Peter Coe, Tudor Reilly: Clean up your reputation

The pharma industry must do more than the bare minimum if it values its reputation.

In the golden era of the pharma industry - if it ever existed - research and development was a respectable pursuit, regulation was light touch, new discoveries abounded, drugs came cheap, the drug hunters were honoured by a grateful world and the improvements in public health were huge.

Now enter today's world.

Drug safety standards are higher; candidate drugs fail more often, many at a late stage; and therapies are targeted and more complex. Also, there is increasing demand to cut prices - not just in the developing world - and drug prices have become the story at the expense of the good news that healthcare is improving.

Over the past half century, the drug majors, like many other big institutions, haven't always done a great job of communicating these issues to the outside world. With little history of constructive engagement with external stakeholders - such as politicians, health departments and the media - or of demonstrating corporate responsibility before the term CSR was invented, the pool of goodwill that might have mitigated some of the ill will generated by the 'big bad pharma' stories of the past decade simply wasn't there.

To be fair, regulators - in Europe at least - have limited pharma's ability to talk directly to non-medical audiences. But that doesn't explain the skewed trials, the failed trials conveniently forgotten, the lip service paid to CSR, the tardy drug withdrawals and the culture of secrecy. Poorly managed issues frequently turned into crises and reputations suffered.

Three years ago, the pharma industry arguably reached its low point when a Harris poll in the US put the reputation of drug companies second to bottom, above the tobacco manufacturers.

Recent surveys suggest public perceptions of big pharma have rallied slightly, thanks largely to the misfortunes of other industries, notably oil.

On regulation, a Harris poll in December 2010 reported that nearly half of US respondents believed the pharma industry should be more heavily regulated.

In the UK, it's a climate that prompted one critic of the industry, Ben Goldacre, to argue in a recent debate that the pharma industry can't be trusted to conduct its own clinical trials.

In his book Bad Science, Goldacre disparages big pharma only slightly more subtly, saying 'there are no real differences between the $600bn pharmaceutical industry and the $50bn food supplement pill industry'.

So GSK's move in 2009 to do more than just what was required was a long overdue step. It wasn't the first to announce it would publish all its research data, but it was one of the first. More convincing still is that, under Andrew Witty's leadership, GSK demonstrated a desire for radical change, particularly on transparency.

Accessible leadership, visible to staff and the outside world, is a great start in any big organisation. GSK underlined its commitment to transparency last year when it decided to publish fees paid to prescribers. And the legal charge announced this year, in anticipation of multiple lawsuits, was a sign of readiness to take responsibility for past mistakes.

Against this background, GSK's commitment to health in the developing world through a low-cost malaria vaccine appears more credible.

But GSK is not alone. Increasingly, and rightly, other drug majors are demonstrating that a company's capital is created not just through cash returns and the share price, but through reputation building too.

Views in brief

- What is the most innovative public health campaign in the past year?

The Department of Health's stroke awareness campaign 'Act FAST'. Too many public health campaigns seem nannying or just a bit obvious. This one had the shock factor but it was also simple and memorable - and it saved lives.

- How will proposed changes to the NHS affect pharma marketing?

The move towards value-based pricing of branded drugs will have the biggest impact. It doesn't necessarily mean lower profits but pharma companies will have to get better at presenting their health economics arguments for new and existing medicines.

Peter Coe is a director at Tudor Reilly

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