We first consider the introduction of “innovative” therapies to reimbursement. We then examine the mechanisms of lobbying instrumental in securing favourable reimbursement decisions from political elites. Next, we detail relationships between drug companies and medical experts who evaluate drugs applying for reimbursement. Finally, we explore social mobility between the state and the pharmaceutical sector.
Policy outcomes and stakeholder interests
We analyze the distribution of power over drug reimbursement by considering spending on highly expensive niche-buster medicines. Figure 1 demonstrates that expenditure on therapeutic programs was increasing at an unsustainable pace, with the total growth reaching 534.8% in real USD over seven years (Web Appendix 5).
The dynamics of spending on therapeutic programs was even more striking in the broader healthcare context. As evidenced in Figure 2, they were becoming a major rival to open reimbursement, the reimbursement scheme addressing large patient populations.
Additionally, Figure 3 demonstrates that the rapid growth of spending on therapeutic programs contrasted with slowly increasing expenses on long-term care and flat expenses on prophylactic programs financed by the National Health Fund.
The identified spending pattern is inconsistent with the historical institutionalist position, which would predict low or stable growth of budgetary spending. It supports, however, the expectations generated from the corporate domination, clique, and pluralist theories. First, it certainly boosted the profitability of firms pursuing the niche-buster business model. The public affairs director at a pharmaceutical company explained that “There has been great progress in the area of specialist drugs [which] ... are more numerous and ... better. Therefore, firms orient themselves towards them.” In particular, clinical characteristics of niche-buster medicines provide drug companies with strong arguments for negotiations with both medical experts and political elites. The public affairs director at a drug company argued,
The type of recommendation is strongly determined by the considered drugs. If the [Agency] evaluates a therapy which is fairly effective and has no alternatives, it is very difficult to issue a negative recommendation. Even more so when it is faced with mounting pressure from patients’ associations, key opinion leaders, and the media.
This account is supported by the outcomes of drug evaluation by the Agency. Figure 4 shows that between 2007 and 2011 the niche-buster strategy was consistently more effective in obtaining a positive Agency recommendation than the blockbuster strategy.
Overall, the likelihood of a receiving a positive recommendation was 74.5% for medicines applying for therapeutic programs and only 51.9% for drugs targeting open reimbursement. [WA-8].
Second, the uncovered spending pattern was also consistent with the interest of elite cliques, with members occupying key positions at the Ministry, in using spending on “newsworthy diseases” to boost their popularity among voters. For example, according to an ex-Ministry official, “Orphan diseases are a different matter. Even if there are only four or five patients and the treatment is very expensive, there’s still much to show off [in the media].” [WA-9, 10].
Finally, creating therapeutic programs met the demands of patient organizations from some condition areas. Nevertheless, this should not obscure fundamental differences between the interests of patients and the pharmaceutical industry, especially around drug safety (Abraham 2007), as well as opportunity costs and inequalities in healthcare access generated by prioritizing extremely expensive drugs for selected conditions. [WA-11, 12, 13].
We now analyze the social processes that—in the light of our interviews—underpinned the increasing spending on innovative drugs.
Lobbying for drug reimbursement
Contrary to what corporate domination theory would expect, drug companies’ formal access to the reimbursement process was constrained by long waiting periods and a narrow set of topics covered in official consultations. As the external affairs manager at a drug company summarized, “These possibilities to cater for a reimbursement application are extremely limited.” Taken on the face value, these observations would be consistent with the historical institutionalist position, envisaging constrained policy access for non-state actors, including corporations. Nevertheless, in fact, the procedure of restricted consultations involved a “ritualistic” use of formal institutions (Wedel 1998, p. 90), which allowed political elites to create the impression that they took a tough stance on profit-greedy multinationals. A director at a pharmaceutical market consultancy commented on formal meetings with drug companies:
[Q]uite simply, after the scandal with X [a high-ranking Ministry of Health official involved in irregularities in introducing a drug to reimbursement] ... they [Ministry officials] are afraid that they will lose their posts and ... will be grilled by the media…. A regulation [has been introduced] that they must meet in pairs or trios with people from the outside [i.e., representatives of the pharmaceutical sector]. So, it is totally trendy because they want to have peace and quiet. Because, you see, since they implemented this regulation there has been no scandal regarding drugs at the Ministry.... OK, they have buried the problem because there are no discussions [with the pharmaceutical industry].
