Poor enforcement of drug legislation is often associated with lack of political will, inadequate legislation, lack of independence of those responsible for interpreting and applying legislation, weak infrastructure for enforcing regulation, lack of accountability and transparency, and corruption. Governments can strengthen enforcement by ensuring that courts are independent and that the rule of the law is followed, and by strengthening infrastructure, including appropriate remuneration of regulators.

For Ayres and Braithwaite, appropriate enforcement and regulatory strategies are particularly important in terms of improving regulatory compliance.³⁶ They argue in favour of responsive regulation, which they define as triggering a certain type of regulatory response. They suggest that regulation be responsive to industry structure. In other words, different structures will be conducive to different degrees and forms of regulation. They argue, too, that governments must be aware of the different motivations of those regulated if they are to design effective regulation.

Thus responsive regulation is not a clearly defined programme or a set of prescriptions concerning the best way to regulate. On the contrary, the best strategy is shown to depend on context, regulatory culture and history. Responsiveness is rather an attitude that enables the blossoming of a wide variety of regulatory approaches.

The strategies that Ayres and Braithwaite advance to promote effective regulation are:

• use of a tit-for-tat strategy (i.e. the strategy of mixing punishment and persuasion that is most likely to be effective);

• pyramid strategies (hierarchical ranges of sanctions and regulatory strategies);

• tripartism (delegation of power to public interest groups).

Tit-for-tat strategy

According to Ayres and Braithwaite, regulators are not likely to be effective if they apply only punishment. They argue that punishment alone is counterproductive since it is expensive. They argue further that punishment engenders a game of regulatory cat-and-mouse whereby companies defy the spirit of the law by exploiting loopholes. Conversely, persuasion is cheap and to be preferred in situations where technological and environmental realities change very quickly and make it difficult to ensure that the detailed content of regulations is up to date. Ayres and Braithwaite further argue that business actors are not always motivated primarily by the prospect of making money. Rather, a sense of social responsibility may underlie some or much of their - action. Therefore, a strategy based mostly on punishment would undermine such goodwill. Thus a tit-for-tat strategy that combines punishment and persuasion is more likely to be effective.

The tit-for-tat strategy forms the basis of tripartism (see below). Under tripartism, the regulator refrains from applying a deterrent response provided the company is complying with drug legislation. But if the company ceases to do so, the regulator then shifts from a cooperative to a deterrent response. By cooperating with companies as much as possible, regulators avoid undermining the good faith of socially responsive actors.

Pyramid strategies

Different countries use different enforcement strategies to promote compliance with drug legislation. The strategy most commonly practised by government regulatory agencies consists purely of punishment, based on the use of deterrent action. Yet according to Ayres and Braithwaite, regulatory agencies with only one deterrence option at their disposal may find enforcement difficult. For example, it is not uncommon for regulatory agencies to have the power to withdraw or suspend licences as the only effective power at their disposal. But it may be politically impossible to apply such a drastic sanction to any but the most heinous of crimes.

For Ayres and Braithwaite regulatory objectives are more likely to be achieved when agencies operate both a hierarchy of sanctions and a hierarchy of regulatory strategies of varying degrees of intervention. They contend that regulatory agencies are best able to secure compliance when they operate an explicit enforcement pyramid of the type shown in Figure 3 below.

This pyramid of sanctions applies at the level of the individual regulated company. In this model, most regulatory action occurs at the base of the pyramid where efforts to obtain compliance are made by persuasion. The next step up in enforcement consists of a warning letter, followed by imposition of civil monetary penalties if this fails, and then progressively upwards in the direction of the apex of the pyramid until compliance is achieved. Ayres and Braithwaite assert that failure to comply is much more likely when companies face only one deterrence option rather than an explicit enforcement pyramid.

Figure 3. Pyramid of enforcement strategies

Another strategy proposed by the authors focuses on the entire industry, as illustrated by the pyramid of regulatory strategies shown in Figure 4. Using this strategy, governments are most likely to achieve their goals by communicating to industry that they have at their disposal and are willing to apply an escalating set of enforcement strategies, ranging from self-regulation all the way up to command regulation with non-discretionary punishment.

Figure 4. Pyramid of regulatory strategies

This gives incentives to both the industry and regulatory agents to make regulation work at a low level of intervention - i.e. self-regulation at the base of the pyramid. As with the pyramid of sanctions, the main argument in support of a pyramid of regulatory strategies is that most regulatory action is channelled to where it is most effective and least resource-intensive. Self-regulation can be further strengthened if government insists that the industry be delegated to enforce self-regulation and effectively communicates application of the pyramid, including details of sanctions it has taken, to consumers, professionals, government and industry.

Ayres and Braithwaite conclude that selection of an appropriate form of delegation and appropriate escalation of (non-delegated) regulation are important if pyramid strategies are to be effective.

Tripartism

Ayres and Braithwaite point out that a regulatory policy that fosters cooperation between the regulator and the regulate also encourages corruption; if relationships are ongoing and encounters are regulated by the same regulator, corrupt dealings become more tempting to both parties. They therefore propose tripartism as a substitute for the usual methods of dealing with risks of corruption, such as rotation of personnel and limiting the discretionary powers of regulators. They describe tripartism as a process in which relevant public interest groups become a fully-fledged third player in the regulatory process. This secures the advantages of cooperation while avoiding corruption.

For Ayres and Braithwaite, a tripartism policy fosters the participation of public interest groups by granting them:

• access to all the information that is available to the regulator;
• a seat at the negotiating table with the company and regulatory agency;
• the same authority to sue or prosecute under the regulatory statute as the regulator.

Ayres and Braithwaite argue that empowered public interest groups can directly punish the regulate (company) or regulators who fail to punish non-compliance, and in so doing prevent corruption. Thus, if tripartism is to function well, public interest groups must have regulatory authority with a legal basis and be both politically and financially independent from government.

The recent moves taken by the Punjab State of Pakistan (see Box 1) may not exactly match the tripartism strategy proposed by Ayres and Braithwaite, but constitute another possible approach to third-party involvement in drug regulation. Similarly, in Canada and the United Kingdom, pharmaceutical industries are not required to enforce sanctions or to communicate them to interested parties, but are delegated to enforce self-regulation in relation to promotional and advertising activities.³⁷

Also in the United Kingdom, the Royal Pharmaceutical Society is empowered by the Pharmacy Act of 1954, the Medicines Act of 1968 and the Poisons Act of 1972 to register both pharmacists and pharmacies. It is also delegated to safeguard the public with respect to the dispensing and distribution of medicines, and to regulate and promote the pharmacy profession. The Society can take professional disciplinary action against offenders. Legal offences are pursued through the courts and the criminal justice system.³⁸ Proposed new disciplinary legislation incorporates escalating enforcement strategies, as shown in Box 3.³⁹