From Bad Pharma to Good Pharma: Aligning Market Forces with Good and Trustworthy Practices through Accreditation, Certification, and Rating

2013 ◽  
Vol 41 (3) ◽  
pp. 601-610 ◽  
Author(s):  
Jennifer E. Miller
Keyword(s):  
Pharmaceutical Industry ◽  
Best Practices ◽  
Credit Rating ◽  
Revolving Door ◽  
Rating System ◽  
Pharmaceutical Companies ◽  
Market Forces ◽  
Conflicts Of Interests ◽  
Rating Agencies

Could an accreditation, certification, or rating mechanism help the pharmaceutical industry improve both its bioethical performance and its public reputation? Other industries have used such systems to assess, improve, distinguish, and demonstrate the quality of their services, processes, and products. These systems have also helped increase transparency, accountability, stakeholder confidence, and awareness of industry best practices. This article explains how market forces can be harnessed to recognize and promote better bioethical performance by pharmaceutical companies when there are good systems to accredit, certify, or rate. It concludes with a review of relevant failures of credit-rating agencies — such as conflicts of interests and revolving-door practices — to illuminate some of the pitfalls of developing a bioethics accreditation, certification, or rating system for pharmaceutical companies.

scholarly journals A hidden web of policy influence: The pharmaceutical industry’s engagement with UK’s All-Party Parliamentary Groups

PLoS ONE ◽  
2021 ◽  
Vol 16 (6) ◽  
pp. e0252551
Author(s):  
Emily Rickard ◽  
Piotr Ozieranski
Keyword(s):  
Pharmaceutical Industry ◽  
Conflicts Of Interest ◽  
Pharmaceutical Companies ◽  
Total Drug ◽  
Conflicts Of Interests ◽  
Policy Influence ◽  
Patient Organisations ◽  
Drug Companies ◽  
Health Related ◽  
Industry Needs

Our objective was to examine conflicts of interest between the UK’s health-focused All-Party Parliamentary Groups (APPGs) and the pharmaceutical industry between 2012 and 2018. APPGs are informal cross-party groups revolving around a particular topic run by and for Members of the UK’s Houses of Commons and Lords. They facilitate engagement between parliamentarians and external organisations, disseminate knowledge, and generate debate through meetings, publications, and events. We identified APPGs focusing on physical or mental health, wellbeing, health care, or treatment and extracted details of their payments from external donors disclosed on the Register for All-Party Parliamentary Groups. We identified all donors which were pharmaceutical companies and pharmaceutical industry-funded patient organisations. We established that sixteen of 146 (11%) health-related APPGs had conflicts of interest indicated by reporting payments from thirty-five pharmaceutical companies worth £1,211,345.81 (16.6% of the £7,283,414.90 received by all health-related APPGs). Two APPGs (Health and Cancer) received more than half of the total value provided by drug companies. Fifty APPGs also had received payments from patient organisations with conflicts of interest, indicated by reporting 304 payments worth £986,054.94 from 57 (of 84) patient organisations which had received £27,883,556.3 from pharmaceutical companies across the same period. In total, drug companies and drug industry-funded patient organisations provided a combined total of £2,197,400.75 (30.2% of all funding received by health-related APPGs) and 468 (of 1,177–39.7%) payments to 58 (of 146–39.7%) health-related APPGs, with the APPG for Cancer receiving the most funding. In conclusion, we found evidence of conflicts of interests through APPGs receiving substantial income from pharmaceutical companies. Policy influence exerted by the pharmaceutical industry needs to be examined holistically, with an emphasis on relationships between actors potentially playing part in its lobbying campaigns. We also suggest ways of improving transparency of payment reporting by APPGs and pharmaceutical companies.

Correction Mechanisms Shall Set Us Free

2018 ◽  
Keyword(s):  
Asset Pricing ◽  
Financial Markets ◽  
Systemic Risk ◽  
Credit Rating ◽  
Market Environment ◽  
Rating Agencies ◽  
Market Protection ◽  
Protection Mechanisms ◽  
Structural Mechanisms

Market protection mechanisms work well during calm periods, but some fail miserably during slowdowns, at just the time we need them to work. When the market environment turns inhospitable, the accelerators take over from the brakes. This article frames the issues concerning oversight mechanisms, which enabled the crisis, and structural mechanisms, which in many ways advanced it. We detail the potential for competition for clients to interfere with the objective judgment of three financial markets gatekeepers: the credit rating agencies, auditors, and asset pricing firms. Any perceived bias in the quality of gatekeeping services can undermine market confidence. We then explore regulatory and contractual shortcomings that, in the event of a downturn or crisis in confidence, can exacerbate a narrow complication. In addition to the classic lemons problems in the context of information asymmetries, the tight relationship between ratings and prices perpetuate any re-rating or repricing scenarios—they combine to create an overwhelming downward force. Serious action is required. If unattended, these shortcomings leave our economy needlessly exposed to the same crisis-era systemic risk concerns that present themselves when downturns can spiral, unrestrained, into meltdowns.

scholarly journals Drug company payments to General Practices in England: Cross-sectional and social network analysis

PLoS ONE ◽  
2021 ◽  
Vol 16 (12) ◽  
pp. e0261077
Author(s):  
Eszter Saghy ◽  
Shai Mulinari ◽  
Piotr Ozieranski
Keyword(s):  
Pharmaceutical Industry ◽  
Drug Company ◽  
Marketing Strategies ◽  
Conflicts Of Interests ◽  
Cross Sectional ◽  
Practice Characteristics ◽  
Important Target ◽  
General Practices ◽  
Financial Dependency