However, pharma managed to bypass the rigid formal consultations. A Vice-Minister of Health admitted during a parliamentary hearing: “The lobbing legislation [which regulates drug companies’ formal access to Ministry] functions poorly.... [T]o say that those firms don’t lobby [apart from the formal meetings] would be a blatant lie, because they do so” (Piecha 2006).
Overall, we identified no evidence of effective insulation of the policy process, which would fall in line with historical institutionalism. Nor did we find evidence of privileged formal policy access enjoyed by drug companies, predicted by corporate domination theory. Our data did show, however, extensive informal openness of the policy process consistent with clique theory. [WA-14, 15, 16].
We now explore two primary lobbying methods revealed by our data—informal persuasion and third party endorsements, which correspond with the pattern of formal closedness and informal openness of the policy process.
Informal persuasion via cliques
Many pharmaceutical lobbyists and even some state officials viewed informal persuasion as a key lobbying method. A former high-ranking Ministry official noted: “If extreme wealth is at stake, informal methods must play a vital role.” Pursuing informal lobbying was premised on personal relationships with officials at the Ministry, the National Health Fund, and the Agency. A representative of an association of pharmaceutical companies stressed these ties could be decisive in determining the fate of drugs applying for reimbursement. “Some firms are successful [in securing access to the Ministry leadership]. This is based on contacts. Contacts among colleagues and friends are crucial.”[WA-17, 18].
The importance of informal lobbying was rooted in the composition of the social milieu involved in shaping reimbursement policy, comprising several tightly-knit “social circles” or cliques (Wedel 1998). “The group of people engaged in reimbursement is very small,” admitted a representative of an association of pharmaceutical companies, with its members sharing educational and career backgrounds. As an employee of a lobbying firm emphasized, “Only medical education allows for speaking with decision-makers who are doctors themselves.” Importantly, this group operated flexibly at the intersection of the public, private, and third sectors (Wedel 2009). For instance, some high-ranking state officials were lecturers in reimbursement policy for a Master of Business Administration course. According to an Agency official,
[T]his is corruption in velvet gloves. Who can afford to pay such fees for a course [around $10,000]? Only for drug companies this is no money whatsoever. So, this is a loophole for drug companies. In this way, they don’t have to pay the decision-makers directly.
Furthermore, social relationships within the social circles were durable and involved multiple social roles and ties (Wedel 1998, chapter 3). As an ex-high-ranking Ministry official described:
Ministers, decision-makers, doctors—they all came from the same context. They all had contacts with [drug companies’] reps [medical representatives]. Then the reps were promoted in their firms and started visiting ‘their’ doctors who became ministers.
Finally, the reimbursement policy domain formed “a closed circuit”, a journalist noted. The communications manager at a drug company recounted, “Just look at my career path. I initially worked for [firm] X, then for Y, later for Z.... But ... I have been meeting the same people all the time.”
A key consequence of the policy involvement of informal social circles was blurring the state-private divide (Wedel 2009), perhaps best illustrated by the development of public health technology assessment guidelines used by the Agency to evaluate drugs applying for state reimbursement. Despite formally representing different stakeholders, experts creating the guidelines constituted one social circle. The external affairs manager at a pharmaceutical firm commented:
All prestigious health technology assessment companies [developing reports that support drugs applying for reimbursement] ... and the Agency [evaluating the reports] originate from the same community. These are several dozen people who know each other very well. They have functioned in this small milieu for many years, studied together, formed a pressure group. Their paths have diverged with time but their work overlaps.
