Pharmaceutical and life science branch can be rightly regarded as a ‘champion’ at involving personnel in economic crimes. Indeed, the so-called fraud statistics looks not comfortable. In particular, according to WHO estimates, over 7% of the world’s annual health-care spending are lost due to fraud and medical errors, and according to National Health Care Anti-Fraud Association (USA), up to 25% of the world’s annual expenditures for state procurement of pharmaceuticals are lost due to fraud and corruption.

I. Forensic Diagnostics for Pharma Producers and Distributors

Corporate fraud and corruption detection through Forensic Diagnostics of the four main stages of the value chain.

• Unfounded or falsified scientific researches, tests and experiments.
• Unfounded overestimation of paid services provided by research institutes.
• Manipulations with clinical trial results.
• Intellectual property theft and/or abuse.

• Overpriced purchases, as well as fictitious, double and/or excessive purchases intentionally effected by the target’s employees for personal gain.
• Procurement of raw materials together with or by involving contractors affiliated with the key personnel while discriminating against the interests of the business owner, including purchases by using:
• nontransparent and/or unobvious procedures for payments to contractors;
• nontransparent discount schedules and related applicability criteria (paying agency fees).

• Stockpiling of uncounted finished products (including counterfeit products) and excessive raw materials, intermediate products and other materials through:
• manipulations with operating standards, wastage and rejection rates;
• misrepresentation of instrument data and/or intentional damage of monitoring and measuring devices including video surveillance devices;
• misrepresentation of inventory control data and/or production records data;
• insufficient specification/lack of specification in the documents confirming the write-off of raw materials, intermediate and/or flaw products;
• intentional errors in planning.
• Unfounded bonus and premium payments to employees, in particular, through distorting actual key performance indicators (KPI)

• Participation in the marketing of counterfeit pharmaceuticals, inter alia through collusion with both affiliated contractors and other staff members.
• Intentional relaxation of control of the quality, storage conditions and shelf life of pharmaceuticals that may be indicative of the growth in shady sales.
• Deliberate loss of royalties.
• Intentional granting of excessive (unfounded) discounts and bonuses to distributors contrary to accepted rules for sales of products and/or when there is a systematic violence of discounting contract arrangements.
• Illegitimate sales of restricted products through retailers.
• Payment of illegal bonuses to Health Care Professionals and/or Government Officials (HCPs & GOs), who are involved in promotional activities and/or serving on public tender committees, under the guise of donations, gifts, donor funding, employment of their relatives, etc.

II. Forensic Diagnostics for Health Care Facilities (HCF)

Corporate fraud and corruption detection through Forensic Diagnostics of the four main stages of the value chain.

• Intentional understatement of plan figures below the HCF actual needs (budget gap).
• Circumstances where responsible HCPs conceal information on the actual loss ratio by types of healthcare services, inter alia, through deliberate reallocation of cost items.

• Preconceived selection of the suppliers of medical devices (MDs), pharmaceuticals and other necessary goods and services while discriminating against the interests of the business owner, including:
• purchases from contractors affiliated with the HCF key personnel;
• purchases not conforming to the quality standards established by the owner and by law;
• overpriced purchases, as well as fictitious, double and/or excessive purchases;
• purchases with unfounded prepaid supply/operations/services from contractors, inter alia, by non-compliance with compulsory conditions;
• purchases of articles not related to overriding needs.
• Violation of purchasing standards including competitive bidding standards

• Data corruption in HCF accounting systems, including entering the fictitious data as follows:
• misrepresentation/duplication of services actually rendered through falsifying the data on actual personnel workload or through collusion with insurance company employees with a view to raise too high the insurance benefits;
• excessive (inconsistent with diagnosis) medical services, treatment procedures or manipulations prescribed to patients;
• too high dosage of drug substances (including dosages not threatening life and health of patients);
• medical services rendered beyond the scope of HCF professional activities (including using special MDs and selling the pharmaceuticals);
• medical services rendered without entering any data in HCF accounting systems.
• Misuse of the lack of adequate HCF access control, registration of patients and their medical histories.
• Undue write-off of MDs and pharmaceuticals, without regard to standard consumption or in absence of the appropriate write-off control (including MDs and pharmaceuticals purchased from state budget resources).
• Overstated costs of medical services.

• Misrepresentation in providing information on spending budgetary funds to the Federal Compulsory Health Insurance Fund (FCHIF) including:
• overstated number of insurance claims from the FCHIF insured persons and, as a result, overstated number of medical staff working hours and hoarding of unrecorded pharmaceuticals;
• misuse of MDs and pharmaceuticals by rendering FCHIF services.
• Manipulation with data on actual HCF personnel workload by rendering FCIHF and VHI (voluntary health insurance) services.

III. Compliance Services, and Fraud, Corruption and Regulatory Risk Management Services

Compliance services in accordance with the requirements of Russian and international anti-corruption laws.

• Assessment of corruption/bribery risks according to Russian and international anti-corruption laws (FCPA, UKBA).
• Development of recommendations for the improvement of the corruption/bribery risk management system.
• Assistance to the implementation of the anti-corruption compliance system.
• Provision of comprehensive range of independent, anonymous and confidential hot line services.

Corporate fraud and regulatory risk management.

• Business process analysis for the compliance with regulatory legal acts and local regulatory documents.
• Analysis of sufficiency of the detail level of the regulatory documents.
• Estimation of the efficiency of accounting systems with regard to unauthorized changes.
• Assessment of fraud risks with the following development of recommendations for the improvement and facilitation of the internal control system.