AUTH/3527/6/21 - Voluntary admission by Leo

Undisclosed transfers of value to patient organisations in 2019

  • Received
    25 June 2021
  • Case number
    AUTH/3527/6/21
  • Applicable Code year
    2019
  • Completed
    17 December 2021
  • No breach Clause(s)
  • Breach Clause(s)
  • Sanctions applied
    Undertaking received
  • Additional sanctions
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  • Appeal
    No appeal

Case Summary

Leo Pharma UK made a voluntary admission about undisclosed transfers of value to patient organisations in 2019.

Leo stated that in the process of compiling the list of patient organisation disclosures for 2020 (due to be published by the end of June 2021), it had come to light that there were three [sic] transfers of value made to UK-based patient organisations, from the Leo Pharma global organisation in 2019. Leo Pharma UK were not aware or informed of these interactions and transfers of value between the global organisation and the patient organisations. Therefore, in the patient organisation disclosures list published belatedly in December 2020 then updated in January 2021, these transfers of value were undeclared, and the associated contracts between the global Leo Pharma organisation and the UK headquartered patient organisations were not certified.

The detailed response from Leo is given below.

The Panel noted that in the process of compiling the list of patient organisation disclosures for 2020 (due to be published by the end of June 2021), Leo had discovered that there were four transfers of value made to three UK based patient organisations in 2019, from the Leo Pharma global organisation, which had not been disclosed.

The Panel noted Leo’s subsequent submission that one of these four payments, the payment to the International Alliance of Patients’ Organisations (IAPO) for sponsorship of a congress in 2019, was made in April 2020. The Panel noted that this payment to IAPO did not therefore need to be disclosed until the end of June 2021. The Panel noted Leo’s submission that disclosure of this transfer of value was made by the end of June 2021. The Panel therefore ruled no breach of the Code in relation to the payment to IAPO.

In relation to the two payments made to the Gorlin Syndrome Group (June and October 2019) for two separate activities, and the payment made to Lupus Europe in March 2019, the Panel noted that these three payments had not been disclosed by the end of June 2020, as required by the Code, and thus the Panel ruled a breach of the Code as acknowledged by Leo.

The Panel noted Leo’s submission that the contracts between Leo Pharma A/S (global) and the three UK based patient organisations for the four activities in question were not certified. The Panel further noted Leo’s subsequent submission that two of the four activities (Gorlin Syndrome Group consultancy expenses and Lupus Europe advisory sessions) were contracted services provided by the patient organisations and therefore the written agreements for those services did not need to be certified. The Panel therefore ruled no breach of the Code in relation to those two contracts.

The Panel noted Leo’s submission that the contracts for the other two activities in question (Gorlin Syndrome Group R&D collaboration agreement and sponsorship at IAPO Asia Pacific Congress) were not contracted services provided by the patient organisations and the written agreements had not been certified as required by the Code; the Panel therefore ruled a breach of the Code in relation to each contract.

The Panel noted from Leo’s submission that until the end of 2020, it did not have an electronic approval system in place for cross-border activities, including interactions with patient organisations, which would automatically flag cross-border interactions and associated transfers of value to the UK affiliate. It was unclear to the Panel what processes Leo had in place prior to this and at the time of the activities in question; Leo made no submission in that regard. Nonetheless, the requirements of the Code had not been met in relation to disclosure of payments made to patient organisations and certification of written agreements as required by the Code. The Panel ruled a breach of the Code as high standards had not been maintained.

Clause 2 was a sign of particular censure and was reserved for such use. The Panel considered that it was most regrettable that Leo was a year late in disclosing payments made to patient organisations in 2019. Furthermore, this was the third time that Leo had not met the requirements of the Code in relation to payments made in 2019 to patient organisations.

The Panel was concerned that these omissions were only discovered during the process of compiling the list of payments made in 2020 to patient organisations; the Panel was concerned that cross-border payments to UK patient organisations were not checked as part of Leo’s investigation into the first two complaints about failure to disclose payments made to patient organisations in 2019 (Cases AUTH/3418/11/20 and AUTH/3498/3/21). Taking all of the circumstances into consideration, the Panel considered, on balance, that Leo’s numerous failures in relation to disclosure of payments made to patient organisations in 2019 and its lack of oversight of overseas affiliate’s interactions with UK based patient organisations had brought discredit upon and reduced confidence in the pharmaceutical industry, and a breach of Clause 2 was ruled.