Being part of the expert group generated “coincidences of interest” (Wedel 2009, p. 12), at least for some representatives of health technology assessment companies operating based on the public guidelines. The public affairs director at a pharmaceutical company noted:
[Some of] [t]hose advisory firms utilize in a mercantile way their contacts and position in the system.... For me, this is a classic conflict of interest—it’s difficult to advise public institutions [i.e., the Agency] when being part of the process [i.e., developing commercial health technology assessment reports]. Increasingly, this unregulated intersection is becoming a major potential problem. [WA-19]
There were many forms of informal persuasion, all characterized by a low risk of “catching anyone red-handed,” according to a Ministry official. The cliquishness of the reimbursement policy domain was therefore instrumental in maintaining “deniability” (Wedel 2009) or “institutionalized unaccountability” (Hausner and Marody 2000) of both state and non-state actors involved in policy-making. For example, prosecutor’s investigation of irregularities associated with introducing drug A to reimbursement illustrates “food, flattery and friendship”, a method of generating extended reciprocity often observed in pharmaceutical policy in the United States (Angell 2005, p. 142).
X [high-ranking Ministry official] and Y [drug company’s representative] had close informal contacts. [They] met on numerous occasions both at the Ministry and restaurants as well as hotels.... the majority of bills for the meetings were paid by Y.... This ... suggested that it would have been highly likely that Y, ... using close contact with X, could have informally influenced [X] to introduce [drug A to reimbursement]. However, there is no evidence that these pressures occurred.... X’s conduct related to maintaining intimate contacts with the representative of a drug company must nonetheless be considered improper (Prokuratura Apelacyjna 2010, pp. 145-147).
A contrasting form of informal persuasion was “kompromat” (Ledeneva 2006, chapter 3). According to a high-ranking Ministry official, it was possible to
Imagine that a doctor attends [medical] congresses which a drug company sponsors for him, together with their ‘intimate side’. And they use this opportunity to take some pictures of him with this girl. Then when this man becomes, say, a ‘Vice’ [Vice-Minister], they’ve got him in their hands. This dirt is extremely powerful. [WA-20, 21, 22].
Overall, both the selective informal openness of the reimbursement process and the corresponding evidence of informal lobbying supported the expectations generated from Wedel’s clique theory.
Despite their clear preference for informal lobbying, not all drug companies had sufficiently strong personal connections to pursue it. As a manager at a HTA firm observed, only “Those who do not have impeded contacts meet leisurely in the evening with ministerial advisors and [Ministry] officials.” We focus below on the policy involvement of patient organizations to ascertain whether our data were more consistent with the neopluralist position (independent patient group lobbying) or the corporate domination theory (patient groups co-opted and used as lobbying instruments by pharma).
Third party techniques
In line with neopluralism, patient organizations enjoyed broad formal access to the reimbursement process: they participated in “social consultations” organized by the Ministry, submitted opinions and, unlike drug companies, gave testimonies before the Agency. Furthermore, patient organizations sought to influence the Ministry through protests and appearing in the media (Baggott et al. 2005, chapter 11). [WA-23].
In doing so, patients organizations commonly collaborated with pharma, given the shared interest in the speedy reimbursement of innovative drugs. [WA-24]. However, contrary to neopluralism, our interview evidence strongly suggested that these were not coalitions formed by equal partners. While the interviewed pharma’s representatives commonly stressed that their relationships with patient organizations were altruistic, they were often rather critical of their competitors. The president of the local branch of a multinational drug firm argued:
Often, campaigns are forced and used to exert pressure on drug policy. Cooperation with patients is very intensive when products are not reimbursed. But what happens after the product becomes available [in reimbursement]? Then a question can be asked if this was a real public campaign or rather a way to influence drug policy.
In particular, some drug companies created organizations tailored to lobbying campaigns linked to specific medicines (Healey 2004, pp. 225–226). A journalist elucidated:
A drug company has a new drug for a certain condition, yet it is not reimbursed.... The firm initiates the establishment of the association, since it has long-term contacts with doctors, key opinion leaders [in the medical milieu], and through them it accesses patients dispersed around the country. It also facilitates networking among patients from various places.... Then, patients associate and we have a new organization.
