But it is tough in some places.

Richard Bergström

Richard Bergström was appointed as Director General of the European Federation of Pharmaceutical Industries and...
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