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The Medical-Industrial Complex: Evaluating Transparency in Physician-Industry

Unsplash. (2020). Medicine and Money. photograph, Studzinski.

In his final address to the country, on 17th January, 1961, President Dwight Eisenhower of the United States raised the alarm on the rise of a new threat to democratic government, a phenomenon he termed as the military-industrial complex. "In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex. The potential for the disastrous rise of misplaced power exists, and will persist", he warned his nation. Undoubtedly, the military industrial complex is a giant that persists to this day, but recent years have witnessed the rise of another analogous phenomenon, the medical-industrial complex.

Referring to the network of corporations that supply health care services and products for a monetary gain in return, the concept was brought to the public eye in the 1971 book The American Health Empire (Medical-Industrial Complex, n.d). The medical-industrial complex, comprising corporations such as proprietary hospitals, health insurance companies, diagnostic laboratories, hospital supply and equipment businesses, nursing homes, the pharmaceutical industry and drug manufacturers conveys the threat of these industries prioritizing profit over the best interests of the public (Relman, 1980). How much truth lies to this claim, and how does Canada fare when it comes to regulating this medical-industrial complex? Let’s take a closer look at one aspect of it, the pharmaceutical industry in particular.

Any company or private industry’s main goal is, without question, to make money. With most industries, targeting and advertisement of the company’s products is done directly to the consumers, but with the pharmaceutical industry, there is the need for a middle man: the physicians and doctors who will actually prescribe their products. And so begins the relationship between medical professionals and pharmaceutical companies, whereby the latter tries to influence the former, whether it is through overt marketing of their drugs, or through industry largesse in the form of gifts, paid dinners, trips or through sponsorship of continuing medical education. Even if it seems small and minimal, make no mistake; the science says even gifts and gestures of negligible value can influence behaviour (Katz et al, 2003). This is because it bestows a sense of obligation on the gift recipient, which can undermine the professional objectivity of doctors when they choose what drug to prescribe to what patient.

Given these considerations, it is no surprise that key national organizations such as the Canadian Medical Association discourage physicians from accepting any kind of gifts from pharmaceutical representatives, and emphasize the importance of maintaining professional boundaries in their relationships with industry (Canadian Medical Association, 2007). Such associations highly stress that the physician’s responsibility in acting towards the health advancements of all Canadians should remain paramount above all else. So perhaps, from the lens of pharmaceutical industry relations, it may seem that it is not all doom and gloom and the medical-industrial complex has not completely taken over our healthcare system.

However, in Canada, the major problem persists in actually ensuring accountability in physician-industry relationships. Medical associations can give their directives as much as they want, but when it comes to establishing transparency, Canada falls behind many of its Western counterparts. Unlike the U.S, most of Europe, and Australia, Canada lacks the so-called “Sunshine” legislation, present in these countries, which requires pharmaceutical companies to disclose any and all payments made to physicians and patient groups (MacLeod, 2020). Instead, a Canadian company may choose whether or not to make such disclosures, with no federal regulations in place to keep physician-industry ties in check.

As an alternative, Canada has left the pursuance of these regulations up to each province. In Ontario, until recently, there were no laws equivalent to the aforementioned “Sunshine” laws, but change seemed imminent with the passing of the Health Sector Payment Transparency Act in December of 2017 (Health Transparency Act, 2017). The act, and the rules it proposed, requiring drug companies and medical device manufacturers to report any payments above 10$ made to physicians, was the first of its kind in Canada. Unfortunately, with the provincial government changing hands from the Liberal party to the Conservative party in 2018, the implementation of the act was put to a halt, with the newly elected officials choosing to re-evaluate the proposed rules. The act was then supposed to come into force sometime in 2020, but has been delayed yet again, with no clear implementation date in sight.

The lack of government interest in ensuring transparency and accountability, and in keeping the medical-industrial complex in check is worrisome. One can at least appreciate that Ontario has tried to take a step forward in the right direction with passing this act, as other provinces remain even further behind. The fact remains that today, healthcare and private industries are closely intertwined, and cannot be separated. Assuredly, there are numerous benefits to the involvement of private industry within healthcare. But if we are to heed the advice of Eisenhower and apply it to this new industrial complex, disclosure and transparency is the way to go for guaranteeing that the power of the medical-industrial complex is closely monitored and limited. This makes it even more disappointing to see the federal government’s lack of involvement and interest in addressing the issue on a national level, which is a step backward from almost every other first-world nation. If Canada wants to ensure that profit does not eclipse patient needs, it must step up to the challenge and introduce the appropriate regulations that will empower and educate its patients and citizens.


1. Canadian Medical Association. (2007). Guidelines for physicians in interactions with industry. CMA Policy.

2. Katz, D., Caplan, A. L., & Merz, J. F. (2003). All gifts large and small: toward an understanding of the ethics of pharmaceutical industry gift-giving. The American journal of bioethics : AJOB, 3(3), 39–46.

3. Macleod M. (2020). What needs to change in the Canadian pharmaceutical industry. CTV News.

5. Relman A. S. (1980). The new medical-industrial complex. The New England journal of medicine, 303(17), 963–970.

6. Health Sector Payment Transparency Act (2017, c.25 Sched. 4).

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