Bribery in Greece – Lessons for the EU

Posted by jim on 03/10/11

I’ve been looking more closely at the bribery of doctors and health care officials in Greece. My sources are mainly UK court documents, and documents released by UK Serious Fraud Office and the Securities and Exchange Commission and the Department of Justice in the US.

The bribery lasted for about eight years from 1998 onwards. The money was mainly paid to surgeons who prescribed medical devices (e.g. hip and knee replacements) made by affiliated or associated companies of Johnson & Johnson, trading mostly under some version of the “Depuy” name.

A standard 20% to 30% of net sales was paid through a company incorporated in the UK – Isle of Man. This was then used to pay off the Greek doctors, usually under the guise of “professional education”. Some of the doctors seem to have been pretty demanding; cash payments had to be made by another company within the group when the “regular” payments were delayed.

The amounts were large; the Greek government paid £33.5 million for the devices in question, according to UK court documents. The company’s profits amounted to over $20 million according to the SEC.

Unsurprisingly, medical devices were expensive in Greece – £4,400 for an prosthetic knee, as against an average of £2,200 and sometimes even £1,100 in the rest of Europe.

Doing my own sums with these figures, the £33.5 million paid by the Greek government would cover nearly 8000 patients for a knee replacement – although we are dealing here with a number of different devices and not just prosthetic knees. Nevertheless, some thousands of patients were treated by a surgeon who received a cash incentive to prescribe a particular device. This is not to say that all these patients were prescribed the wrong device. In some cases the chosen device may have been the correct one and the surgeon’s decision may not have been influenced by the payment. Also, I do not believe that every single Greek orthopedic surgeon was knowingly taking bribes.

What implications for EU policy? Well, there is an EU law (Directive 2001/83/EC) against payments to doctors in relation to medicines but there does not seem to be a similar EU ban on paying them to prescribe a particular medical device – I’ve asked DG Sanco if I am right about this.

The bribery in Greece (as in Poland and Romania) was uncovered under US law, and not it seems by any authorities in the EU, although national authorities have since become involved. There seems to be a case here for greater vigilance, and transparency, in Europe. Furthermore, the US law deals only with improper payments to foreign officials. Most Greek doctors met the definition of “foreign officials” in the US law, but (private) doctors in other member states might not be covered. Improper payments to these private doctors would not be caught under US law – would they be caught under European laws?

The improper payments to Greek surgeons were usually described as payments for “professional education”. In Europe, very little is known about industry expenditure on doctors in the form of continuing education, consultancies, speaking fees and the like. In most cases of course, these payments are not illegal but we should know more about them. Pharmaceutical companies should be required to publish a full list of all payments to doctors, as is now beginning to be the case in the US (with the coming of the Physician Payments Sunshine Act).

The Greek experience illustrates the need for better mechanisms for collective redress in Europe.

(Separately, and sadly, some of the company’s hip replacements – from 2003 on – are being recalled worldwide because of an unusually high failure rate.)

Finally, I should add that various steps have been taken by the Greek government, and indeed by the medical devices industry, to try to ensure that bribery of this kind, described as “endemic”, is not repeated.END

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