BMO Global Asset Management | Breaking Bad: Business ethics in the pharmaceutical sector

Business ethics breaches have emerged as the most material ESG concern for investors in the pharmaceutical and broader healthcare sector, and has been the key focus of our engagement with the sector in recent years. The industry has been repeatedly become embroiled in allegations with regards to marketing and sales related fraud and other lapses in compliance. Companies have been hampered by substantial risks and mounting costs associated with the prosecution by authorities. We estimate that $50 billion have been paid out by leading pharmaceutical companies in the past decade in conduct related regulatory, settlements fines and costs.