The association was subsequently involved in “actions favorable for this company,” as a former high-ranking Ministry official explained. For example, they “organize press conferences saying that there is a specific drug they would like to have reimbursed.” However, this is not to say these “assimilated allies” of pharma (Abraham 2009; Davis and Abraham 2011a) are devoid of motivated members. A director at a public relations company stressed: “The key thing is to have authentically involved people.… No communicational actor can control, mobilize patients, make them look credible.”
Establishing the “patient-industry complex” was clearly consistent with the corporate domination theory, and it involved methods of cooptation familiar from Western countries like the United Kingdom and the United States (Davis and Abraham 2010).
Some patient organizations were controlled through money transfers (cf. Abraham 2009, p. 959), the situation exacerbated by the dearth of state grants. A high-ranking Ministry official noted,
[I]f drug company X pays hundreds of thousands of euro, for instance, yearly, then they say plainly: ‘We finance your jobs and trips and it must be your role to explain that our drugs are the best.’
The financial dependence on drug companies is increased due to the dearth of available state grants. According to a national consultant,
In Poland, the institution of patients’ associations is turned upside down.... It is not like in the [United] States, where associations acquire money in various ways. Here, it is only a stream of money from one or another drug company.
Another method of control entailed the provision of manipulated medical information (Health Committee 2005, pp. 75–76). A Member of Parliament stated:
Parents are told that this medicine is super effective and will greatly improve their children’s state of health. Though all the signs are that this is not true. And those people, clinging to this fresh hope, contact each other and develop the organization.
Furthermore, pharma orchestrated the lobbying activities of some patient organizations. As a key account manager at a pharmaceutical firm recounted,
In Poland, patients’ associations lobby only when given impetus by the firms. They are simply unable to act on their own and need to be wound up like a mechanical toy. We need to tell them what to do, write letters or organize press conferences for them.
Not surprisingly, representatives of patient organizations were irritated by such allegations. The president of an association of patients suffering from diabetes argued:
Many journalists … piss me off so much on so many occasions! For example, [they claim] we defend [drug] companies so much, because they keep me on a string. And I say that I’m kept on their insulin, not their string, and that’s a fundamental difference.
Nevertheless, control over lobbying activities sometimes took subtle forms like the provision of lobbying know-how. Referring to the interviewee quoted above, the president of a domestic lobbying firm acknowledged that he had “conducted media training for him, which was ordered by a drug firm.”
A final method of control involved providing patient organizations with “charitable” donations of expensive niche-buster medicines applying for reimbursement. As a director at a domestic public relations firm described,
They [a drug firm] were giving away drugs apparently as a form of humanitarian aid. Patients got used to the drugs, which were unique in their kind. If the drug is taken away, you can expect loads of letters to the Ministry demanding its immediate introduction to reimbursement. [WA-25]
State officials often suspected that patient organizations were mobilized by drug companies (cf. Davis and Abraham 2010, p. 12). A high-ranking Ministry official argued: “The industry is always behind patients’ associations. Maybe not always but in the vast majority of instances.” Nonetheless, the effectiveness of patient organizations as a third party was still high given their impact on how political elites were portrayed by the media. The president of a pharmaceutical firm noted:
Politics is strongly shaped by public perceptions. A politician is always a politician in the first place and only then he is an expert. Obviously, the Minister would like to be photographed with serious experts and happy patients ... [and] would prefer to avoid a smear campaign where patients accuse him of being denied access to drugs. [WA-26]
Therefore, drug companies were uniquely positioned to offer elites attractive “credit-claiming opportunities” (Hood 2011, p. 71). According to a representative of an association of pharmaceutical companies,
When we find the right moment, the decision maker views our help as a blessing. For instance, we give him the drug and he can present himself as the savior. Or we can rescue him politically. Or show that the solution we propose will not be that costly.
Overall, the evidence of pharma’s close control over patient organizations and their effectiveness as a lobbying tool was more consistent with the corporate domination position than with neopluralism.
