Understanding and controlling financial fraud in the drug industry

Purpose - This study aims to assess the fraud cases, factors and control measures of financial fraud in the drug industry with evidence from Ghana. Drug industry and pharmaceutical are the same, and they are used interchangeably in this study. Design/methodology/approach - Data from questionnaires were collected from 412 manufacturers, wholesalers and retailers of the drug industry. Data were presented and analysed with descriptive statistics and probit regression. Findings - Results show that, in general, stealing of drugs, stealing of cash, usage of fake cheques, falsified documents and dubious accounting practices are some of the fraud cases in the industry. Factors such as gender, educational level, religious beliefs, regulatory 7measures, pressure, rationalization and opportunities influence financial fraud in the drug industry. Control measures such as thorough assessment of products, regular review of fraud policies, installation of fraud-detection software and effective internal systems could reduce the menace. Research limitations/implications - The paper addresses a number of theoretical and systemic issues on financial fraud in the drug industry but with limited specific quantitative data or calculations as well as limited sample size. Further studies could offer a more quantitative approach with a larger sample size in an attempt, for instance, to estimate the financial costs of financial fraud to the drug industry. Practical implications - This paper openly tackles various attempted frauds and financial malfeasances from stakeholder perspectives in the drug industry. Practical measures have been given to tackle the consequences of the menace. Originality/value - This paper is geared towards providing valuable learning points for stakeholders in the drug industry to handle daily operations to assist them in detecting and preventing similar occurrence of financial fraud.