Ethical business practices are at the heart of patient-centered healthcare. They are also vital to ensuring long-term, sustainable growth for the APEC region’s medical device sector. The industry’s thousands of small and medium enterprises (SMEs) across the Asia-Pacific can face adverse consequences due to unethical business practices. These include elevated patient distrust and weakened consumer confidence, unfair business conditions and/or inaccessible market opportunities, stifled investment and innovation, heightened regulation, and non-harmonized standards between economies leading to elevated compliance risk and legal costs while stifling high-standard trade.
The Business Ethics for APEC SMEs Initiative launched the medical device sector program in 2010 due to the significance of the industry for the region’s SMEs and long-term economic growth. An Expert Working Group was convened shortly thereafter in Kuala Lumpur consisting of senior government, academic and industry leaders to craft the “APEC Principles for Voluntary Codes of Business Ethics in the Medical Device Sector” known today as The Kuala Lumpur Principles . The expert group was co-chaired on a public-private basis by Malaysia (Malaysia SME Corporation) and the United States (AdvaMed).
High-standard, voluntary codes of ethics strengthen ethical practices by providing a platform for industry self-regulation while supporting government enforcement and anti-corruption efforts. They benefit responsible medical technology enterprises by providing clarity and harmonization in industry practices while enabling these firms – especially resource-constrained SMEs – to compete across borders with reduced legal risk and financial cost. Ethical collaborations between the sector’s key stakeholders, underpinned by high-standard codes of ethics, also ensure decisions are made in the best interest of patients.
Thanks to implementation efforts for the APEC Kuala Lumpur Principles that began in 2012, at least 31 medical device industry associations across 19 economies have codes of ethics in place or have achieved formal progress. These associations represent over 12,000 medical device enterprises across the APEC region, over 10,000 of which are SMEs.
In 2017, a public-private Expert Working Group was convened to develop APEC Guidance for Ethical Third Party Intermediary Relationships in the Medical Device Sector, elaborating on the APEC Kuala Lumpur’s provision that Companies should communicate “policies consistent with the Industry Code to their third party intermediaries with the expectation that the intermediaries will comply with the Industry Code.” This Guidance was welcomed by APEC SME Ministers and serves as the only international organization leading on this issue. In 2018, the Business Ethics for APEC SMEs Initiative’s medical device sector program also launched a Distributor Compliance Capacity Building Portal to compile resources for companies, their third parties, and other stakeholders to implement the Guidance. In 2019, the initiative released a work plan to further translate the Guidance in to a distributors’ ethics portal.