To summarize the discussion of the lobbying methods, our data confirm the expectations of both clique theory (informal lobbying via cliques) and the corporate domination theory (lobbying via patient organizations acting as “third parties”).
Even so, despite the evidence of powerful lobbying methods directed at state officials, historical institutionalists might still argue that the institutional set-up of the reimbursement process could limit clique or corporate control. Specifically, the near necessity of receiving a positive recommendation from the Agency for Health Technology Assessment could be a source of independent expertise supporting state autonomy in the reimbursement process. We now discuss whether this was the case.
Capturing medical experts
We examine the extent of independence of medical experts from pharma by focusing on the Consultative Council, the key expert body within the Agency for Health Technology Assessment, given its role in legitimizing reimbursement decisions taken by political elites. We analyze the breadth, nature, and consequences of relationships between the experts and the industry, without, however, making any claims about individual Council members.
The Ministerial “Register of benefits” (Ministerstwo Zdrowia 2011) reveals that nine out of ten Council members reported conflicts of interest between 2009 and 2011, a proportion significantly higher than in other European drug regulatory agencies.Footnote 5 Table 2 demonstrates three clusters of Council members, displaying high, medium, and low levels of relationships with pharma. A high-ranking Agency official commented on this pattern:
A geneticist or a philosopher doesn’t prescribe drugs.... That’s why from the perspective of drug companies those are not the types of people worth investing in. On the other hand, in the Council you also have an endocrinologist or oncologist. They are constantly under pressure, particularly if they are first class clinicians who prescribe very expensive drugs.
The fact that nearly every Council member had relationships with pharma and some of these were very close lent support with the corporate domination position, envisaging a high level of cooptation of medical experts by pharma. [WA-27].
We further examine the nature of relationships between the two sides by delving into specific types of conflicts of interests reported by Consultative Council members. The interview data are instrumental in understanding the significance of these ties for the medical experts (see Table 3).
First, relationships with pharma guaranteed experts’ access to cutting-edge medical knowledge through sponsored medical congresses (cf. Fishman 2004, pp. 195–196; Lakoff 2004, p. 263) and provision of research materials (cf. Abraham 2010a, p. 648; Healey 2004). This assistance was particularly important, because, as a regional consultant observed,
[A] Polish hospital usually doesn’t have money for salaries or energy, and subscribing to scientific journals, buying books or ... online access to medical data bases [is impossible]. I don’t know a hospital director who would do such things, since there’s simply no money for this.
An audit conducted by the Supreme Chamber of Control in a large hospital offers a quantitative illustration of the extent to which doctors’ research activities are supported by pharma (NIK 2007, p. 2; a similar pattern was identified in numerous other audited hospitals, e.g., NIK 2010a, 2010b):
During the period covered by the control, financial donations made by drug companies constituted 67.6% of all financial donations made to the hospital and [the companies] were among the most active in financing or co-financing foreign trips to symposiums and conferences.
Importantly, another report highlighted that in 8 out of 13 audited major hospitals the sponsorship of conference trips, seminars and training was unregulated and not monitored (NIK 2010a, pp. 54–57) [WA-28].
Second, pharma provided medical experts with financial incentives well described in Western countries (Angell 2005). For example, some medical experts attended sponsored professional meetings in high-end tourist destinations (Ministerstwo Zdrowia 2011). As a high-ranking Ministry official commented,
Trips to exotic places still take place. In Poland, there are no strict rules in this area.... It is only said that a conference should be organized decently but without lavishness, and it should not exceed the norms of hospitality.
Nevertheless, the most important mechanism was—like in the West (Angell 2005; Fishman 2004; Healey 2004)—the clinical trial. Audits conducted by the Supreme Chamber of Control demonstrate that in the absence of coherent oversight clinical trials constituted a system of exchange of favors between some senior doctors and pharma (NIK 2007, 2010a, 2010b). A high-ranking National Health Fund official charted:
Sometimes clinical trials are a legalized form of corruption. Firms pay vast amounts of money to a certain professor officially for being the principal investigator.... However, in reality he’s paid for promoting the drug among other experts, decision-makers and patients. This form of hidden financing is safer for a drug company. To pay for consulting or lectures, they need to prepare a contract and staggering sums would certainly look suspicious there. On the other hand, paying horrendously high fees for clinical trials doesn’t surprise anyone.