Although there has been extensive research on pharmaceutical industry payments to healthcare professionals, healthcare organisations with key roles in health systems have received little attention. We seek to contribute to addressing this gap in research by examining drug company payments to General Practices in England in 2015. We combine a publicly available payments database managed by the pharmaceutical industry with datasets covering key practice characteristics. We find that practices were an important target of company payments, receiving £2,726,018, equivalent to 6.5% of the value of payments to all healthcare organisations in England. Payments to practices were highly concentrated and specific companies were also highly dominant. The top 10 donors and the top 10 recipients amassed 87.9% and 13.6% of the value of payments, respectively. Practices with more patients, a greater proportion of elderly patients, and those in more affluent areas received significantly more payments on average. However, the patterns of payments were similar across England’s regions. We also found that company networks–established by making payments to the same practices–were largely dominated by a single company, which was also by far the biggest donor. Greater policy attention is required to the risk of financial dependency and conflicts of interests that might arise from payments to practices and to organisational conflicts of interests more broadly. Our research also demonstrates that the comprehensiveness and quality of payment data disclosed via industry self-regulatory arrangements needs improvement. More interconnectivity between payment data and other datasets is needed to capture company marketing strategies systematically.

Management Tenure and the Quality of Corporate Bond Ratings

2020 ◽  
Author(s):  
Eliza X. Zhang ◽  
Jason D. Schloetzer
Keyword(s):  
Firm Value ◽  
Credit Rating ◽  
Corporate Bond ◽  
Bond Ratings ◽  
Rating Agencies ◽  
Rating Accuracy ◽  
Ceo Tenure ◽  
Bond Issues ◽  
Robust Evidence

We examine the implication of management for credit rating quality by focusing on the relation between management tenure and rating quality. Using a large sample of corporate bond issues in the U.S., we find robust evidence that firms with longer-tenured CEOs have lower rating quality, as reflected in lower rating accuracy, informativeness, and timeliness. Further analyses uncover two channels that underlie this relation. One channel is through learned confidence: as CEO tenure increases, rating agencies learn about how the CEO influences firm value, which leads agencies to reduce their caution and effort in management assessment. The other channel is through developed relationships: as CEO tenure increases, rating agencies develop relationships with the CEO, which leads agencies to reduce scrutiny of or cater to the CEO and her firm. Overall, we show that management tenure has important implications for the external oversight of rating agencies.

FINANCIAL STATEMENT ANALYSIS THROUGH RATIO ANALYSIS OF SELECTED PHARMACEUTICAL COMPANIES

2020 ◽  
Vol 3 (4) ◽  
pp. 321-331
Author(s):  
Dr. Nirali Ketan Shah
Keyword(s):  
Credit Rating ◽  
Financial Statements ◽  
Financial Statement ◽  
Pharmaceutical Companies ◽  
Ratio Analysis ◽  
Labour Unions ◽  
Financial Report ◽  
Rating Agencies ◽  
Company Stock ◽  
A Company

Financial statements are the mirror which reflects the financial position, strength and weakness of the company. Financial statements of the company helps to know how a business is doing and how it’s useful internally for a company- stock holders and to its board of directors, its managers and some employees including labour unions, externally they are important to perspective investors, to government agencies responsible for taxing and regulating, to lenders such as banks and credit rating agencies & investment analysts & stock brokers. On the basis of financial Report here I compared the financial performance of the PHARMACEUTICAL INDUSTRY, particular CADILA HEALTH CARE and SUN PHARMACEUTICAL companies through ratio analysis. The result indicates that Cadila is doing much better on its EPS, however, one warning from the FDA got both the companies on almost the same track. Despite Cadila having higher numbers in the ratios and financials, we cannot help but notice the greater and consistent rise in the financials and ratios of Sun Pharma. Sun Pharma is consistently almost constant or rising in terms of managing its working capital, unlike Cadila which has seen some abrupt changes. Both the companies have tried to keep debt lower than its equity, hinting at the fact that pharmaceutical companies do not want timely interest obligation owing to their long cash conversion cycles and need of R&D.

Credit Ratings Accuracy and Analyst Incentives

2011 ◽  
Vol 101 (3) ◽  
pp. 120-124 ◽  
Author(s):  
Heski Bar-Isaac ◽  
Joel Shapiro
Keyword(s):  
Financial Crisis ◽  
Credit Rating ◽  
Credit Ratings ◽  
Incentive Contracts ◽  
Revolving Door ◽  
Credit Rating Agencies ◽  
Bank Profitability ◽  
Rating Agencies ◽  
Rating Agency

The financial crisis has brought a new focus on the accuracy of credit rating agencies (CRAs). In this paper, we highlight the incentives of analysts at the CRAs to provide accurate ratings. We construct a model in which analysts initially work at a CRA and can then either remain or move to a bank. The CRA uses incentive contracts to motivate analysts, but does not capture the benefits if the analyst moves. We find that rating agency accuracy increases with CRA monitoring, bank profitability (a positive “revolving door” effect), and can be non-monotonic in the probability of an analyst leaving.

scholarly journals Present and Future Position of Credit Rating

2012 ◽  
Vol 12 (2) ◽  
pp. 160-174
Author(s):  
Danuta Dziawgo
Keyword(s):  
Financial Market ◽  
Credit Rating ◽  
Safety System ◽  
Rating System ◽  
Credit Rating Agencies ◽  
Work Quality ◽  
Rating Agencies ◽  
The Future ◽  
Future Position

Abstract The aim of the elaboration is to draw attention to selected aspects of credit rating. For that reason, comparison and induction methods were used. The article deals with credit rating and its present importance for the financial market. On that basis, possible scenarios for credit rating importance in the future will be analysed. Nowadays, the credit rating system and credit rating agencies’ behaviour and work quality are discussed worldwide. Therefore, the article can be seen as a voice in the discussion about future architecture of financial market and safety system net.

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