The Food and Drug Administration (FDA) estimates that counterfeit products make up more than 10 percent of the global pharmaceuticals supply. Altogether, the global market in sales of counterfeit drugs is estimated by the World Health Organization to be more than $32 billion annually, and the U.S.-based Center for Medicine in the Public Interest predicts that counterfeit drug sales will reach $75 billion globally in 2010.

Whether it takes the form of counterfeit products slipping into the supply chain or involves employees of your company engaging in unlawful pricing activities, fraud costs life sciences companies billions of dollars annually. The direct costs – settlements with third parties and the related defense costs – don’t include the more difficult to measure, yet real, adverse impacts. These include the impacts on your company’s standing in the capital markets and negative publicity – both of which degrade the reputation, integrity and ethical standing of life sciences organizations. Government agencies such as the Department of Justice, Securities and Exchange Commission and FDA are actively working to detect fraud within life sciences companies and deliver lofty penalties to those involved. Implementation of sufficiently robust fraud protection mechanisms is not just an option but is imperative to the financial health and reputation of your company. 

In the attached paper, Bob Clarke and Mark Stehr, both partners in the Forensic and Dispute practice of Deloitte Financial Advisory Services LLP, discuss common fraud schemes within the life sciences industry and offer effective strategies for mitigating fraud risks.

Related Content:
Podcast: Plugging the Holes: How the Life Sciences Industry Can Combat Fraud
Issues: Deloitte Forensic Center – Monitoring Hospital-Physician Contractual Arrangements to Comply with Changing Regulations