Similarly, audits conducted by the Supreme Chamber of Control in a number of hospitals demonstrated that clinical trials underpinned a system of exchange of favors between some drug companies and parts of the medical establishment (NIK 2007, 2010a, 2010b).
Another form of developing financial relationships with medical experts, extensively researched in the United States, was continuing medical education (Angell 2005, pp. 138–141; Fishman 2004). In Poland, this mechanism offered considerable opportunities for informal money transfers. As a national consultant noted,
It is obvious that for a lecture sponsored by a drug company I receive a negotiated fee.... Yet it happened to me several times that I had a lecture for another firm or even a non-sponsored lecture ... where I was called and told: ‘Look, if you said this about this and that, we would pay you an additional fee.’ [WA-29]
Finally, the research and financial incentives offered by pharma reaffirmed experts’ recognition in the medical milieu (cf. Lakoff 2004, p. 263). This was illustrated by a high-ranking Agency official’s comment on large research grants offered by drug companies.
This money does not end up in an expert’s pocket.... He will spend it on his clinic, his people, PhD students, research; in short, on building his own position in science. He will not spend it on extravagances, dissipation, a trip around the world five times. No, he will spend it on establishing his position in science because this is the thing he values most. For me, this is corruption. [WA-30, 31]
The impact of these lucrative forms of support was reinforced by pharma’s selectivity in choosing their recipients (NIK 2010a, p. 56). A spokesperson for a drug company emphasized: “If there’s a ‘number one event’ every doctor would like to be there. But not everyone can afford it.... A firm’s budget is not made out of rubber. We can send two, three, five people to a cardiology congress.” However, unlike patient organizations, medical experts could diversify cooperation with firms from their speciality areas (cf. Lakoff 2004, pp. 262–263).). A key account manager at a drug company noted: “Firms obviously compete for ... attention” of a small number of opinion leaders. In addition, the public affairs director at a pharmaceutical firm asserted: “Exclusive cooperation with just one firm happens, but only occasionally. We do not want to cooperate with such KOLs because they are too strongly oriented towards that firm.” [WA-32, 33].
On the whole, the fundamental importance of relationships with pharma for medical experts’ professional position was consistent with corporate domination theory. However, the evidence of informal interactions associated with conflicts of interests, such as congresses, clinical trials and paid lectures, also gave support to the clique theory, emphasising informal relationships between members of elite cliques, in this case drug company representatives and members of the medical establishment.Footnote 6
While the experts interviewed saw themselves as impartial, they admitted that receiving pharma’s support could bias scientific judgement. A national consultant explained:
Obviously, firms have the opportunity to influence [experts], because if you’re preparing a lecture and ask them for scientific materials, they will be very happy to send you ... loads of articles describing very positive events. And it can even be done objectively. But in this way you can expect to have a hundred concerning the positives. But a hundred of negatives you have to find on your own, if you can be bothered. If you can, you arrive at an objective picture. But if you can’t and choose the easy way....
Furthermore, conflicts of interest sometimes created privileged access to expert advisors, which was particularly important given the constraints existing in the formal consultations between state officials and drug companies. According to a partner at a law firm, “Firms have access to Council members. Those professors have cooperated, they give lectures. They have had relationships with firms.” Therefore, the expert’s structural dependence on pharma entailed the risk of creating generalized reciprocity (cf. Lakoff 2004, pp. 255–256), making the experts more likely to “take a collaborative, rather than adversarial approach to pharmaceutical firms” in the long run (Abraham and Davis 2009, pp. 590–591). One medical expert noted:
The mechanism of exchanging services and favours operates ad infinitum. These are delayed services. This works like as pointed out in the Godfather: “One day I will come to you and ask you a favor. And then you’ll repay me for everything.”
This account clearly resembled the “pharmaceutical gift cycle” model, highlighting the importance of dependency networks with doctors for pharma’s market expansion in both the United States and global peripheries (Oldani, 2002; Lakoff 2004: 255–256). In the resource-poor post-communist context, the risk of biasing scientific judgement was associated not only with positive incentives offered by drug companies but, perhaps even more importantly, the anticipated devastating impact of the withdrawal of drug companies’ support for experts’ careers (cf. Abraham 2009, p. 961; Healey 2004). An Agency official admitted: “Sometimes it’s very difficult to differentiate between incentives and pressure.” [WA-34].
Without sufficient documentary data we could not compare the voting patterns of Council members with and without conflicts of interest. Nevertheless, the limited transparency of the policy process should itself be viewed as indicating bias towards corporate interests (Abraham and Davis 2009).
Even so, historical institutionalists might still maintain that pharma’s control over medical experts was constrained by the formal regulations requiring Council members to report conflicts of interest, which might be followed by exclusion from voting or discussion when taking recommendations on specific drugs (AHTAPol 2011). However, like in Western regulatory agencies reports from Council session highlighted a tension between attempts to control the impact of conflicts of interest and the need to use Council members’ expertise (cf. Abraham 2010a, p. 649; Abraham and Lewis 2000, p. 59). While experts with conflicts of interest were never excluded from discussion, they were excluded from voting in 45 out of 81 (55.6%) instances when reporting one or more conflicts of interest. According to an Agency official,
If they stuck to this merciless, ruthless rule [exclusion from discussion or voting], especially when there are only five people present, they wouldn’t be able to take a decision. [Even so,] these are indeed muddled compromises. I’m fully aware that it shouldn’t be like this.
Lastly, the monitoring of declarations of conflicts of interest was trust-based, without scrutiny by the Agency or an external body. According to a manager at a health technology assessment firm,
And what if a declaration [of conflicts of interest] doesn’t reveal the truth? What’s decisive is good relations with the Minister of Health. The Minister knows who should be trusted: Those who share common interests with him. [WA-35]
Overall, the structural dependence of medical experts coupled, with evidence of the “permissive principle” (Abraham and Davis 2009) in managing their conflicts of interest, enabled drug companies to largely neutralize a key source of expert capacity, contrary to the historical institutionalist position.
While the data have thus far been consistent with both the clique theory and corporate domination theory, we must yet examine the independence of the state bureaucracy, the ultimate source of state autonomy, according to historical institutionalists. To this end, we concentrate on the career paths of officials working for state organizations involved in the reimbursement process.
The “Fire Exit” Syndrome
Contrary to historical institutionalism, predicting the existence of a stable pool of career bureaucrats, we found intensive mobility from all state organizations to the pharmaceutical sector. For example, only six out of 17 officials involved in developing the health technology assessment guidelines, described earlier in this article, remained in state organizations (as of mid-2011). Those who left joined local health technology assessment firms (six), multinational drug companies (positions commonly associated with lobbying) as well as their sectoral association (three), a pharmaceutical consultancy (one), and academia (one) (Niżankowski and Wilk 2009; AHTAPol 2007, 2009). On top of the high-level transfers, the most intensive mobility involved the middle level of organizational hierarchy. According to a freelance lobbyist, “After two years they move to a pharmaceutical company. This is the present career model.” By contrast, transfers from the pharmaceutical sector to state organizations were very rare. A journalist stressed: “Note that cadres flow only from the Ministry to drug companies and there’s no movement in the reverse direction.” The prevalence of one-way mobility from state organizations was consistent with Wedel’s clique theory, not the corporate domination theory, which would expect to see a “revolving door” pattern. [WA-36].
This “fire exit” syndrome was mainly triggered by low wages in the state organizations, contrasting with attractive career opportunities offered by drug companies. A high-ranking official recalled:
A powerful pharmaceutical firm tried to hire me.... They ... offered [me] a managerial post related to dealing with the company’s external stakeholders.... They were obviously trying to win me over using the argument of high earnings ... people having similar posts to mine had also been cornered in this way. They were offered a monthly payment somewhere in the region of $10,000.... However, if I had small children, the desire to have a large house and a new car, I would’ve broken down.
A high-ranking National Health Fund official noted that the disparity in earnings between state organizations and the pharmaceutical sector “is a structural problem. The cap on earnings in public offices is subject to top-down regulations for the whole state sector.” [WA-37].
Also consistent with the clique theory, the outflow of highly trained bureaucrats and experts entailed the privatization of vital elements of bureaucratic capacity, especially long-term organizational memory. A high-ranking Agency official admitted: “I deeply regret that X [a Consultative Council member] has left us. He was ideally informed about drug prices and sales.... None of us had this sort of information.” Also, increasingly mobile bureaucrats and experts sometimes adopted a friendly attitude towards drug companies, a phenomenon highlighted by both clique and corporate domination theories (Abraham and Davis 2009, p. 590). A Member of Parliament stated boldly: “Those people are very vulnerable to various pressures because they want to find a good job afterwards.” A middle-ranking Ministry official described the extended reciprocity mechanism underpinning mobility to the pharmaceutical sector:
Only an idiot would accept money. We should look at the broader context.... There are more subtle methods of influence than paying people. What counts for them is not only the present, but also the future.
Unlike in historical institutionalism, we observed, therefore, self-perpetuating erosion of state capacity. The resulting bureaucracy moved away from the “rational” model, stressing meritocratic recruitment, long-term rewarding career prospects, and norms of neutrality and disinterestedness (Bourdieu 1994). [WA-38].
As the clique theory would expect, the “fire exit” mobility pattern boosted pharma’s power through privatized informational capital concerning the highly secretive reimbursement process. An experienced external affairs manager at a drug company admitted:
Ex-officials know how to move smoothly within the Ministry, whom they should talk to or address a letter to. Though I try very hard, I don’t know this, because I didn’t work there.
Insider expertise was reinforced by personal relationships, important in direct interactions with state officials. A freelance lobbyist recounted:
We have someone there with whom we used to sit at the same desk and drink tea. And this person says that our application is ok, and theirs [another company’s] will not pass, since it is ‘incorrect.’
The number of personal connections accumulated by bureaucrats-turned-lobbyists was therefore a key determinant of their firms’ market success. As the communications manager at a drug company emphasized, “Some [lobbyists] have greater capabilities than others. If a firm lacks them, it translates into limited access.... [This] can obviously affect the drug’s chances of being reimbursed.” Crucially for drug companies, both expertise and informal connections could be drawn not only from top but also middle-ranking officials, who privatized fragments of the reimbursement process, which resembled the pattern of informal appropriation of state power under communism (Podgórecki 1994, p. 50). As a freelance lobbyist expounded,
A firm is reasoning this way: ‘Let’s employ someone who knows other people from the Ministry. Though he is only a pawn, he has certain insider information which may be useful in bringing some things closer, speeding [things] up, getting knowledge about the competition.’ [WA-39]
Overall, unlike in the “revolving door” pattern, drug companies’ power was not increased through bringing their policy perspective to state organizations (Abraham and Lewis 2000, p. 58), but through the accumulation of privatized state resources. Therefore, Wedel’s theory was supported over the corporate domination account.Footnote 7 Nonetheless, the dramatic loss of state capacity, coupled with an increase in drug companies’ power, suggested that the resulting imbalance of power between the two sides was even more extreme under post-communism than in the United States or the United Kingdom.
Finally, it is worth asking a question about the possible durability of the uniquely post-communist “Fire Exit” syndrome. In this respect, we formulate two hypotheses. Unless the state capacity is increased through pouring more financial resources into the state organizations involved in drug reimbursement, we predict that they will continue to train “privatizing” employees for the pharmaceutical sector. On the other hand, creating more competitive working conditions in the state organizations will lead to the emergence of the revolving door familiar from the United States or the United Kingdom. In that case, drug companies will privatize less state resources, but will still be able to transfer their policy perspective to the state organizations.